In today's current environment, friction seems to be ubiquitous. In the workplace, it can be an asset. Enterprise friction falls across three categories; product, process, and people.
Product frictions are lack of product knowledge by the user. Common product frictions at a Financial Institution are; not understanding how a skip-a-payment affects the loan terms and how a check hold works and affects available funds.
Process frictions are obstacles found most commonly in the purchase journey. An example is the loan purchase journey. The loan process starts when the member first identifies the need for the loan. This is often called discovery. Next, the member/customer will evaluate their options for the loan and then purchase. Once the loan has been opened, the next phase is access/use. This is followed by the final step of either recommend or repurchase.
This process holds many potential friction points. Common frictions are:
Members are not aware of the credit union option.
The application process is obstacle-filled, resulting in abandoned carts and excessive length.
Loan fulfillment takes too long.
When nearly 600 credit union leaders were asked the following question:
Please describe the friction the member has doing business with the credit union?
The most popular answer was a surprising response. it was the word LACK — specifically, a lack of a data culture. Data holds many insights. It is hidden in the 60-100 data systems that a credit union has. The ability to connect the data and create insights is part one of the solution. The other is the ability for credit union talent to have the capability to consume data and make iterative changes.
Here are four actions a financial institution can take to leverage friction:
Action 1: Get data (survey)Gather perceived data on the member experience's current state. Seek this input from leaders as well as those close to the member. A great starting point is to identify external end-user friction (member/ customer) and then Identify internal friction (the friction business units have interacting with each other.) This provides a perceived friction landscape to start with.
Action 2: Map the MUX
This can be accomplished with software or a simple process map. The key points are to identify critical phases in the member journey and identify the friction points
Add any data as is available to each phase that either supports or refutes the perceptions.
Member/Customer Friction examples
Members may encounter friction along the journey. In this auto purchase example, common frictions are 1) low awareness of credit union financing in channels they use. 2 ) few or non existing evaluation tools provided by credit unions, 3) challenging to engage online for the loan, must come to a physical office. 4) little or no engagement with the member post-purchase. 5) few channels are provided for advocacy. 6) repurchase efforts suffer from the application process.
Action 3. Analyze your findings.
A list of frictions will appear, and they need to be prioritized. The best lens to prioritize is what will have the most significant impact on the member with minimal effort. The "friction list" can be divided into short and long term projects.
Action 4: Friction Roadmap
Build out the road map looking at it from the timeline with work streams that include people, products, and processes.
Understanding enterprise friction is an excellent exercise in annual strategic planning. To learn how THRIVE leverages friction to improve members' lives, please click here.
Is there a book out there that can help my enterprise reduce member friction?
Written for credit unions by a credit union expert, Big Data/Big Climb: A credit Union playbook for leveraging data and talent to achieve revolutionary member relationship has been hailed as a "must-have". The book cuts through techno-jargon and translates data transformation concepts into a playbook filled with real-world examples, assessment guides, and other tools needed to reduce member friction, analyze actual competition, and identify disruption to improve the lives of its members and gain competitive advantage.
What if I want something more interactive than the book?
For the same time that it takes to enjoy your lunch, you could be learning about building innovation capabilities, human-centered design, and agile execution. Click here to learn how to access the recorded session on this topic.
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