The Friction Paradox – Compliance vs User Experience

Friction /?frikSH?n/ noun – Any unnecessary obstacles users encounter while interacting with banking products or services. These manifest in various forms, including cumbersome account opening procedures, complex loan applications, processes that are not aligned or consistent from channel to channel, or outdated digital interfaces. While some friction is essential for security and regulatory compliance, excessive friction can lead to frustration and ultimately deter members and prospects from adopting new products or services. Friction is the enemy of the member experience and must be mitigated in all process improvement efforts.

What happens When Members Encounter Too Much Friction?

  • Abandonment: The most immediate reaction is abandonment. Members give up on the process when it becomes too cumbersome or time-consuming. This response includes abandoning an account opening process midway, discontinuing a loan application, or avoiding a particular service.
  • Seek Alternatives: Today, the competition is a browser search away. When members experience frustration, they often seek alternatives like local competitors, online banks, or fintech companies that promote smoother and more convenient processes.
  • Express Frustration: Members often express frustration to the credit union through feedback channels or customer service interactions. They voice their concerns about the complexity of processes, the inefficiency of systems, or the lack of user-friendly interfaces. The credit union must have a process to capture this feedback because if it is not addressed, they may become disillusioned with the credit union and its offerings.
  • Decrease Engagement: Undo friction leads to decreased overall engagement with the credit union. Members become less inclined to explore new products or services, preferring to stick with familiar options to avoid additional hassle. This reduced engagement impacts the credit union’s ability to cross-sell or upsell to its members and results in missed revenue growth and engagement opportunities.
  • Impact on Perceived Value: Friction also affects how members perceive the value of a product or service offered by the credit union. If accessing or utilizing a product requires undue effort, members may question whether the benefits outweigh the hassle. This perception of low value significantly reduces adoption rates, even if the product offers substantial benefits.
  • Impact on Trust and Credibility: Excessive friction erodes members’ trust and credibility. When processes are overly complex or prone to errors, members may doubt the credit union’s competency in managing financial affairs. This lack of trust can deter members from engaging with new products or services, fearing potential risks or complications.
  • Competitive Impact: In today’s competitive banking landscape, credit unions must compete not only with traditional banks but also with fintech startups and online-only institutions. These competitors often excel in providing seamless digital experiences with minimal friction. Credit unions that fail to streamline their processes risk falling behind and losing market share to more agile and user-friendly alternatives.
  • Share Negative Experiences: Members who encounter significant friction often share their negative experiences with friends, family, or colleagues. Word-of-mouth recommendations and warnings influence others’ perceptions of the credit union and may deter potential new members from joining or discourage existing members from deepening their engagement.

Convenience and efficiency are table stakes in every aspect of our members’ lives. Credit unions face a unique challenge: balancing the need for security and compliance with the demand for seamless user experiences. Friction in a process often becomes a significant barrier to product adoption.

How Can a Credit Union Avoid Excessive Friction?

  1. Focus on User Experience: A smooth and intuitive user experience is crucial for members exploring and adopting new products. When processes are overly complicated or require extensive paperwork, members are likelier to abandon their efforts and seek alternatives elsewhere. Lengthy account opening procedures or convoluted loan application processes will drive potential users away.
  2. Streamline Digital Interfaces: Invest in modern, user-friendly digital platforms that simplify account management, loan applications, and other financial transactions. Intuitive interfaces reduce the cognitive load on users and encourage greater engagement with credit union products.
  3. Automate Processes: Leverage technology to automate repetitive tasks and pre-fill forms and reduce manual intervention wherever possible. Automated processes enhance efficiency and minimize errors and processing times, improving the overall user experience.
  4. Simplify Compliance Procedures: While compliance with regulatory requirements is non-negotiable, compliance officers must balance the desire for risk elimination with an easy-to-navigate experience. The credit union business model is built on risk assumption, and it is possible to simplify compliance procedures without compromising security or risk by providing precise and concise instructions and user-friendly interfaces designed to help members navigate regulatory requirements more efficiently.
  5. Gather Member Feedback: Actively seek member feedback regarding their credit union product and service experiences. This listening loop must capture and understand members’ pain points and areas of friction and utilize this information to inform strategic improvements and enhancements.
  6. Continuous Improvement: Process improvement is never a “one-and-done” effort. Cultivate a culture of continuous improvement within the credit union, where optimizing processes and enhancing the user experience are ongoing priorities. Review and refine internal procedures to minimize friction and adapt to evolving member needs and expectations.

Process friction is a significant challenge for credit unions seeking to drive product adoption and balance growth. Credit unions must mitigate friction by prioritizing user experience, simplifying processes, and leveraging technology to create more compelling and accessible offerings. In doing so, credit unions will strengthen member relationships, remain competitive, and ultimately achieve greater success in fostering product adoption and member satisfaction. Being “easy to do business with” is no longer an operational or compliance option.


Rich Jones is the Founder/Principal of Leading2Leadership LLC. Before starting his strategic planning agency, he spent over 20 years in leadership roles in the financial services sector. Before becoming an executive in the financial services sector, Rich was an entrepreneur, building and selling two businesses and working for early-stage start-up companies in executive roles in marketing, business development, and seeking investment partners. With more than three decades of experience, he brings innovative thought to companies and executives. Rich published “Leading2Leadership, a Situational Primer to Leadership Excellence.” The book is available on and was designed to be used as a book study for leadership development programs; it breaks leadership skills into manageable situations for discussion and reflection. Rich works with credit unions, CUSOs, and vendors, designing digital, data, culture, marketing, and branding transformation strategies. In 2014, Chosen as a Credit Union Rock Star by CU Magazine, and in 2018, Rich received the Lifetime Achievement Award from CUNA Marketing and Business Development Council. A Marine and graduate of Colorado State University, Jones shares his expertise at


  1. Brad Roteman on March 15, 2024 at 6:34 pm

    As usual, you have hit all of the important comdead on

  2. Brad Roteman on March 15, 2024 at 6:37 pm

    Android edited my comments wrong.
    What I intended was:
    As usual you have hit all of the important components dead on.

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