On the surface, the distinctions between credit unions and other financial service providers seem to be blurring. Broader fields of membership, expanded product offerings and larger marketing budgets have helped credit unions to be a regular consideration when consumers are shopping for loan and savings products. While marketplace visibility is positive, ‘successful’ member votes to convert their credit union to a bank indicate that in many cases members do not recognize the difference.
Despite the blurring, the value and benefits of being a part of a cooperatively owned financial institution remain real and significant. Getting members to understand the credit union difference starts with ensuring that credit union employees, especially the front-line staff, not only are knowledgeable about the credit union difference but that they can also effectively communicate the uniqueness of the credit union value proposition to members. With a net addition of more than 7,000 new employees across the industry in 2006 and turnover among front-line staff often above 15%, educating new hires about the advantage of membership must be a standard component of employee orientation.
Ultimately the difference must be seen from the consumer’s perspective. One way to highlight the difference may be to simply post recent press releases released by banks and credit unions in branches and allow members and employees to see the contrast. The difference between credit unions that are focused on the member’s success and banks that are focused on the institution’s success is evident in the headlines:
Credit Union Year-End Press Headlines
- AA Credit Union Distributes Close To $8 Million in Bonus Dividends To Its' Member-Owners
You may remember last year’s “Extraordinary Dividend,” in which we all shared an extraordinary $5.2 million dollars. Well, I’m very excited to report that this year’s payout is even better than last year!
- PSECU Issues $7.4 Million in Special Year-End Dividends
The "credit union difference" is alive and well at PSECU, one of the nation's largest credit unions. PSECU recently issued $7.4 million in special year-end dividends to its members. This total represents an increase of $1.6 million over the 2005 special year-end dividend of $5.8 million.
- Wymar FCU Gives $500,000 Bonus
Wymar Federal Credit Union celebrated the New Year in style by rewarding its membership with a $250,000 Bonus Dividends and a $250,000 Interest Refund for a total return to its membership of $500,000!
Bank Year-End Press Headlines
- Citigroup Reports Record Income from Continuing Operations of $21.2 Billion, Up 7%
Our results were highlighted by double-digit revenue growth in our corporate and investment banking, wealth management and alternative investment businesses.
- Bank of America Reports Record 2006 Earnings of $21.13 Billion, or $4.59 Per Share
The increase in 2006 earnings was driven by growth in card income, including the addition of MBNA, strong growth in capital markets and investment banking activities reflecting the company's recent investments in those areas, increased equity investment gains, growth in service charges paced by deposit account growth, higher other income and strong expense control.
- JPMorgan Chase Reports Record Full-Year 2006 Income From Continuing Operations Of $13.6 Billion, Or $3.82 Per Share, On Record Revenue Of $61.4 Billion;
The firm is focused on driving improvement in performance through both continued cost discipline and investment in all areas of our franchise; converting and integrating The Bank of New York branches; and completing the wholesale deposit conversion, which is the last significant integration activity related to the Bank One merger.
The credit union comes through in these headlines because bank success results from maximizing value from the customer and returning it to shareholders, while credit union success comes from maximizing the value delivered to the member. Ensuring that employees and members understand this difference, and that credit unions continue to convey it to them, is critical.
To help teach your new employees about the credit union business model we’ve developed an innovative tutorial that introduces newcomers to the credit union industry with the core concepts that make up the credit union difference. To learn more check out, CUs 101: Staff Training on the CU Business Model.