Culp focused on relevance for survival. For credit unions, that goes beyond millennials to include everybody who does business with a financial institution. Or something close enough to a financial institution to suit their needs.
That “something close enough” speaks to a real danger. That’s the disintermediation we’re seeing as banks and non-banks flood the market with fintech and financial frills that exacerbate the urge for credit unions to throw away their differentiation and become just like everybody else.
Credit unions need to resist that mass market and focus on the real difference between cooperatives and banks or apps with no one behind them.
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The lowest common denominator might be tempting, but it’s not for everyone. Even Bank of America knows that. It has a niche, albeit a massive one, and it played to that niche when it announced it is casting aside countless customers and potential customers with its new low-balance checking account fees. Bank of America made a business decision, and it likely won’t get the pushback it did nearly a decade ago with Bank Transfer Day.
So, what’s your niche?
Recent visits with a small credit union in the Northeast and a large credit union on the Pacific Coast have reinforced for me the importance of finding, and pulling, the ripcord of relevance.
The small credit union has an outsized impact in its community, and its leaders and I talked about ways they can better tell the credit union's story. The Western credit union is a good example for how to do that.
This large, sophisticated-but-grounded outfit goes beyond the usual festival and fundraising sponsorships in its messaging. Those things certainly matter, but this credit union tells a story about how it puts money to work for the greater good. Its messaging includes how it puts deposits to work in the community, including funding loans that help build homes, sustain small businesses, and finance realistic hopes of a sustainable future in a sustainable community. The credit union's messaging focuses on “borrowing” instead of “lending,” a subtle but significant distinction.
The credit union movement, if it is to remain a thriving movement instead of a shrinking industry, needs more of this creative thinking about the niche it serves — the substantial, and growing, segment of the market that wants to do more with money and community.
The people in this niche are seeking relevance. They respond to it.
This is not a new story. Superior service, better rates, dividends to member-owners in various forms — they’re all part of the story that credit unions need to reinforce time and again. That’s how the notion that you are relevant sticks.
So, here’s a tough question. Two, really.
Will you pull the ripcord of relevance?
Will your members do it for you when it comes time to decide who they’ll patronize?
Doing nothing might not result in a plunge, but it certainly will be a slow walk into irrelevance. And, really, the outcome is the same.
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