A New Purpose is Needed for Credit Unions in a Digital World

What does a credit union do? How does a credit union do it?

Simon Sinek notes that it is often easier to focus on both what an organization does and how an organization does it. For credit unions this is no different.

As I have written many times before, the most common answer I get to the questions above is to deliver “great rates and service”.  Yet, in a digital economy, is a position built upon “great rates and service” even true anymore, yet alone a commoditized purpose or reason for being?

As consumers continue to become more empowered in a digital economy, thanks to a Google search, peer rating and review services, consumers may no longer continue to buy into the “great rates and service” hype promoted by credit unions.

Credit unions must operate at the speed of culture.

Non-traditional players continue to enter the financial services space with experience in digital, mobile and social delivery while meeting consumers increasing needs and adoption of digital channels.

The purpose of one of these neo-banks is even applicable to credit unions, as Alex Payne quit Twitter to join Simple on its mission to create “a bank that doesn’t suck.”  That’s a strong and bold purpose that breaks free of the great rates and service commoditization.

Just as books, music and video has given way to commoditization, thanks in part to the rise of Amazon, iTunes and Netflix, the disruption from these once non-traditional organizations have changed entire industries while sinking brands such as Borders, Wharehouse Music and Blockbuster.

Imagine instead of focusing on the what and how of a credit union’s purpose, traditionally great rates and service, what if a credit union’s purpose is driven by asking, why?

Why do we exist? What is our purpose within our community?

Is it to end poverty?

Build stronger families?

Promote local business?

Improve both the financial and physical health of consumers?

When a credit union can focus on why they do what they do, beyond great rates and service, it is possible to align people, product and process, around a purpose that can emotionally connect and resonate with others, both offline and online.