For as long as I can remember, I have believed that credit unions serve my financial well-being, not their own, and that the big banks serve a bottom line. Given the wake of 2008, a throng of financial flubs, firings, and fake accounts, why oh why do so many consumers choose banks over credit unions? I needed answers, and not from steadfast credit-unioners, banking articles, or marketing surveys.
So, on a sunny Saturday morning in Portland, OR, I stood near the entrance of a megabank and I asked a handful of people, “Why?”
My first victim was a man in his late twenties named Alex. I confidently (more-so bluntly) asked him, “Why use a bank, Alex, when not one credit union took bailout money after 2008 and yet every major bank did?” Alex answered just as bluntly:
Honestly, credit unions suck compared to banks. I’ve only ever used a bank. Credit unions only serve poor people, so their employees are ghetto. I don’t have fees at my bank. They’re also everywhere and online and wherever I look. Credit unions are not. I also feel like credit unions are always trying to get you to put your money there because you will make more money with them. Who cares if you aren’t getting any interest on your money? Honestly, this is one of the dumbest reasons to pick a credit union over a bank. If I get 2% on $1K, that’s only $20 after a year, and that means nothing to me.
Some scintillating and fair, although ultimately misguided arguments, I felt. Is Alex telling us that aligning our product and service offerings with his needs and wants would make the difference? Rewards, fees, and convenience (technological or otherwise) seemed to pepper our conversation.
A few minutes later, I met Anthony. Anthony is a 40-something, tower of a man who wanted nothing more than to take me under his wing and explain why a bank indeed:
Convenience. Convenience is key for people in today’s America. When there’s a Bank of America or Wells Fargo on every street corner that is significant to me because people want what they already know. They don’t like change and they are lazy. It’s also not easy to switch. Everyone has heard of Bank of America but who’s heard of Wauna Credit Union? When I think about the safety of my money, size and name definitely make a difference. I’ve gone back and forth with credit unions and banks for a long time but will always go to the one that works best for me. My mortgage is with a credit union but my checking account and credit card are with Bank of America.
Anthony too made some fair points. If I knew little to nothing about credit unions and needed somewhere to stash my cash, I would choose the financial institution that provided me what I needed, when I needed it. But perception of convenience would also be a major selling point. In the world of Amazon, I don’t blink an eye if I’m ordering similar services through four, or five separate vendors. To Anthony, it doesn’t matter if he has to go through multiple providers, either. The goal is crossing something off his to-do list. Nowhere did I get the impression that Anthony considers this ideal, but hey, if it works, it works.
A 52-year-old mother of three, named Dawn was the final participant in this grand experiment of mine. Dawn was apprehensive of me at first. Though after a few minutes of niceties, I noticed the light bulb above her head. She called me on the endgame logic, reddening my cheeks in the process:
Oh, I see. You’re a credit union fan and you’re having some sort of ‘what does it all mean’ thing going on. Ok, well I guess my thinking is that I have been with my credit union in California forever. I am happy with them. No fees, higher savings account rates, and they look out for me. But when I moved here, it just became harder and harder to stay loyal. It’s more than just the CO-OP network. I know that BofA is everywhere and I needed convenience. I had to open my account with them because I ultimately had no other choice.
Dawn, while also misinformed, reminded me of a very sobering fact: banks pour billions of dollars into marketing and advertising every year, well beyond what credit unions can do. I won’t say I have ever been surprised when someone admits they don’t know the difference between a bank and a credit union. Big banks are better recognized, their size perceived as strength, and often they offer the same perks and products as most any credit union.
After talking with people, however, it occurred to me that while most financial institutions seem to have a decent understanding of the transactional relationship with their customers or members, they often don’t go further than that. Remember, we serve people, and every person has a preference for how they conduct their lives.
At the end of the day, my feet aching and my mind whirling, I decided that it is not new technology or even the credit union difference that will win the war for people’s loyalty; rather, a genuine understanding of the individuals we serve. Our difference is lost on the masses. To continue to play that angle is assuredly valuable. But perhaps the difference has been lost on us, as well.
Empathy, my friends, is where you’ll find the answers.