Credit unions were founded on the righteous principle of “People Helping People”. For example, a plant worker’s car was wrecked and he needed a car to get to work. So, co-workers formed a credit union, pooled their savings and a loan was made for the car. This People Helping People mission has been part of the credit union psyche from day one. After all, there’s no one else in the financial services space that’s member-owned, has deep roots with a People Helping People mission, and is even recognized with tax advantages based on this altruistic foundation.
But it seems as though many credit unions have lost sight of that “People Helping People” philosophy and are acting more like all the other financial institutions (FIs).
It brings to mind the 1960’s Righteous Brothers classic “You’ve Lost that Loving Feeling.” As the lyrics implore, it’s time to “Bring back that lovin’ feelin’ Whoa, that lovin’ feelin’ Bring back that lovin’ feelin’ ‘Cause it’s gone, gone, gone And I can’t go on, whoa…”
Credit Unions, your People Helping People mission is your ace in the hole. It’s what sets you apart and engenders such loyalty, so let’s bring back that lovin’ feelin’!
So how do credit unions bring back that lovin’ feelin’? It’s actually pretty simple with a little disciplined and concerted effort.
First, make sure “improving the financial well-being of members” is part of your mission. This doesn’t mean you shouldn’t make a profit to support growth, deal with rising costs, increase staff compensation and grow capital & reserves. But it does mean that you should balance the income and expense side with service to members.
You must also provide the products and services that members need so that you are “in the game” to meet members’ needs whether they are millennial, middle-aged or retired. Know the different product and technology needs of 20, 40, 60, and even 80 year old members and provide solutions as members look to their credit union as their trusted financial partner.
Is your goal to increase wallet-share and become the primary FI for your members?
- First, understand that your competition for wallet-share comes in many forms and all use technology and digital marketing assets plus AI to attract YOUR members. To think otherwise is the ostrich approach, “sticking your head in the sand”.
- Embrace technology and provide the products, services, and digital solutions demanded by members, especially younger members, as they are your future.
- Seek “solutions partners” that provide the needed products, services and expertise as you cannot develop these yourself AND stay on top.
You must gain an understanding of how technology has changed virtually everything in the financial services space. For instance, for that bread-and-butter auto loan, members used to come into the branch, fill out an auto loan application, go buy a car and the credit union made the loan. Today, members start their vehicle search online 24/7 and are presented many competing FI “instant decision” credit opportunities. The member buys and finances the vehicle and the credit union never even knows the member was in the market for a car. Embrace these digital resources and stay in the game for auto loans.
Don’t be afraid to charge reasonable fees for your services. There’s been talk recently about eliminating overdraft fees. Improving the financial well-being of members requires you to work with members regarding their cash flow needs and overdraft checking, lines of credit, and overdraft charges are necessary. However, if you believe your overdraft fees are too high, then take a look at the big picture of helping members while balancing the fee structure.
And speaking of reasonable fees and saving members money – take a good look at your bread-and-butter auto loan portfolio. Members spend more on autos in their lifetime than any other asset, except perhaps a house. Credit unions are the only ones in the auto vertical with a People Helping People mission and technology now allows you to help members easily research, buy, finance and protect their vehicles. Embrace these digital solutions or your members will gravitate to the dealers, internet marketers and big banks where maximizing profit is their goal. You already promote member savings on credit union financing, but don’t forget about the multitude of protection products that dealers gouge your members on with each transaction. Your credit union alternative for these products typically saves members thousands of dollars and also provides nice fee income to the credit union. This presents a win/win, so aggressively market all aspects of your auto lending solution.
Credit unions, it’s time to bring back that lovin’ feelin’ in 2022 and it all begins with a simple look at your mission. Are you a People Helping People organization? Is improving the financial well-being of members part of your culture and does your team understand and embrace this as part of your mission to members? If not, you’re missing out on the key differentiator of credit unions, and an excellent opportunity for growth and success.
Click here for a look back at that Righteous Brothers classic and bring back that lovin’ feelin’.