It likely won’t surprise readers of CUInsight to learn that in the U.S. there exists roughly the same number of credit unions branches as there are traditional bank ones, and yet only 10 percent of overall dollars sit in credit unions. So why is that the case?
At a time when America’s trust in traditional institutions like big banks sits an all-time low, shouldn’t more Americans be trusting more of their hard-earned money to credit unions, which are so clearly more aligned with pleasing members than shareholders?
Now, amidst the Covid-19 pandemic and ensuing financial upheaval, credit unions are truly rising to the challenge by extending real help to financially distressed members through low or zero percent interest loans, fee waivers and more. These tangible demonstrations of assistance to both small businesses and communities overall are the embodiment of what makes credit unions so valuable in the first place.
So where is the disconnect?
One reason comes down to branding. Credit union CMOs are far too often focused on selling credit unions as a generic category, rather than telling a particular credit union’s story in a way that connects with people within the community. The typical “credit union good, big banks bad” messaging only seems to be muddying the waters among all credit unions. If it was working, more of our collective dollars would be in credit unions.
Big bank marketing is derivative and insincere, we all know that, but they excel at one thing in particular: developing apps and consumer experience technology that customers want. Where does that leave credit unions?
With the opportunity to do two things: One is to think beyond traditional brand marketing and more about meaningful brand actions, get granular in how your CU integrates with the community; and two, innovate the customer experience and reimagine products and services that serve as an antidote to the things people hate about traditional banks.
Credit unions may not be able to ‘out-tech’ the big banks, but they can get pretty close, and what they lack on the tech side they can make up for by engineering a sense of humanity back into the banking experience. Right now, in the midst of one of the greatest financial crises the country has ever faced, credit unions have the opportunity to grow deposit share by truly differentiating themselves further from big banks.
What does that look like exactly on the ground, proverbially speaking?
Perhaps it’s something as obvious as renaming “checking” accounts to something that’s reflective of the fact that so few people actually write checks anymore? Maybe it’s a hyper-localized ad campaign where those in the community instantly feel a kinship that showcases the power of members investing in each other? Or maybe it’s creating a banking app that combines traditional transactional services with unique ways for members to connect with each other? Or perhaps a social media campaign that spotlights community initiatives that need assistance and shows members how they can donate their time or money to the cause?
The tactics may vary depending on your own credit union’s strengths and weaknesses, but what matters most is telling your brand’s story authentically and connecting it with real action that impacts the lives of the people in the communities you serve.