How Credit Unions Can Set Themselves Apart

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How Credit Unions Can Set Themselves Apart

Many people use Credit Unions because of their lower rates on loans and higher interest rates for savings accounts. But when there is a choice among credit unions, service becomes a key differentiator. Three ways a credit union can set itself apart from competitors include providing financial advice; prompt and relevant communication; and active community participation. 

Financial Advice

Because they are member-centric, Credit Unions often offer programs designed to educate depositors about managing their money. Credit Unions can provide a unique name for themselves by serving up financial counseling that provides members the necessary tools to gain control of their finances. Finra’s most recent National Financial Capability Study, from 2018, found that many U.S. citizens are financially illiterate: Just 34% of individuals can correctly answer four or five questions on a basic five-question financial literacy quiz.

Offering financial counseling may positively influence behavior and reduce debt, according to an FDIC study. In addition, financial counseling offers credit unions the opportunity to know more about the members who take advantage of such services.

Communication 

The best time to learn what members want is when they are in the branch doing business. Tellers can create opportunities by talking to members and discovering their interests. By turning transactions into conversations, tellers can build strong, long-lasting relationships. 

Today’s members want flexibility in account communication. Allowing members to select how they’d like to communicate— whether through texting, email or phone calls— shows them consideration. 

Studies have found the public in general prefers communicating with their business partners via texting. An American Express survey conducted a few years ago reported that more than 60% of the respondents preferred a digital tool such as online messaging to phone calls, emails, and in-person visits for simple inquiries. For Credit Unions, a short text can quickly check on the progress on loan applications and can prompt action from members whose applications seem to have stalled. And, unlike email which is easily ignored, an overwhelming number of texts — 95% — are opened, research has found.

Community

According to the CFI Group’s most recent Credit Union Satisfaction Index, 82% of members say it’s at least somewhat important to bank with an institution that contributes to local community projects. For many, knowing that their credit union has a positive impact in the community is important. 

Unlike large national and online-only banks, Credit Unions are member-owned, not-for-profit financial cooperatives that directly contribute to their hometowns. Credit Unions are conscientious neighbors, participating in their communities, ready and willing to provide sound financial advice as well as communicate in an appropriate and relevant manner — and should proudly market that. 

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