Leveraging FOM Community Advantage in Web Strategy

Credit unions have the unique opportunity to provide Web 2.0 community platforms to enhance their position in the local community and differentiate themselves from the global internet marketplace.

 
 

In just the last decade the Internet has dramatically expanded our definition of "community." Before the Internet, our sense of community used to be almost exclusively about our local affiliations - neighborhoods, schools, places of work and worship, local politics, sports teams, and clubs as just a few examples. Credit unions were founded around these community groups based on a focused understanding and identification of their unique needs. Today, we increasingly communicate and engage with newer global communities of people with similar ideas and interests.

Global but not yet Local
These global communities brought about by the Internet are undeniably a remarkable feat in human history. However, the Internet has been only mildly successful at enabling local communities to engage with themselves. So, for example, while we can now easily find and communicate with hundreds of Siberian Husky owners across the world, we still stumble when it comes to using the Internet to easily discover and discuss the needs and opportunities impacting the local community. Certainly there are web sites that advocate specific community issues or organizations, but these are typically very focused in purpose and not necessarily widely identified web destinations within the community.

The Credit Union Identity Challenge
Credit unions were early leaders in adopting the Internet to provide cost-effective service convenience to members. In 1993 Stanford FCU ($772M in Palo Alto, CA) launched the world's first Internet banking application and by 1997 nearly 800 credit unions had web sites (source: Callahan's Credit Union Technology Survey). This internet technology leadership helped to differentiate credit unions in the broader financial services marketplace.

Today, at the core, the website or “e-branch” is rarely a significant differentiation point despite the importance of the internet channel. Nearly every bank and credit union over $20M in assets now offers a web site service channel. The largest banks are now often the first-mover adopters of the latest internet technology. Still, visit any of these bank and credit union sites at random and you will likely find the same basic structure: products, rates, online banking, financial education, applications, and even news about community involvement. In fact, strip away the logos and design colors and it is often hard to differentiate between a credit union and bank website. Is it any wonder why the general consumer remains confused about the differences too?

Perhaps the most significant identity challenge component is that along with global Internet communities comes the highly competitive global Internet marketplace. ING Direct and HSBC serve as wake-up call examples of how fast and easy the Internet has enabled significant product competition on a global scale. As more and more consumers within our traditional fields of membership engage in the global marketplace differentiation through our unique member advantages must be front and center. If the credit union website does not feel different from the international bank with great rates, why would a consumer feel compelled to join?

A local community web opportunity for credit unions?
Credit unions may have a unique opportunity to leverage their position within their local geographic or affinity-based communities to bridge the gap that currently exists in local web communities and more clearly differentiate the credit union’s identity in the broader financial marketplace. The concept is relatively simple and based on Web 2.0 community principles: provide the website facilitation platforms where the community (both members and potential) can communicate with itself about the needs and opportunities that matter specifically to them.

In concept, these platforms would be structured 21st century bulletin boards and could contain community blogs, classifieds, discussion forums, events calendars, and more. Each credit union's membership community, either SEG or broader community, would likely have specific issues of particular relevance to them that are more unique in the broader environment.

Simply providing the platform extends the credit union’s presence within the community in a similar way that a local community restaurant may choose to cater a political event for free, or a radio station sponsorship of a live concert, or bookstore market signings for local authors. The big difference is that this now happens in virtual communities where participation is open and highly convenient. Credit unions should take this into consideration as they look for innovative ways to leverage the internet in their website strategy and design.

Join Callahan & Associates and credit union peers for an interactive webinar exploring credit union website design strategy. Among the speakers and topics addressed we will hear from William Azaroff, Interactive Marketing & Channel Manager for Vancity Credit Union, about their experiences in launching an online "Web 2.0" community where members and perspective members can communicate about issues and events important in their local community. Learn more

 

 

 

March 19, 2007


Comments

 
 
 
  • Agree! Websites help level the playing field and there is a lot of untapped potential for reaching memberships and creating bonds through a well thought and member-focused website.
    Anonymous
     
     
     
  • I agree Scott. We''ve been running ChangeEverything.ca since July 2006, we have 1,000 registered users and over 2,000 user-generated comments and posts and have not had to remove a single one. If what you are doing is honest and genuine, there is little to fear. Having said that, we did invest in a community moderator to help grow the community, so there has to be some investment into human resources to make a community work, and not everyone can afford that expense.
    William Azaroff
     
     
     
  • A good point about people using the platform to complain about the CU. The issue you raise is a common concern among organizations that consider participating in social web 2.0 platforms. eg. "Will the community use this against me?"
    I would argue that the opposite might be true in practice and that organizations will generally be praised by the participants for the vision and support of the community channel. Also, in a truly active online community this kind of backlash tends to be the exception and not the rule. When it does occur self-policing of discussion tends to win out. Still, credit unions may be wise to maintain the right to remove commentary that is defamatory or rude in nature.
    Keep in mind that if the platform is about the community, and not about the credit union, I think the focus of the vast majority of conversations & posts will not be about the credit union. The bigger challenge really is to connect with an audience to make the platform even relevant (before worrying about what happens after success). It will be interesting to hear from Vancity Credit Union''s experience with ChangeEverything.ca since I''m sure they have experience and thougths in this area. CU Blogs would also face the same potential challenge.
    So, another question might be: Does the potential downside outweigh the potential opportunity?
    Scott Patterson
     
     
     
  • This is all very true but the reality is that smaller credit unions don''t have the resources to manage the ramifications of web 2.0 social web applications. While opening up the website to allow member and non-members to communicate sounds like an admirable thing to do it presents a major challenge for the credit union becuase they would have to assign their already stretched thin resources to monitoring the activity on these platforms. People love to complain and what these applications would turn into is a place to bash the cu. This could hurt the cu''s brand more than help.
    CU Webmaster