Are Credit Unions ‘All’ About Their Members?

When was the last time your credit union asked members what they want? Bringing them into the conversation is one way to develop a truly member-centric lens.

Are credit unions truly member-centric?

That’s a tougher question to answer than the movement might want to admit.

This year, the senior leaders at Callahan & Associates are focusing on a big idea through commentary, speaking engagements, on-site presentations, and more. Our big idea? Pushing credit unions to ask tough questions in 2018.

The tough question I’d like to explore is whether credit unions are truly member-centric or are they hiding behind a wall of words. How does a credit union determine into which camp it falls? And how can more move into the former?

Because credit unions are member-owned, there’s a tendency to think that everything they do is for members. It’s easy to hide behind those words and not actually live them. But members know the difference.

Sure, a credit union might offer the savings and loan products and delivery channels that today’s consumers expect. And its rates might be better, its loan terms a little more flexible.

But that’s just table stakes. Being member-centric means more than that. It means understanding the changes and challenges members are experiencing and having the imagination and institutional agility to respond. And sometimes it means putting the membership as a whole ahead of an individual member.

To get there, you have to ask tough questions of yourself and of them. Bring members into the process, engage them in new ways to find out what they need and want, and then figure out together how to deliver.

What’s The Big Idea?

Asking tough questions will help the credit union movement flourish. Make Callahan’s Commentary on a regular stop for insight on thinking differently about tough questions and framing strategies for success.

In It To Win It

The battle for consumers’ business is often won at the margins. Credit unions have their core membership, but frankly, it’s aging. So, who’s at the margins? Those are the people who see a financial institution only as a place for their direct deposit. They go elsewhere for their economic life for their mortgages, everyday purchases, and cash flow.

That’s a big margin.

Americans between the ages of 20-36 now form the largest of all demographics. For survival, credit unions need to be thinking strategically and tactically about how to deeply, and for the long-term, engage this substantial group. That can start by considering what the preceding generation is looking for.

I fall smack in the middle of Generation X roughly those between the ages of 37-57. We are at our prime borrowing, saving, and planning years, and we’re not as technologically challenged as you might think. I haven’t visited a branch in years. Instead, I move money around weekly using Venmo and use RDC for those random checks I receive. You’re likely to see me on the sidelines of the soccer pitch with my Square reader taking credit card payments for team funding and missing a key play while scrolling through Zillow listings.ContentMiddleAd

At a recent Callahan roundtable, the talk turned from strategy to specifics when three of the millennial attendees spoke about their own financial habits. Watching the others in the room was like seeing a camel come in from the desert they were at the oasis soaking up all they could. It was great, but it also felt like something they hadn’t done a lot of before. And how can credit unions be member-centric if they aren’t talking to their members?

The Constants Of Change

It’s not just about how to bank, either. The only constant is change, and that change seems to be accelerating as the financial lives of millions of Americans becomes more uncertain, particularly among those who consider themselves comfortably middle class.

That largest demographic? Millennials. Its members are entering the workforce with huge loads of student debt. They’re working longer hours, without benefits, and without much of the certainties the American workplace used to routinely provide for millions of people. These factors combined will increase the age of retirement for years to come.

Consider the rise of the gig economy. What can the credit union do for members with fluctuating incomes? Members whose income depends on their next ride and the ride after that? Members who might have a traditional job themselves but whose household also relies on the income of an immediate family member who doesn’t?

Does the credit union know these members are there? Does it know who they are? What are the right questions to ask? What’s the best way the credit union can get the intelligence it needs to make the right decisions for members?

There’s no single answer to these questions. But it’s imperative credit unions ask them.

Answering tough questions requires honest assessment, introspection, and consultation. It’s an arduous process, but tough questions demand nothing less. Callahan’s Strategy Lab helps credit unions think differently about how to frame challenges and develop answers. Learn more today.

In 2018, I’m going to use this column to prod credit unions to make sure they are walking the walk, and I’ll showcase credit unions that are doing so. I’ll explore how credit unions are anticipating the financial needs and wants of members and how they are designing products, channel access, and financial education to serve a changing marketplace.

Callahan can help you think about how to ask those questions and what to do with the answers, but only you know what’s the best strategy for you and your members. That begins with asking tough questions and being willing to make the changes that will matter.

The long-term viability of your institution and the financial cooperative movement itself depend on the answers and action arising from these kinds of questions.

And they better be member-centric.


January 17, 2018

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