BY CORINNE KALSKY
When it comes to generating credit union sales, there is a right way and a wrong way of going about it. Using the Wells Fargo scandal and, in contrast, United Federal Credit Union as case studies, CUB reveals the correct approach for creating member relationships that are built to last.
Much has been made of mega-bank Wells Fargo’s recent disclosure that employees opened an estimated two million fake accounts for customers in a misguided attempt to achieve aggressive sales targets. Wells Fargo has fired 5,300 employees over the past five years for reasons related to the scandal, and the bank has agreed to settle with regulators for $185 million. CEO John Strumpf has been called to Washington several times to testify before both the Senate and House banking committees, and as of this writing, he has agreed to forfeit $45 million of his personal compensation.
There are certainly lessons to be learned for all financial institutions, and this scandal places the obvious pitfalls of aggressive cross-selling in sharp relief. But most credit unions choose a different path, one that is consistent with the movement’s cooperative, member-owned philosophy, and some have taken innovative approaches toward building loyal, long-term member relationships.
A Challenging Landscape
Today’s credit unions face multiple, daily challenges on a variety of fronts. In the post-recessionary era, historically low interest rates have pressured margins and reduced net worth ratios. Competition from new challengers, including so-called “alt lenders” and online banks, has increased.