BY JOHN DAVIS
Competing with big banks tops many credit union’s concerns. Digital services may be just the ticket to leveling the playing field when it comes to attracting two big market segments: younger members and small businesses. Learn how to leverage digital tools to your CU’s advantage.
Trust in banks has never really recovered from the financial crisis of 2008. The idea of the friendly local bank manager, already on the wane, was broken completely. Customers have since struggled to believe that banks truly have their interests at heart. In fact, according to research from PricewaterhouseCoopers (PwC) less than one in three customers now trusts their retail bank.
Meanwhile, trust in credit unions remains steady. According to a Harris poll, only 18 percent of Americans say that their trust in credit unions has declined over the last few years,with 77 percent still trusting credit unions.
This trust hasn’t translated directly into success for credit unions. The struggle of many credit unions to grow and of some even to stay afloat has been well reported. This seeming contradiction is explained by an aging customer base – the average age of a credit union customer is 47. Because credit unions need borrowing as well as saving to survive, an aging customer base is a problem. As a rule, younger people tend to borrow, and older customers tend to save.
Digital has been talked about as a potential solution to this problem.For many customers, especially younger ones, digital banking isn’t the new way to do banking or an added extra;it’s the main way they interact with their financial provider. Retail banks may be behind credit unions when it comes to trust, but they are way ahead when it comes to digital provision. Even for those credit unions that have online services, mobile banking and call centers, such services are rarely joined up in a satisfactory way.