The recent Bank Transfer Day was a watershed moment for the credit union industry. While some observers might attribute it to serendipity, it was no overnight success story.
For decades, credit unions have been true to their key principle of being singularly member focused. We stuck to our knitting in serving and lending to credit union members and maintained a prudent Main Street business model, while large Wall Street financial institutions simply did not. This did not go unnoticed by policymakers or consumers. It garnered us a wealth of goodwill that proved priceless in the current economic turmoil. Solid, steady results are exactly what the American public was seeking, and our industry delivered.
Certainly, missteps by large banks helped create the opportunity for credit unions to shine. Since the onset of the financial crisis in 2008, consumers had grown disgusted with the antics of Wall Street.
The onus now is on us. Credit unions must continue to uphold our industry’s sterling reputation by providing our members with the excellent products and outstanding service they have come to expect.
Reputation, though intangible, is a precious commodity that takes years to build but can be ruined in an instant by a simple mistake, misspoken word or policy decision that in retrospect may have been unwise. Unfortunately, in today’s global newsroom, bad news travels at lightning speed and is magnified on YouTube in a flash.
Let’s not forget it was social media that brought Bank Transfer Day to life. We need to recognize the new reputation-risk paradigm and safeguard our institutions and our industry on all levels. New technology, specifically social media, is a fresh currency in reputation management that we must wrap into our efforts to serve members and manage risks. A boon or a bust is just a tweet away.
Managing risk and reputation in the new frontier of social media requires constant vigilance. Credit unions need to have solid social media policies to protect against inflammatory comments or complaints becoming the buzz of the Internet and causing irreparable harm. Today, social media is often an extension, favorable or not, of a personal experience. Most recently, we have seen consumers turn quickly against Netflix. It was caught flat-footed by the reaction of its customers and the national media to its decision to no longer offer the DVD-by-mail service and unlimited streaming video for $10 a month. As a result, in just three short months, Netflix went from one of the great Internet success stories in history to losing, virtually overnight, 810,000 of its 25 million subscribers. Its actions were further complicated by its refusal to recognize and immediately deal with the backlash.
Of course, social media policies are only as good as the business practices they support, and a solid business model is something credit unions have in spades. In fact, it was this value proposition that not only led to the creation of Bank Transfer Day but made it a success for credit unions. At a time when our environment is dominated by 24/7 high-speed activity, people are hungry for that personal touch, and it was the promise of a trusted, personal touch that brought frustrated bank customers to credit unions. We didn’t split the atom or invent a new giga-anything. We simply asked them their names instead of their numbers.
As William C. Taylor, co-founder of Fast Company magazine said, “In a world defined by crisis, acts of generosity and reassurance take on outsized importance…. What we remember and what we prize are small gestures of connection and compassion that introduce a touch of humanity into the dollars-and-cents world in which we spend most of our time."
When people say how lucky credit unions were to benefit from Bank Transfer Day, I recall film industry legend Samuel Goldwyn’s famous quote, “The harder I work, the luckier I get.” While Bank Transfer Day was certainly a defining moment, handing our industry its long-sought national branding campaign on a silver platter, it was not a destination. Our quest to become the primary financial institution of choice continues as banks continue to play bank fee whack-a- mole.
Let’s keep up the hard work and see how much “luckier” we can get.
Fred R. Becker Jr. is president/CEO of NAFCU.
Contact 703-842-2215 or firstname.lastname@example.org