Hard Questions on Impact of Bank Transfer Day
With the one-year anniversary of Bank Transfer Day approaching, credit unions continue to tout how the national financial institution-switch movement helped catapult their new member figures into record territory. But that success has forced some credit unions to deal with unprofitable new accounts, an industry expert said.
“We may have underestimated the Bank Transfer Day switching lag and ensuing membership gains,” said Dave Colby, chief economist at CUNA Mutual Group. “Further, if members gained due to BTD are experiencing the real benefits of credit union membership, this surge will continue, as they spread the word.”
Daly said while it’s true that credit unions’ operating costs are lower than banks, there is a point at which they can’t be driven down any lower. Marketing efforts, new remote services and technologies to stay competitive can easily add to those expenses, he noted. For instance, mobile banking can be critical to attracting and retain members, but it doesn’t have a real impact on the operating costs for a call center.
“In fact, it likely shifts the Bank Transfer Day line for credit unions, moving even more members to the wrong side,” Daly said.