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NORTHVILLE TOWNSHIP, Mich. – Just how differently do consumers perceive the advantages and disadvantages of financial institution brands? That was one of the questions an independent study conducted for the Michigan Credit Union Foundation was designed to ascertain. The “Financial Brand Image Study” conducted for the MCUF by the Berline Group and A&K Research also was intended to provide a clear summary of the perceptions of the relative strengths and weaknesses of each brand by CU members and non-members, bank customers and non-bank customers. As would be expected, the credit union image was stronger among members than non-members. However, even among non-members who indicated they usually thought of a bank as their primary financial institution, credit unions had a clear advantage over banks on being more likely to approve a loan, having low fees, and having low interest rates on loans. While results of the study confirmed credit unions’ strong image in the areas of customer service, rates and lower fees, they also turned up some interesting surprises. For example, in spite of the strength of the credit union brand, banks continue to be the top-of-mind selection when looking to open a deposit account, personal loan or line of credit or mortgage. Banks were typically perceived to have an advantage over credit unions on having a full range of financial products, being financially sophisticated, having federally insured deposits, and being a safe place to keep money. Most members and non-members surveyed realized that CUs offer checking accounts and personal loans, and nine in 10 members and eight in 10 non-members thought CUs at least “probably” offered personal line of credit, home equity line of credit, or mortgage products. Eight in 10 members and seven in 10 non-members thought credit unions at least “probably” offer retirement accounts, money market accounts, or financial planning. Among non-members, one-third or less thought these products or services were “definitely” available from CUs. The majority of both members (61%) and non-members (64%) thought there are restrictions on who can join a credit union. However between one-fourth and one-third though everyone is eligible to join a CU. Thrifts, savings and loans, brokerages all garnered a very small percentage of the mentions (less than 5%), indicating says the survey that these brands are “not significant players” in consumers’ minds for these services. Compared to thrifts, credit unions had a higher average rating for 12 out of the 14 statements tested. Credit unions also had a higher average image rating for 12 out of 14 attributed compared to full-service brokerages, but brokerages had a slight edge over CUs on financial sophistication and providing financial planning. When respondents were queried about their reasons for selecting a particular financial institution, the attribute listed most often for a bank was “accessibility/convenience/location.” The most often listed attributes for a credit union were “personable/friendly/nicer staff,” and “better/lower interest rates on loans.” The attributes of customer respect (personable and friendly staff) and better/lower fees rank at the top of what is important to a customer when selecting a financial institution, in general. `Thus, the credit union brand is in a much stronger position for market growth than the bank brand,” the study report states, adding that, “Banks rank higher on convenience, but this does not necessarily translate to satisfaction and long-term sustainable growth.” One eye-opening finding of the survey was that “the perceptual void among non-members continues to plague the growth of credit unions. Thirty-nine percent of non-members did not know why they should use a credit union. This is a significant obstacle to growth.” At the same time though, the study findings concluded that, “Banks are vulnerable.” Among respondents who claim a bank is their PFI, only 72% are very satisfied or satisfied, compared to respondents who claim a credit union in their PFI – 89% indicated they’re very satisfied or satisfied. “The research confirms that there is no advantage to the brand bank, as compared to credit unions,” the study states. Michigan Credit Union League President/CEO David Adams said the research “confirmed the brand `credit union’ is distinct from a bank, and those characteristics that define a credit union are significantly more relevant to the consumer than those attributes that are identified with a bank. Banks simply do not rank as highly as credit unions for most of the attributes that are important to purchase behavior.” Adams added that, “The survey concludes that becoming a bank does not improve the marketing position of a credit union. In fact, converting from a credit union to a bank charter may actually weaken a credit union’s marketing position.” -

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