HOBOKEN, N.J. — With talk of ever-increasing competition in the financial services marketplace, Credit Union Times' reporting staff scoured the field asking credit unions what institutions they saw as their biggest competitors.
Credit unions of all shapes and sizes are feeling the squeeze of competition from other financial institutions and even each other, in addition to the sagging economy and tight interest margins. How are credit unions coping? Here's a scan of just a few.
"Clearly, banks, mortgage companies and insurance companies are competitors because we're all in financial services. We're taking a good hard look at our services. Our [credit union industry] service is being compared to not only other financial institutions but in retail such as Nordstrom or L.L. Bean. Credit unions have always prided themselves on their service. But are we as good as we think we are? We took a look at it and discovered we're not. We're looking at the internal as well as the external in terms of reaching out to the members. I think it's about getting out of the complacency as a credit union and perhaps as an industry. We have sat on our laurels as an industry. It's about moving beyond complacency.
Regarding standing out from the competition: The previous CEO retired last year. I came in as CEO in October. I've been with the organization for 30 years. It was a perfect opportunity to look at ourselves. It was a good time to build on the good things that have been developed in the past. The first thing we looked at was how do we establish relationships with our members–it starts with our employees. We looked at leadership versus management and instilling the culture of excellence. It's there. We know we have great things to offer to members because of how we run the credit union. It's a lot of looking in the mirror. It's not necessarily product offerings. We're looking more fundamentally at how we are operating as an organization. If service is what defines us, as an industry then we need to focus on that."
Debi Van Dorn,
President/CEO
Proponent Federal Credit Union
Nutley, NJ
Right now Commerce Bank is our biggest competition because they're offering seven day a week access. The thing is they've got this huge advertising budget to spend and these great hours but we are effectively answering the call of competition. The services are the same but the added value we provide is that we are here to serve the entertainment community's needs–Commerce isn't.
We also offer 200 ATMs in New York City and the five boroughs–more than every bank here with the exception of Chase, have 160 depository locations and because we have a location in Los Angeles our members can speak with an actual person from 9am to 8 pm so we're the home of the 11-hour banking day.
We're also in the process of revamping our Web site to be not only more interactive and easier to navigate but also as a way to showcase our members and position ourselves as a real resource they can trust. The bottom line is we make sure members and potential members are aware that our motivation is education and service over income and profit and that is a winning formula for the people we serve.
Steven Sobotta
Director of Marketing
Actors Federal Credit Union
New York, NY
For us our greatest competition is "time." Our members' greatest challenge is finding time to make those "smart choices" in financial decisions and if they perceive us as not being convenient, or easy to access, or see us in anyway drawing from their limited reserves of available personal time, we won't be the first choice in their minds. So we focus on creating opportunities, finding ways to make sure their time is well spent.
Deb McLean
Vice President Marketing/Business Development
Carolina Postal Credit Union
Charlotte, N.C.
I believe that our biggest competitor is Bank of America. It's the 800-pound gorilla in the room. BofA probably controls about 10% of the financial services business nationwide and approximately 24% in our marketplace. And our member survey data confirms BofA as our principal competitor.
We believe the key to differentiating ourselves is by providing an exceptional member service experience. Mediocre service is not going to cut it in this environment. BofA is a huge institution, where as we offer a much more personal touch along with the same wide range of services. But we also are watching our processes to ensure that they are as effective and efficient for us as possible. And, we make sure we are doing all we can to train and empower our employees so that they are equipped to deliver on our goal of exceptional service.
Mark Hawkins
CEO
Altura Credit Union
Riverside, Calif.
Our biggest competition is local credit unions specifically the largest three here in El Paso. We're fourth but they are great organizations and do lot of things very well. They are all very efficient, embrace technology, have good management and they are giving us a run for our money –which is good. It definitely makes us better at what we do.
For us we're looking at carving out our own niche in the market and ensuring we are satisfying the needs of that niche, which in addition to our core membership of city and county employees, is very much also the blue collar worker here. We've realized that we can't be everything to everyone. So now we're focusing on being the best in our niche concentrating on everything from technology and member service, to marketing to reach out to best serve that niche.
Ken Walters
Executive Vice President
El Paso Employees' Federal Credit Union
El Paso, Texas
My credit union is low-income designated. Therefore, we have payday lenders being used to subsidize [some member's needs]. To compete, we create programs that offer alternatives to payday lenders such as 'second chance' signature loans, second chance checking, overdraft protection and most importantly, educating members about the risks associated with payday lending.
Barbara Stephens
President/CEO
Houston Municipal Employees Federal Credit Union
Houston, Texas
Our biggest competitors in the market are the super regional and national banks. These organizations have built the largest delivery network of branch and ATMs in the market, outspend everyone in media buying and aggressively market to the upscale and large commercial businesses.
FORUM is focusing on niches within our geographic community and expanding our product line to offer services and delivery channels that are desired by our targeted segments. Community involvement is an important component of our efforts to be the local financial services provider that is missing in our market. We are being proactive with identifying financial needs and then developing new services or enhancing products to solve those needs.
Gary Irvin
President/CEO
FORUM Credit Union
Indianapolis, Ind.
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