ORLANDO, Fla. — If credit unions are going to survive the current economic crisis, they must revisit sacred cows, promote true differentiators and adjust capital use.
Credit unions are nimble, which is a big plus over their competitors, according to Sandler O'Neill Associate Director Peter Duffy. Right now, credit unions operate in a world where seven letters are competing for one piece of A-paper.
Credit unions must guard their culture and relationships with their members, Duffy said. At the same time, they must let go of the sacred cows that keep CUs holding onto branches that are not performing.
Additionally, credit unions need to change the way they view capital. Capital is not just a cushion for the bad times but also a tool for growing membership.
Credit unions should also emphasize their noncommodity attributes, such as marketing and promotion, location and people.
Three Rivers FCU Vice President of Member Services Jim Johnson agreed. Staff at all levels meet regularly to discuss how they changed a member's life. For example, one member service representative simply asked a member that came in for a simple transaction what his dreams were; turned out he wanted to retire to a mountain in Montana but figured it was decades off. Three Rivers worked out a plan that would get him to Montana within five years.
Additionally, the credit union sees great potential in the business services arena. Staffers go out on small business calls, not selling a service but offering employee education on various financial matters. “That's been a very effective tool-getting personally involved in small business,” he commented.
Deepening these relations and all member relationships, Johnson said, increases wallet share, provides new funds on deposit as well as new places to lend, presents investment opportunities and gives the opportunity for the referral of new members.