ATLANTA—It’s time to stop telling the CU/bank difference story and focus on the credit union’s local value proposition, insists one consulting and marketing firm.
That’s one key step to keep credit unions prospering into 2020, according to Level5. Another key: paying closer attention to market “disruptors.”
John Hyche, Level 5
John Hyche, senior vice president/principal, emphasized that credit unions must explain their value proposition to the local market in a way that is relevant to members and potential members.
“In past years, credit unions were fixated on trying to explain the legal or technical differences between credit unions and banks,” said Hyche. “I think we’ve learned that the market doesn’t really care about the nuances—it cares about results. The future marketing message will be: ‘Insert-Your-Name-Here’ Credit Union offers valuable financial solutions and they’re available to you.’”
Credit unions have enjoyed an advantage in the wake of the Great Recession, with big banks and bankers “vilified” by the news media and government, said Hyche, who added keeping that advantage is all about CU performance.
“As the recovery proceeds, personal service is important,” he said. “Ensure you have a thriving service culture from top to bottom in the organization. Create member value. Bankers have long argued about the ‘unfair’ advantage of credit unions’ tax exempt status. Exploit this advantage by running efficient shops that enable credit unions to offer better deposit and loan rates and lower fees. Squandering the advantage in ways that do not provide tangible benefits to the member must be avoided.”
Hyche pointed out that the financial services industry is currently distracted by “disruptors,” saying there are two general categories: core business disruptors and transactional disruptors.
“Core business disruptors are those companies that want to supplant the role traditionally held by banks and credit unions in providing deposit and loan products,” explained Hyche. “Credit unions must maintain a focus on their core business and be able to articulate the differences and dangers associated with the disruptors.”
Transactional disruptors, said Hyche, are those companies that seek to give people alternative ways to access or transfer their money.
“The current rage is mobile payments, with Apple Pay leading the pack,” said Hyche. “Over the next five years I believe the ‘noise’ in this area will subside, with some clear winners identified by the public’s adoption of a format—the old VHS versus Betamax debate. While I can’t predict the winner by name, the product or products will be simple and intuitive to use, will be broadly accepted, and will be perceived as secure.
Hyche also pointed out 2020 will be here soon enough.
“2020 used to sound like a distant horizon, but it’s practically around the corner. Some car loans made today have terms extending past 2020.”