By Ray Birch
ANN ARBOR, Mich.–The trendline is clear about the “slow, steady decline” in member satisfaction with their credit unions, perhaps the result of service offering shortcomings the pandemic has exposed. Whether credit unions reverse that decline will depend on recognizing how service delivery is changing and whether CUs make the right investments, according to one person.
An ongoing decline in how satisfied members are with their credit unions is a critical point credit unions need to realize, according to David VanAmburg, managing director of the American Consumer Satisfaction Index (ACSI), which conducts the ACSI annual consumer satisfaction study. And as CUToday.info has extensively reported, credit unions have fallen behind banks in ASCI consumer satisfaction scores for two consecutive years.
Making matters worse, VanAmburg pointed out that during the pandemic member satisfaction with their credit unions has slipped more than banks.
In the latest ACSI study, credit unions fell 2.5% to a score of 77 on a 100-point scale. The nation’s banks achieved a score of 78. As CUToday.info reported in 2019, credit unions fell behind banks when it came to consumer satisfaction for the first time in ACSI history.
The 77 satisfaction score given credit unions by Americans in 2020 is the lowest ever and 10 points below the peak CU score of 87 in 2011.
A Tradition Loses Its Strength
VanAmburg said credit unions should be concerned, but added there is a way for CUs to solve the challenge.
“I don’t think it’s any failure on the part of credit unions to provide good service, as we understand traditional face-to-face customer service,” said VanAmburg. “Credit unions have made a name for themselves there.”
But the decline in satisfaction levels during the pandemic is an indicator, VanAmburg suggested, of a shift in consumers’ preferred channels of service delivery where credit unions are coming up short.
“To what extent traditional customer service matters anymore to banking customers, I am not so sure,” VanAmburg told CUToday.info. “Digital banking has really taken off and really resonated with customers and members of all financial institutions.”
VanAmburg said credit unions that have not refined their digital service delivery, offering superior and frictionless service through these channels, are being exposed by the pandemic.
‘Banks Had a Leg Up’
“The great rates, the personalized attention, that has not changed at credit unions,” explained VanAmburg. “But these hallmarks of credit union service were somewhat taken away from them as we have had this period of time when consumers are not going into branches. They are instead using ATMs, drive-thrus, their phones and laptops.”
All of those channels are channels in which most big banks had already made substantial investments, said VanAmburg.
David VanAmburg
“The big banks had the leg up. They were already pivoting,” he said. “They have become very successful with digital banking. Huge banks, like Bank of America and Chase, have all these cool bells and whistles with digital, all this sizzle and shiny objects. Credit unions being smaller, they having less resources and are now trying to catch up. Digital has become a necessity and created a problem for credit unions.”
The bottom line: Consumers are placing less value on the traditional hallmark of CU service delivery, friendly in-person service, in favor of speedy digital delivery even though it’s less personal.
It’s a problem the credit union industry cannot ignore, VanAmburg said.
One Surprise
VanAmburg said it is somewhat surprising how credit unions have seen greater decline in member satisfaction scores than banks during the pandemic, as credit unions are well known for sacrificing the bottom line and working hard to help members during economic downturns.
“But there is a difference between a short-term and long-term reaction to what is happening now,” said VanAmburg. “I think what we may very well be seeing in the short-term is a negative reaction to credit union service, how they are faring now with digital delivery. However, we could see a rebound in credit union satisfaction scores from longer-term consumer reactions from all of the goodwill credit unions are developing now with members in helping them through this crisis.”
VanAmburg asserted that credit unions bending over backward to help members in the current market is a different kind of service than what consumers experience with day-to-day transaction-based banking.
“That extra effort credit unions are making now to help members, that type of service may not be as tangible to consumers as the daily banking experience,” he said. “If I just have to evaluate my transactional experience today at the bank, I'm going to give it a certain rating—‘Did I like my experience today?’”
A Double-Edged Sword
VanAmburg suggested history might repeat itself.
“Turn the clock back, and coming out of the Great Recession we saw that huge gap between banks and credit unions as more and more people were leaving banks for credit unions,” he said. “They were feeling that they could not trust their bank. So, we may very well see that same sort of effect coming out of the COVID crisis.”
And yet that potentially positive development is also something of a double-edged sword, VanAmburg acknowledged.
“Since 2015, it’s been a slow decline for credit unions,” said VanAmburg. “It’s a little bit of be careful of what you wish for. Coming out of the Great Recession, more consumers were turning to credit unions. But as you grow there can also be growing pains—it can be tough to keep up with all of the new members and provide the same level of really high-quality service.”
‘Killer Positive Scenario’
VanAmburg said it is going to be important for credit unions to find ways to blend traditional, friendly, face-to-face service with digital delivery methods.
“If they can combine these things successfully, this could be a real winner for credit unions,” said VanAmburg. “If I say, ‘Look I can do all the cool, speedy digital things at my credit union that I can do with Chase, and I get all those other things I always get from my credit union—friendly service and great rates—I’m sold.’ This could be a killer positive scenario for credit unions.”