By Ray Birch
MADISON, Wis.—Could perceptions of credit union service be making a comeback in the eyes of consumers?
A new study from the Filene Research Institute has found cooperatives are now beating banks when it comes to innovation, a key driver of member loyalty and brand image. The new report further reveals credit unions are doing better than banks with “social innovation.”
As CUToday.info has extensively reported, for the fourth consecutive year credit unions’ score in the American Customer Satisfaction Index (ACSI) has fallen below banks, now standing at 75 on a 1-100 scale. That research has found banks now surpass credit unions in nearly every service category as rated by American consumers, with ACSI explaining banks are seen as more digitally savvy and more innovative.
Digging into the Data
Gina Woodall, vice president and group director of Rockbridge Associates, which partnered with Filene on the study, dug into the data to show how credit unions compare to other financial services organizations on innovation.
“It is always interesting to dig into the data to see where credit unions land,” she said during a recent Filene webinar that shared results from Filene’s “Year 2 of the Credit Union Innovation Success Study.”
Pointing to a chart (see image, below) from the new study, Woodall said, “You can see credit unions in that dark green box. Anyone who is a member of a credit union is included in this sample, except Navy Federal. We do split them out since they have a larger member base. You can see credit unions are higher than a lot of banks, in terms of innovation, even though they're not known for innovation, necessarily. So, they are definitely doing well, and credit unions are holding their own across the competition.”
No Surprise
And it is no surprise who is ranked above credit unions, Woodall acknowledged.
“We can see that a lot of the fintechs—Chime, Cash App, Sophi, PayPal and Venmo—tend to be ahead of credit unions in terms of innovation. Navy Federal, though, is holding their own with fintechs at the top,” she said. “But Navy Federal has a lot more resources and a bigger brand perception than most credit unions.”
Banks, overall, have shown a general decline across financial services, when it comes consumers’ perceptions on innovation, Woodall pointed out.
“We are seeing it in other industries as well,” she said. “What we've seen over the past six years, in general, is that innovation through the pandemic just skyrocketed. Everyone was thinking about their business model and how to adapt to the crisis. But now things are stabilizing a bit and they've dropped a little in the last year. We also know that banks are challenged in other ways, with closing branches and consolidating resources. So, we see a general decline there.”
Specifically, Woodall said Wells Fargo is down eight points. PNC is down seven.
“All in all, credit unions are doing quite well,” she said.
Credit Unions & Social Innovation
Turning to social innovation—which measures how well an organization innovates in a way that benefits society and the environment—CUs are faring well, again, Woodall said.
“Credit unions are even a little higher on social innovation in terms of comparison to their competitors,” she said. “Navy Federal comes out on top, tied with Chime, as the most socially innovative organization.”
Woodall said the latest data show CUs are experiencing some declines in social innovation categories, but noted that banks are dropping at a faster rate.
“We do see a little bit of a decline with credit unions,” she said. “But some of these banks have even greater declines. Capital One went down five points on social innovation, and we see others.”
All About Perception
Woodall stressed the impact innovation and social innovation have on consumer perceptions.
“Our research has shown that innovation is a strong driver of customer loyalty,” she explained. “We don't innovate just to innovate; we are talking about innovation that really matters, innovation that actually is noticed by customers—in terms of how you're innovating, in terms of affecting the value proposition, how you're delivering to your customers, how you treat your customers, and more.
“All of those things are noticed by customers and can lead to feelings of being excited to do business with you. When customers feel fulfilled and pleased with their relationship, that leads to overall brand attractiveness, which ultimately leads to loyalty.”
Are You Being Gouged for Bank-Like Subscription Fees for Old News? Here’s a CU-Like Way to Fix That
The biggest, best and freshest news reporting in credit unions remains free! Each morning CUToday.info delivers its daily Fresh Today news update offering the latest headlines and breaking news right to your email, with the easy-to-read headlines format allowing you to click on the stories that interest you most in order to learn more. So stop paying those bank-fee-like subscription prices from other so-called “news”” publications!
If you haven’t yet signed up for the new email solution on which CUToday.info has partnered with ResponseGenius, you can do so here. Signing up requires less than one minute of your time—and it’s free!
Please note that after signing up you may need to go to your Spam/Junk folder and mark the morning headlines email as safe. CUToday.info does not provide its list of readers and emails to outside parties, and we will not be contacting you to sell you an extended warranty or sending you any links so you may cash in on an inheritance you didn’t know was coming.
And did we mention it’s free?