By Ray Birch
LOMBARD, Ill.—Just how well are credit unions serving members during the pandemic? Not as well as the CU community believes, one analyst is suggesting, citing new data that indicate banks are doing a better job of reaching out and meeting consumers’ needs during the health crisis.
Megan Cummins, Strategic advisor at Raddon, a Fiserv company, spoke with CUToday.info regarding recent Raddon Performance Analytics data that reveals not only do credit unions have issues with how the definition of service is changing---as it rapidly evolves away from personal, face-to-face service to digital delivery where speed and efficiency are paramount--but also with how they have reached out to consumers during the COVID-19 crisis.
As CUToday.info reported, credit unions for the second year in a row have fallen behind banks when it comes to consumer satisfaction, in large part to being rated at a “historic low” in one respected national survey.
Credit unions fell 2.5% to a score of 77 on a 100-point scale in the 2020 American Consumer Satisfaction Index (ACSI) conducted by the University of Michigan in conjunction with the American Society for Quality in Milwaukee and CFI Group in Ann Arbor, Mich. The nation’s banks achieved a score of 78.
As CUToday.info also reported, for the first time in the history of the survey, in 2019, fell behind banks for customer satisfaction. Meanwhile, 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.
Similar Findings
Saying Raddon data indicates CU service levels have been sliding, as well, Cummins added that an important question asked in gathering the latest Performance Analytics data reveals a flaw in credit unions’ approach to service.
“When we asked consumers, ‘Did your financial institution reach out to you during the COVID-19 crisis?,’ many more consumers from the big banks said not only did their bank reach out but they're feelings about that institution really improved because of that,” said Cummins, who noted she was surprised by the finding. “This is an area where I thought credit unions might be able to improve over banks, given their reputation for the personal touch, and reach out to consumers more than banks—and they just didn't.”
Megan Cummins
Raddon data show that 41% of consumers in the study said their financial institution reached out to them.
“So, we're starting at 41%,” said Cummins.
Of that 41%, 44% of primary bank customers reported their big bank reached out to them during the pandemic, compared to 34% of credit union members who said their credit union reached out to them.
The ‘Interesting Part’
“And here's the more interesting part of that, 26% of those primary bank customers said their opinion of their bank improved, whereas only 7% of credit union members said their opinion of their CU improved,” said Cummins. “The banks are getting ahead of credit unions in service as we speak, during the pandemic.”
Cummins reiterated what other experts have expressed regarding CU service during the health crisis.
“I really thought credit unions would have been the ones that had succeeded with this aspect of service, reaching out to consumers,” she said. “But that’s not the case.”
As CUToday.info reported, David VanAmburg, managing director at ASCI, said his organization’s study showed similar results—CU satisfaction scores have declined more than banks during the pandemic.
The Crux of the Problem
Cummins believes the problem during the health crisis for credit unions is most CUs don’t want to be seen as being too intrusive in the lives of their members.
“Many credit unions are afraid to be too invasive—they don't want to send too many emails, they don’t want to seem annoying…” explained Cummins. “I think they probably sent out two communications to members during the pandemic and then thought that's enough. Whereas the major banks were probably communicating more often.”
Cummins attributes credit unions being less “aggressive” in calling members during the pandemic to a lack of a sales culture within the organization. She said she believes that impacted the number of times the credit union reached out, despite the reason for the call not being sales.
“There are many credit unions that definitely have a sales culture, but there are still many that don't,” Cummins said. “I think that has hurt them.”