By Frank J. Diekmann
As the year-end approaches, it’s not just the most joyous time of the year because we get to put 2020 behind us, it’s also the time for a year-end trash-bin emptying of the Reporter’s Notebook, including:
The First Rule of CU Club
One credit union recently sent a press release announcing its program to assist members in need was based on a “fist come, first-serve basis.”
On the Mark For Being Off the Mark
Remember Mr. Twain’s famous observation “There are lies, damned lies and statistics.” The observation has aged well, as overall data numbers can be almost dangerously misleading. There was no better example than third quarter data released by NCUA, and reported by CUToday.info here, that seemed to suggest all is good in Credit Union Land. Indeed, one state association headlined their report on the agency data, “NCUA Releases Q3 Call Report Data, Credit Unions Continue to Grow Membership.
The headline is correct—and incorrect. It’s true, overall, CUs in the U.S. posted growth in membership in loans. But that was only true of credit unions north of $1 billion in assets, which skewed the data. Every credit union asset category below $1 billion both lost membership and loans in the year ending Sept. 30.
And that means CUs need to start dealing with truths, damned truths and the statistics.
Won’t be a Surprise to CUs, Especially When…
Retail financial institutions face a major consumer satisfaction challenge as consumers increasingly switch to digital-only engagement, according to a new report from J.D. Power.
“Banks have been confronting a difficult paradox for the last several years,” stated J.D. Power. “The most satisfied retail banking customers use both branch and digital services to conduct their personal banking, while the least satisfied are those who have a digital-only relationship with their bank and do not use branches.”
None of this should come as a surprise to credit unions. As I wrote here, for the second year in a row the friendly faces of cooperative finance in the U.S. aren’t perceived as being so friendly any more, finishing second to banks for the second year in a row in the American Customer Satisfaction Index. How much of this is due to members being driven to e-channels during the pandemic, and then finding the much derided "friction?"
According to the newly released J.D. Power 2020 U.S. Retail Banking Satisfaction Study, 52% of retail bank customers classified as branch dependent before the COVID-19 pandemic, and successfully transitioning them to digital—without compromising customer experience—will be critical in the weeks and months ahead.
The Key Findings
According to J.D. Power, key findings of its 2020 study include:
- Pre-pandemic, branches still played major role.
- Digital-only customers have lowest levels of satisfaction.
- Big banks lead midsize and regional banks on digital engagement.
- P2P payment integration emerges as wild card for bank customer satisfaction.
You can find the full CUToday.info report on the J.D. Power findings here.
Say Hello to EBITDAC
The Financial Times recently reported a German company, Schenck Process, has a new accounting measure: “Ebitdac,” or Ebitda adjusted for effects from Covid-19 crisis.
Forget Travel (What Travel?) Rewards
Heading into 2020 credit unions focused on making their card rewards more attractive in an extremely competitive market sought to offer travel rewards and related points offers.
In the background, many others called for more robust efforts to get CU cards “top of wallet” for the default online, mobile and contactless payments an increasing number of consumers were making.
Now, the coronavirus pandemic has put a halt to most travel, while monthly default payments for certain services, such as Amazon, have become the only purchases aside from groceries many Americans are making, Forbes reported.
As a result, Forbes profiled a new list recommending the best credit cards for monthly streaming services, with the Blue Cash Preferred Card from American Express taking top honors.
No Doubt Authored by a Doctoral Candidate
Actual sentence from CU press release: “The students plan to use their scholarships to pursue or continue their degrees in higher education.”
Management Shot it Down, But…
Following a recent news item in this column on one CU’s expansion of its FOM, one reader, now retired, shared a story from his early days in marketing at a CU in Kentucky when he proposed a campaign themed, “Send Us Your No-Account Relatives.” The marketer was sent back to the drawing board with no word on whether the tagline struck to close to home for senior management.
Ah, the Irony
Have received countless press releases from credit unions announcing “virtual groundbreakings” for new facilities. Not sure how many have recognized the irony that the same technology allowing people to virtually participate in the groundbreaking is also the same technology that could render those very same facilities if not obsolete, far more expensive to operate in the future due to lower traffic.
A Different Kind of Time Stamp
We are seldom aware when we are standing in a photo that defines a time. And yet all of us are. This was brought to my mind this week after receiving more photos of credit union staff helping in their communities. While the various good deeds were varied, they had one thing in common. You may have guessed—they were all wearing facemasks.
It’s worth noting that years in the future 2020 will be physically time-stamped by all the photos of people wearing facemasks. It's the same way bread line photos came to define the 1930s and gas line photos the 1970s.
Frank J. Diekmann is Cooperator in Chief of CUToday.info and can be reached at Frank@CUToday.info. Mr. Diekmann is also author of the new book, ‘501 Name Tags: Everything You Need to Know About Business Can be Learned at a Conference & Forgotten in the Trade Show.” For info: www.501nametags.com.