Trustworthiness has been a source of significant differentiation for credit unions since day one. Consumer surveys continually put credit unions above banks in the not-for-profit, integrity scale. With TARP and bank bailouts, this has been a relatively easy race to win of late; so easy that many of us may take it for granted. "We'll always be the safe haven." "We've got the financial industry positioning of trust so locked up, we can check it off our list, and move on."
Said the Tortoise to the Hare, however: "Beware."
Threats to CU trustworthiness abound. And they're sneaky. Pernicious. So slow to boil we may not even notice the pot warming up. Yet the flames beneath this pot have been fueled for years.
In the past, the frequent comparison to banks ("Like a bank, but better") subtly reinforced that credit unions are a lot like banks. The incredibly shrinking spread of recent years forced the exploration of non-interest income. Each little new or raised fee runs the risk of adding yet one more question mark to the "In CUs we trust" statement. Increased overdraft fees. Low balance fees. Application fees. Service charges. Fees to use the coin machine!
Member perceptions evolve. The erosion of brand positioning can be subtle. What questions may be circling your members' heads? How recently have you asked?
The list above takes us just up to the recent past. What about now? More chipping and chopping away at the CU position of trust. The economy has taken an ax to members' credit scores, and many credit unions are now lending only to top grade paper. (Another chop to the trust-meter.) Some members who qualified before no longer do. (Chop.) Credit limits are being lowered. Rates are being increased on some loans and lines. (Chop. Chop.) And despite dedicated efforts to clearly communicate these changes and their rationale, members often learn about them after the fact. (Chop. Chop. Chop.)
Look to the future and what may loom? The death of "free checking". If so, how well will this play in the "trust landscape?"
Recent Member Research studies show consumers raising the issue of trust and credit union motivation. In these times of commoditization, credit unions are encouraged to remember, and protect, the "trust-factor." It remains one of the industry's few true points of market differentiation.
Mike Anstead is SVP with Member Research, a national CU market research firm. He can be reached at (949) 833-6901 or by email at firstname.lastname@example.org.