Credit Unions' Edge in Building Member Relationships

Credit unions can maintain their historic advantage in customer engagement by focusing on financial well-being, fostering collaboration across departments, and upskilling their employees.

FREMONT, CA: Credit unions have historically held a unique advantage in customer engagement compared to banks and fintechs. Unburdened by the pressure of satisfying Wall Street, these financial institutions prioritize serving their members above all else. This dedication to their members has allowed credit unions to build strong relationships, increasing loyalty and higher customer satisfaction. 

Higher customer engagement yields tangible benefits for credit unions. Engaged members tend to purchase more financial products, remain loyal to the credit union for extended periods, and consider it their primary financial institution. While banks and fintechs are beginning to adopt credit unions' customer-centric approach, credit unions can maintain their edge by focusing on financial well-being. Credit unions can create meaningful customer relationships by investing in customer engagement strategies such as personalized communication, loyalty programs, and personalized financial advice. This builds trust, leading to higher customer satisfaction and loyalty. Credit unions can tailor products and services based on customer data to better understand customer needs and expectations.

Defining a clear financial well-being strategy is paramount for credit unions. Metrics centered around members' relationships with money should be established and tracked to demonstrate progress over time. Moreover, credit unions can showcase success stories related to members' financial well-being, fostering a culture prioritizing well-being over financial transactions.

Developing defined financial well-being plans can assist credit unions in better understanding their members' requirements and developing specialized products and services to satisfy those needs. Tracking the success of these strategies can help credit unions identify improvement areas and create targeted campaigns to help members reach their goals. This creates a culture of trust, understanding, and collaboration between credit unions and their members.

One significant challenge for credit unions impacting member and employee engagement is greater department cooperation. Achieving holistic member service, crucial for improving financial well-being, requires high collaboration across the organization, including multiple channels and team members. Credit union employees can play a pivotal role in educating members about digital banking tools, as human interactions are particularly effective in driving digital adoption.

To genuinely support financial well-being, credit unions must be equipped to meet most of their customers' needs. Employees should receive training to become true advisors, capable of asking the right questions and addressing members' specific requirements, not just offering available products. While the gap in customer engagement between credit unions and banks is narrowing, credit unions retain a strategic advantage based on trust. Members believe credit unions care about their well-being rather than solely pursuing profits.

To remain competitive, credit unions must intentionally emphasize this differentiation. They should recognize that financial well-being is an emotional, not transactional, concept and develop strategies accordingly. Upskilling employees in technology is essential to help members become digitally proficient. Credit unions should leverage their advisory capabilities by coaching employees to engage in meaningful conversations that provide value and emotional satisfaction to members. Credit unions may continue to survive in the changing financial industry by concentrating on these factors.