ORLANDO, Fla. — If credit unions are going to survive thecurrent economic crisis, they must revisit sacred cows, promotetrue differentiators and adjust capital use.
Credit unions are nimble, which is a big plus over theircompetitors, according to Sandler O'Neill Associate Director PeterDuffy. Right now, credit unions operate in a world where sevenletters are competing for one piece of A-paper.
Credit unions must guard their culture and relationships with theirmembers, Duffy said. At the same time, they must let go of thesacred cows that keep CUs holding onto branches that are notperforming.
Additionally, credit unions need to change the way they viewcapital. Capital is not just a cushion for the bad times but also atool for growing membership.
Credit unions should also emphasize their noncommodity attributes,such as marketing and promotion, location and people.
Three Rivers FCU Vice President of Member Services Jim Johnsonagreed. Staff at all levels meet regularly to discuss how theychanged a member's life. For example, one member servicerepresentative simply asked a member that came in for a simpletransaction what his dreams were; turned out he wanted to retire toa mountain in Montana but figured it was decades off. Three Riversworked out a plan that would get him to Montana within fiveyears.
Additionally, the credit union sees great potential in the businessservices arena. Staffers go out on small business calls, notselling a service but offering employee education on variousfinancial matters. “That's been a very effective tool-gettingpersonally involved in small business,” he commented.
Deepening these relations and all member relationships, Johnsonsaid, increases wallet share, provides new funds on deposit as wellas new places to lend, presents investment opportunities and givesthe opportunity for the referral of new members.