CREDIT UNION RELEVANCE

Relevance - A measure of how closely something matches a user's need. Another way to look at it is: “Would anyone miss the Credit Union if it ceased to exist?”

Are credit unions relevant? Individually, yes. Credit unions are relevant to the community they serve. Credit Unions are relevant to the members who look to them for the excellent financial products and services credit unions are known for. There is evidence which supports something I’ve believed for a long time, “Consumers, even those who do not directly use credit union services, are better off because credit unions exist.” Back in the day - my days in Carbondale IL – I always believed that even though SIU Credit Union was one of the smallest financial service providers in the market, we kept the bigger ones honest. They always had to compete with our rates and fees, as well as our level of service. CUNA has recently published several articles, based on 2006 data, which conclude that credit unions are worth approximately $200 per year in savings to each credit union household, including the impact credit unions have on bank rates and fees. I have done a calculation at Tampa Bay Federal, based on the CUNA data, that estimates this savings per household at $177, plus the impact credit unions have in our market on bank rates and fees. Are individual credit unions relevant? Again, you bet. We just don’t tell anyone, outside the family, who we are and what we do.

This is a topic for another discussion, but I’ll put it on the table. The Tampa Bay Federal Experience is designed to create a Needs Based Sales & Service Culture, that leads to active members providing endorsements to their family and friends of what we hope will become a Legendary Experience. I’m working on the Sixth Edition at this time.

Now, let’s get back to the Relevance discussion.

Collectively, the argument is more difficult. When a subset of an industry is only 6% of the market, it is hard to claim relevance. If we expand the industry to include non-insured “deposits,” such as mutual funds, etc., credit unions only make up 3% of the market. When there are artificial barriers to entry, such as field of membership, it remains hard to claim relevance. When organizations like ZOPA are gaining traction in the United States, it will become harder to claim relevance.

How can credit unions stay relevant in today’s market place? One member at a time.

Reactions?