Conversations With Credit Union CEOs

Subscribe Now!

Stay on top of all the latest news and trends in banking industry.

Untitled(Required)

Having spent the better part of last week in Arizona, staring at cactuses in the desert, I have this inexplicable urge to flip somebody the middle finger.  I also have a more explicable desire to share some of the things I’ve learned and gleaned from spending the better part of a week with a bunch of credit union CEOs and their board chairs at the CUES CEO Symposium.

It was my job to lead the CEOs/Board Chairs through a 3-hour session on What’s Next For Credit Unions? (Piece of cake, right? Yeah, right). The session was repeated three times, as the total set of attendees was split into three groups representing small, medium, and large credit unions.

One of the key ideas I tried to get across to the CEOs/BCs was that their biggest challenge looking ahead wasn’t competition from big banks, nor any set of regulations that may come about. For the most part, I think they agreed with me on this.

What I did assert was their biggest challenge was consumers’ lack of interest in managing their financial lives (the apathy I wrote about in a previous post). This point didn’t garner universal acceptance. Let me try to summarize the way the discussion (typically) went:

Me: People don’t care enough about their managing their financial lives to make more informed choices. Consumer apathy is credit union’s biggest challenge to overcome.

Them: No way. People don’t care that much about managing their financial lives and never will. We simply have to be the most convenient, most easy-to-do-business-with financial institution.

Me: So how do you get that message — that you’re more convenient and easier to do business with — out to more people?

Them: We have to educate people on the credit union difference.

Me: Why hasn’t that education effort been more successful in the past?

Them: Because people don’t care enough about managing their financial lives to make more informed choices.

Me: [SILENCE]

Gotta give them credit, though. They did something you probably couldn’t get me to do: Shut up.

So then I’d ask them to raise their hand if their credit union was looking to lower the average age of its member base by attracting Gen Yers. Most (if not all) raised their hands.

Me: Gen Yers are so overrated. It takes about 15 of them to bring you the money I (as a Baby Boomer) could bring you, and if you get me, guess what? You get my Gen Yer’s business, because she puts her money where I tell her to.

Them: But the younger generation isn’t locked into relationships already, and if we can get them now, we can hopefully make them members for life.

Me: Were the members you attracted 10, 20, 30 years members for life?

Them: Some, not all. Not enough.

Me: Then why will this generation be members for life when previous ones weren’t?

Them: [SILENCE]

Me: By the way, know why my Gen Yer puts her money where I tell her to?

Them: Why?

Me: Because — like many others in her generation — she doesn’t care enough about choosing between financial providers, so she’s more than happy to let me (or, to be more specific, her mother) tell her who to choose.

[Some of] Them: Yeah, actually I have a couple of kids in there 20s, and they wouldn’t be with a credit union if it weren’t for me.

Me: Yep. According to research I’ve done, more than four in ten Gen Yers won’t consider a credit union for future financial services needs because they either don’t know what a CU is, or they say they don’t belong to one now, and don’t anticipate doing so. So how are you going to fix that?

Them: Gen Yers want to do business with firms that want to do business with Gen Yers, and give them good service. The big banks have the attitude you described (i.e., “it takes 15 Gen Yers to bring the assets of 1 Baby Boomer”).  We’re going to target them and show we’re different.

Me: That’ll work — with some Gen Yers. The 25% who care enough about their financial lives to make an informed choice. Which really isn’t a whole lot different situation, when you think about, than when you went after the 25% of Gen Xers who cared about managing their financial lives, or the 25% of the Boomers who cared, or the 25% of Seniors who cared. What’s going to be different this time around?

Them: [SILENCE]

Me: [SILENCE] [END OF CONVERSATION]

If I’m not mistaken, somebody once defined insanity as doing the same over and over again, but expecting different results.

I would estimate that about one-third of the CEOs at the conference believe that their future success is tied to their ability to develop and sell competitive or superior financial products. The other two-thirds have the mindset that it’s all about educating more people about the “credit union difference.”

Credit unions’ marketing to Gen Yers is certainly different than the marketing efforts of the past targeted at Gen Xers, Boomers, and Seniors.

But the marketing always changes.

What fundamentally isn’t changing is the product and the business model. Oh sure, a few more bells and whistles are added to the checking account, and new channels to access those accounts are created. But everybody catches up pretty quick to any advance in products and channels, so the end result is: Checkmate.

There was a lot more to the conversation. But I’m not sure you want to hear how uninterested many of the CEOs were in discussing marketing, in general, or building new marketing capabilities, more specifically.

This article was originally published on . All content © 2022 by The Financial Brand and may not be reproduced by any means without permission.