By Ray Birch
NORTH POLE—As credit union executives rush to their Christmas trees Saturday morning to see what Santa brought them, many say their wishes will be fulfilled if there will be gifts to help stop the industry’s slide in consumer satisfaction.
In the first of a two-part CUToday.info series, several CU experts have sent letters to the North Pole asking Santa to lend a hand. The requests range from expanded budgets to invest in digital initiatives and for better training programs for staff. There is also, not surprisingly, even an ask of NCUA—don’t be a Grinch next year and please come down to CUville to celebrate the season with the townspeople.
The opinions were shared as part of another holiday tradition in which CUToday.info asks voices from throughout the CU community for what they are asking Santa for this year and for the years to come.
Dennis Dollar
According to former NCUA Chairman Dennis Dollar, credit union execs should hope to stockings full of cash on Christmas day to pay for much-needed larger technology budgets in 2022.
"Credit union consumer satisfaction has fallen below banks the past three years, not necessarily from anything credit unions have or have not done,” said Dollar, principal at Dollar Associates, referring to the latest American Consumer Satisfaction Index (ACSI) data.
As CUToday.info was first to report, for the third year in a row the nation’s credit unions have not only again fallen behind banks but also hit another “historic low” when it comes to consumer “satisfaction” with their financial institutions in the 2021 American Consumer Satisfaction Index (ACSI).
The findings were a shock to many in credit unions in 2019 when CUs first fell behind banks on what had long been considered a unassailable strength. The CU movement was disabused of any idea the finding was a one-off in 2020, when credit unions again finished behind the banking industry on satisfaction.
Old Days, Old Measure
Now, the latest survey reveals bank customers are again more satisfied than CU members for a third year in a row.
“It is primarily because banks have embraced digital delivery of services with their highest priority and have put their money there,” Dollar said. “The Bank of America technology budget for 2021 was more in dollars than the assets of any credit union in the country, other than the good folks at Navy Federal.”
The old days of face-to-face interaction winning the day are over, he pointed out.
“Consumer satisfaction was also based on if the member had to wait on a loan officer and whether they got the loan when he or she sat down in front of the officer,” added Dollar. “Those standards were already shifting away from high-touch to high tech before COVID came along and accelerated digital service usage by at least five years—if not a decade. After all, when members couldn't come into the branch to get personal attention because of lockdowns, personal service really didn't matter as much.”
What Matters Now
What matters now is whether the CU’s mobile app is easy to use or the home banking website works properly on the consumer's laptop.
But that isn’t the only wish on the list, according to Dollar, who would also like to unwrap a promise from NCUA that it will lose its “Grinch-like” resistance to recognizing digital delivery channels as service facilities for credit union growth and expansion.
“Indeed, NCUA made progress with its recent service facility rule that recognized shared branches and ITMs as service facilities for underserved areas and included ATMs for SEG expansions,” said Dollar. “They deserve commendation for this positive, albeit belated, action. However, shared branches came of age in the 1990s and ATMs in the 1970s. It was actually just a recognition, several decades later, of marketplace realities that have been in place for years and have now been replaced by the fact that financial consumers are carrying their service facilities around with them in their pockets or under their arms.”
Dollar said he believes the agency of which he used to be chairman could help credit unions make better use of their larger technology budgets, already among the biggest line items under their trees, by recognizing CU investment in digital product and service delivery is only going to meet member and consumer needs to the degree the regulatory environment allows.
“Credit union membership expansion through recognition of digital service facilities would be akin to when the Grinch came down the mountain to celebrate the season with the Whos,” said Dollar. “One Christmas, this will come—as did shared branch, ITM and ATM recognition. The only question is whether credit unions will have fallen further behind waiting on NCUA to read this essential item on their Christmas list and to put it in the NCUA bag for delivery.”
Helpful in Many Regards
Another former CU regulator shares a similar view.
“NCUA’s new CUSO rule is helpful in many regards,” said Mark Treichel, a former NCUA executive director and founder of Mark Treichel LLC. “Support your trade association’s efforts to ensure NCUA does all it can to balance providing regulations that best allow for credit unions to thrive with compliance with the Federal Credit Union Act. Today, your members’ phones are essentially your branch office and you must meet your members’ expectations there. The law and the rules allow your phone to serve as a branch office for membership purposes. This would be an amazing Christmas gift, but may ultimately require changes to the Federal Credit Union Act. The NCUA board has always cared about this topic—so, make your voice heard, either via your trade groups or directly.”
Treichel also believes one of the best gifts many CUs could receive this year would be a new perspective from their boards.
“Credit unions should focus in every way on capturing younger members,” said Treichel. “This starts with the board and other committees. Aging boards should wish for and take actions to retain an influx of younger and diverse officials. These new officials understand their peers and their own needs. If you can fulfill the needs of younger officials, you are more likely to fulfill the needs of your young members.”
One Personal Experience
Treichel said it’s clear what credit unions need to do to compete.
“I just bought a new car and 10 minutes before I left for the dealership I applied for credit online at our credit union and signed all the documents digitally in preparation for the purchase,” he said. “Once I was at the dealership, I finalized the approval and immediately sent the funding paperwork to the car dealer. I also updated and provided proof of insurance in real time. To satisfy your members, this type of quality service is needed. Credit unions must invest to be at the cutting edge of streamlined e-services in order to meet the expectations of young and future members.”
A Gift to Themselves
Finally, Treichel said CUs should give themselves a gift—greater collaboration.
“Invest in CUSOs or other shared technology for digital services,” he advised. “To reverse the credit union member satisfaction slide will take time, money and dollars. Now is not the time to sit on the sidelines and hope the trend reverses.”
And the gifts don’t always have to be high tech. Sometimes, observed one person with CUES, the best way to provide a great member experience is to spend money on the CU’s staff.
“When employees are fully engaged in their career and dedicated to their organization, their positivity naturally leads to stronger member relationships,” said Jimese Harkley, VP of membership at CUES. “One simple way to keep your current employees happy is by offering a strong, systemic talent development program.”
To that end, Harkley said CUES’ have been helping credit unions manage their way through the current, “tight” job market, helping them attract and retain talent.
Can’t Be Thrown Away
Jim Giacobbe, president and CEO of United Solutions in Tallahassee, Fla., is offering a reminder that what made credit unions better than banks in the service arena for so many years cannot be thrown away like used wrapping paper.
“Credit union consumer satisfaction is slipping in comparison to the banking industry, which seems to have adopted our game plan,” said Giacobbe. “However, it’s all in the execution. We have a credit union client that only closed its branches for three weeks throughout all of COVID, and they are winning in their market.”
Giacobbe noted that credit union made minor adjustments and was compassionate and empathetic toward employees, but it never wavered from its mission of providing the best service possible to its members.
“They added new member-facing products to help those who no longer wanted to come into their branches, but they didn’t recoil and become withdrawn as an organization,” he said. “As a gift to their members this Christmas, I encourage credit unions to add better home banking and mobile, implement more member-facing self-service products, and investigate new kiosks and ITMs. But, don’t stop providing the same great personal service that made your credit union great in the first place.”