It’s not just great rates and low fees that are attracting members to credit unions. After a difficult year, Americans are reevaluating how wellthe institutions they use and support can serve them during toughtimes. This is especially true forfinancial institutions; a recentMcKinsey study found that financial strife has played a key role inAmericans’ rising anxiety over thepast year.
People are increasingly considering “soft factors” in theirdecision to use a financial institution. If they have an economichardship or exceptional circumstance like a job loss or medicalissue, will their bank or creditunion work with them to makeaccommodations? Or does theinstitution only care about thebottom line?
Before COVID- 19, America was
enjoying a strong economy and
record-high employment. It’s easy
for financial institutions to pro-
vide superior service in affluent
times. But it’s a lot harder in lean
times. Here are four areas where
credit unions can
stand out in 2021:
1. Focus onconsumer lending.
Soon after the pandemic hit the U.S.,some big banks tightened their standardsfor mortgages andhome equity loans,making it difficult formany of their customers to take advantage of low interestrates. In short, thosebanks put profits before people. In contrast, manycredit unions worked closely withtheir members to ensure ongoing access to credit. Credit unionsshould publicize their consumerlending practices during recessions to show how credit unionsput their members’ needs first.
2. Provide anywhere digitalaccess.
A recent KPMG report noted, “Pre-
COVID, digital transformation was
a desire … it is now a demand.”
Digital access to fi-
nancial services be-
came vital overnight.
While there is a place
tar branches, all fi-
are now expected to
serve consumers re-
motely, on the web
and through mo-
bile devices. Credit
unions are increas-
ingly digitizing their
services, making it
easy to transfer mon-
ey, deposit checks,
pay credit card bills, apply forloans, access member servicesand more, electronically.
3. Support your community.
When a financial institution puts
profits above people, it’s a red
flag. Credit unions are known
for doing good for the people in
their communities, by donating
to charitable community organi-
zations, encouraging employee
volunteerism, establishing finan-
cial literacy programs, training
service dogs and more. If a credit
union takes its corporate social
responsibility seriously – through
actions, not just words – it’s a good
indication that the credit union
will take care of its members.
4. Take care of youremployees.
Edelman’s COVID- 19 trust update
found that “only 43% believe that
companies are protecting their
employees sufficiently from CO-
VID- 19.” This number should be
much higher. How well a com-
pany treats its employees often
directly translates to how well em-
ployees treat consumers. Credit
unions have a reputation for valu-
ing their employees’ well-being,
not just their productivity. Let
members and potential members
know what you are doing for your
employees, and it will give them
greater confidence in your mis-
sion and integrity.
Richard Edelman, CEO of Edelman, which issued “The 2020Edelman Trust Barometer SpringUpdate: Trust and the Covid- 19Pandemic,” stated, “In this extraordinarily difficult moment,institutions have a duty to outperform expectations and rebuildpublic confidence.” The Edelmansurvey found that only half of respondents believe businessesare putting people before profits,and only slightly more than halfbelieve businesses are helpingsmaller customers stay afloat.
Credit unions have always putpeople before profits, and as aresult they will continue to gainmarket share in 2021. I believe thisyear, credit unions will welcome arecord number of new membersby showing them the credit uniondifference of how we help ourmembers through good times aswell as difficult times. n
CU Difference Shines Even Brighter in Difficult Times
James R. SchenckPresident/CEO,PenFed Credit UnionCEO, PenFedFoundationMcLean, Va.
10 FOCUSREPORT/Leadership in 2021
‘If a credit union takesits corporate socialresponsibility seriously– through actions, notjust words – it’s a goodindication that the creditunion will take care of itsmembers.’