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The battle is on, as credit unions contend with competitors of all sizes and types to be consumers’ primary financial institution (PFI). The competition includes other traditional credit unions and banks, digital banks, FinTech, and FinServ companies.
One key to winning that battle and owning the PFI relationship is having a consumer checking account relationship. This puts the credit union in the preferred position of offering additional products and services to meet member needs, thus gathering more deposits and supplying more loans.
StrategyCorps, Catalyst Corporate’s BaZing mobile rewards checking partner, asked consumers which institution they consider their PFI.
Megabanks are winning the battle as PFI across all demographics. However, credit unions are still outpacing their peer competition – community banks – in every demographic, except Baby Boomers, though they are significantly behind the megabanks and regional banks.
What does this mean for credit unions as they design, build, and offer checking account products? The reality is that megabanks and regionals clearly have the upper hand on the ground they've already claimed in regard to primary checking relationships.
The amount of resources they invest in digital platforms to maintain and increase their market share simply can't be replicated by 99.9 percent of credit unions. But let's not confuse the upper hand with the winning hand. Credit unions can fight back, because there is a chink in the armor of these banking giants that is exploitable.
While the megabanks' digital customer experience is superior, a review of the actual product benefits their consumer checking accounts provide (in terms of value) isn't that impressive. Their accounts are as ordinary as the checking accounts at most other financial institutions.
Their checking lineups are complicated and confusing, with significant product overlap, and terms, conditions and pricing that are not straightforward – and they typically come with high fees. They mask their product and lineup weaknesses with the prowess of investment dollars in the marketing and digital delivery of these less-than-modern product benefits.
This is the opening for credit unions! To gain more primary banking relationships, start by making your checking products better and different from the competition.
In a recent article, Reinventing Checking Accounts, research by Cornerstone Advisors shows how consumers responded positively to checking accounts that are different, providing non-traditional, valuable benefits like cell phone insurance, roadside assistance and pharmacy/vision discounts, along with a standard set of traditional benefits. These non-traditional benefits are at the center of members' non-banking lives and can be captured in the most used banking product – their checking account.
According to Mike Branton, partner at StrategyCorps, “Once you've enhanced and differentiated your individual checking products, continue to take advantage by making your lineup simple, with upgraded products.” StrategyCorps and Catalyst Corporate have found great success for credit unions by providing a good/better/best lineup methodology — a tried and true retailing best practice.
Create awesome checking products with just a few choices and an uncommon, relevant user experience. Your credit union and members will quickly enjoy the rewards of your appealing and high-performing retail checking products.