By Ryan Zilker, Business Manager, Product Development, CO-OP Financial Services
There is no question that trust is important in everyday life and there is also no question that credit unions are more than competitive when it comes to trust among financial institutions.
Earlier this year CO-OP Financial Services hosted a webinar on the state of credit unions and mobile banking. The panelists made the consensus point that trust is a competitive asset that credit unions need to promote and exploit when it comes to mobile banking.
“The trust among our members is higher than other financial service providers,” said Jon Bartek, Director of Sales, eCommerce Products. “Credit unions have to leverage that advantage.”
The Security Challenge
Indeed they do. One of the big challenges that trust can overcome is that many consumers are still uncertain about the security of mobile banking transactions, especially with retailer data breaches and other instances of leaked personal information. A study on mobile banking usage by Thrive Analytics’ 2014 Digital Wallet Usage reports that while 80 percent of consumers surveyed are aware of digital wallets, 46 percent said they continue to have concerns about their security.
Nevertheless, use of mobile banking and digital wallets is rapidly growing.
Credit Unions Will Capture Their Share
Credit unions will most certainly capture a portion of this growth and could outpace banks with the trust advantage in their corner, especially when concern over security is one of the critical factors that needs to be addressed satisfactorily. It’s an issue discussed in detail in CO-OP’s downloadable Security eBook.
In an August 2014 report, the Chicago Booth Kellogg School Financial Trust Index showed that consumers clearly trust credit unions more than banks. The index pointed out that trust in credit unions among their customers is 60 percent while customers’ trust in big banks is 30 percent.
“Research is showing how effective credit unions are at creating trust with their members,” the Kellogg report says. “As long as this trust is sustained, there is no reason to think credit unions can’t grab more market share.”
Adding to this body of research, an October 2014 report by the Harris Poll found that consumer trust in credit unions held steady during the previous year while the trust in banks was in decline. Personal experience tops the list of influences, with 66 percent of Americans stating this factor has a great deal of influence on their level of trust.
The Role of Customer Satisfaction
It would seem a safe assumption that customer satisfaction and trust are closely related, so surveys regarding the former hold good news for credit unions as well.
According to the American Customer Satisfaction Index (ACSI) survey released in November 2014, credit unions are also ranked first in customer satisfaction, significantly outpacing all other financial institutions. The ACSI credit union customer satisfaction score at 85 is first among financial institutions and the average bank score is 76.
Also, according to the report, members of credit unions have higher expectations of service at their credit union than customers of banks do – and over the past two years, not only have member expectations increased, but credit union satisfaction scores have increased as well. Furthermore, member loyalty is greater at credit unions. The likelihood that a member will continue to do business with the credit union is far higher (nearly 20 percent) than all others measured in the survey.
As credit unions continue to be viewed favorably by their members when it comes to trust and customer satisfaction, credit unions can continue to improve their position in the brave new world of mobile banking by highlighting these key traditional assets of the movement.
And, credit unions can learn more about how to compete in terms of advanced products and services by visiting http://co-opfs.org/solutions/mobilevirtual.
About the Author
Ryan Zilker is Business Manager, Product Development, for CO-OP Financial Services, a financial technology provider to credit unions based in Rancho Cucamonga, Calif. He can be reached at firstname.lastname@example.org and (800) 782-9042, ext. 3482.