C. Myblog

Are New Members Different?

September 1, 2011

These are challenging times for financial institutions but it’s tough for individuals too.  Setting aside employment woes, managing personal finances has become especially difficult with the stock market in flux and dismal returns on deposits.  As financial institutions shift strategies to adapt to the environment, customers are reacting by looking for a better deal.  A March survey by Bankrate.com found that 64% of respondents would consider switching to a different checking account provider if their financial institution raised checking account fees.  So now that checking account fees are becoming a reality, who is shopping your credit union these days and why?

Right below the survey results on the Bankrate.com page, there is a prominent link to an article called “Credit Unions are Free Checking Champions.”  It’s interesting that most credit unions aren’t actively trying to compete on price alone, but that’s where they’re left standing, in many cases.  This credit union perception pulls in rate shoppers who might look like contributing members.  After all they are opening a checking account, which has traditionally been considered the cornerstone of a deep member relationship.  But are these new members purchasing secondary products such as loans, which make the potential loss-leader checking account profitable for the credit union?

It is important to study how member behavior is changing by reevaluating the data and quantifying exactly how much checking accounts cost and how many other products newer members are purchasing because it may be different than members who have joined in the past.

It isn’t easy to adapt to the rapidly changing landscape, but keeping these three questions in mind should help:

  1. Do you understand your members’ changing needs and behaviors?
  2. Do your products and services satisfy those needs?
  3. Are you able to provide those products and services in a profitable and sustainable way?


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