Credit Unions are Embracing Change to win over Younger Generations.
Updated: Jun 1, 2021
“ Big Banks watch out: I visited a new customer-centric local credit union and I was very impressed”
Newer, smaller customer-centric Credit Union Branches work.
Credit Unions can and do have a great omnichannel approach.
Local Credit Unions are adapting to meet the needs of younger generations.
By: Allan R Kirby
About a year ago I decided to open an account with a local credit union near me that had just opened up near my house. This was not one of those big credit unions, it was a smaller localized one.
I have to admit I was very surprised when I arrived at the branch, it was not what I was expecting. When I entered I found the layout and the way staff worked to be fundamentally different from what I am used to with traditional banks. First, it was a much smaller branch, about a third the size of a regular branch, with a teller desk that was big enough for just two tellers. Secondly off to the one side of this tiny teller desk, I could see a number of individual offices that are used by staff and customers to sit down and discuss products and services in a more private setting.
Even though the branch was smaller than what I am used to, I did find it had a very comfortable feel to it. My first impression was one of initial confusion because it was so different. I however quickly realized this credit union was using its members' money wisely by building a more modern and personable type of branch. The approach is a good way to win over younger customers such as millennials and Gen Z. These generations and people like myself do not like the big oversized sized banks that seem to have so much space but feels empty, which is usually the case (No tellers). This Branch showed a fresh and modern approach to the banking experience and did not have an institutional feel to it. It really did feel and appeared to be a branch focused on the customer.
I was pleasantly surprised and I did have a good experience, so overall I found no issues with the new layout. In fact, I have since expanded my services with them such as; opening accounts for my kids and discussed credit union loans (Their rates were much better than the big bank) and credit cards. All of this is a direct result of the positive impression I got on that first day. First impressions are still critical when someone decides to enter a branch to do banking and I would say it was the best experience I had in years. I believe that differentiating distinctly from major banks has shown me that my credit union has a unique brand that proves it can work in the ever-changing banking environment.
“Clearly having a more customer-centric branch layout in my mind helped show credit unions can provide a more social and less institutional feel with their branches.”
Great Omnichannel approach
In addition to my positive credit union "in branch" experience I further found that my new credit union has developed a very good Omnichannel approach. This is because they seamlessly utilized social media, their website, and brick-and-mortar locations to provide a great customer experience. One good example was just getting in touch with the branch. It was incredibly simple and it took me just a minute or two to set up meetings with a branch associate. Ironically while I was dealing with my new credit union, I had a horrible time dealing with someone at a major bank. Interestingly the major bank sites on the opposite corner of the credit union. At the time I wanted to speak to a representative on the phone from the branch, as I had very specific issues. Unfortunately, it was not easy, instead of getting someone at the branch, I wasted 10 minutes dealing with a national service desk. I just wanted to do a simple meeting set up with someone at the branch to deal with my issues. I ended up having to actually drive to the branch, wait in line and then try and set up a meeting with a representative. This ended up costing me 30+ minutes of my time, not seamless, and not an omnichannel approach.
“My major bank failed because it was still acting in siloes, there was no coordinated effort to help me accomplishing my banking needs without a lot of effort on my part, the customer.”
When looking at the future of the bank branch, my credit union hit a home run, they were able to find a model that tailors to the needs of their customers. In addition, their social media and website provide me with an integrated communication channel that allows me to have a variety of ways to work with them in order to meet my banking needs. I do get the fact that many credit unions are behind technologically and may not have the apps and deep online services offerings major banks do; however I have found credit unions are not overly top-heavy organizations. In fact, it's their size makes them perfect to seamlessly meet most customers’ needs online, on social media as well as traditional brick-and-mortar locations.
“It’s their size and flexibility that sets credit unions apart from many larger financial institutions, they can adapt and provide a superior customer experience”.”
Contrary to what I have read on the possible demise of community banks and credit unions, I have seen that credit unions are more than ready to be adaptive to change. This cannot be said for larger institutions, it appears they have more work to do. Although this is only one person’s opinion, I have in fact talked to others and what I am finding is that credit unions can shape their organizations to embrace the banking needs of millennials and Gen Z. This is important because their success will depend on their ability to adapt and provide a more service-centered experience to keep and gain new customers and I would say they are doing just that.
As a final note when I discuss credit unions my focus is not on the big credit unions nor the top major banks like the ones shown below. I look for smaller localized credit unions that serve the community and surrounding areas.
Top Credit Unions based on Branches:
Navy Federal Credit Union
State Employees Credit Union
Top Major Banks:
JP Morgan Chase
Bank of America
This is a MySmallBank.com blog written by Allan Kirby, who writes and produces Personal Finance and Money Management articles and videos along with My Success Magazine.