MADISON, Wis. (7/23/14)--Because they hold credit unions in such high regard, credit union members are more likely than bank customers to keep a greater portion of their holdings with their financial institution--an encouraging development as credit unions continue to seek ways to expand member outreach, according to a new Filene Research Institute white paper.
"The Consumer Experience: Financial Institution Preference and Usage Factors," which analyzed McKinsey and Co. survey data from 2013, found that 85% feel their assets are completely safe at their credit union, while only 68% of bank customers feel the same about their institution.
"Credit unions can't prevent every member from shifting their funds or closing their account, but the current outlook for growth is extremely promising," the report noted. "Research is showing how effective credit unions are at creating trust with their members.
"As long as this trust is sustained, there is no reason to think credit unions can't grab more market share," the report continued. "We have learned that consumers choose financial institutions based on income, age and attitudes toward service offerings. These preferences are always subject to change. The onus will be on credit union leaders to ensure they don't."
"Lessons learned" in the report included:
- Credit union members keep a greater portion of their holdings with their primary financial institution than bank customers;
- Wealthy consumers with more than $150,000 in annual income tend to keep a smaller proportion of their personal assets at their primary financial institution;
- Consumers with less than $20,000 in household income keep 80% to 100% of their total assets with their primary financial institution;
- Consumers who use a credit union as their primary financial institution are much more likely than bank customers to agree strongly with positive statements about their primary financial institution;
- Forty-eight percent of credit union members feel their credit union rewards them for remaining loyal to their brand, compared with 34% of bank customers;
- Between 75% and 90% of consumers use websites to check balances;
- Those who use a credit union as their primary financial institution consistently report the highest level of satisfaction with various attributes of their primary financial institution;
- Only 14% of respondents with incomes of less than $20,000 switched financial institutions for better products, rates, fees or returns; and
- Forty percent of respondents with more than $150,000 in annual income switched to find better products, rates, fees or returns.
To download the white paper, use the link.