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Cheney CU momentum giving banks food for thought

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WASHINGTON (12/12/11)--Coverage of banks' business practices, consumers' mounting distrust of banks, and the movement to credit unions may be giving bankers food for thought. Banks are beginning to focus on what they need to do to repair their reputations and shore up customer loyalty, according to an American Banker article Friday. However, some of their focus may be misplaced.

The article noted that 300 bank executives and others at two conferences were struggling with ways to mend their reputations and relationships with increasingly disgruntled customers. On the agenda were sessions such as how to communicate with customers and increase loyalty to their branches and market effectively.

One panel member indicated that banks' negative reputation is a barrier to growth and may be a path to losing customers.  And a BMO Harris Bank executive noted that bankers in general are troubled by the lack of profitability in the consumer banking sector and that banks must work to prove that they "deserve to make an appropriate return" for the services they provide their customers.

Some suggested that customers would be lured back, or tempted to stay put at their bank, if banks offered technological advances such as new iPad applications or other technical additions.

Credit Union National Association (CUNA) President/CEO Bill Cheney said the coverage of consumers moving over to credit unions "clearly has given banks food for thought."

Cheney said that banks' choice to emphasize new tricks and technology over simple customer service improvements can serve as another reminder of why credit unions are the best choice for consumer financial services--"but that choice is only earned by absolute focus on consumer needs, which is what credit unions do," Cheney added.