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CU Member Loyalty Rises At Banks' Expense
MADISON, Wis. (8/1/13)--Members' loyalty to credit unions has risen sharply in recent years at banks' expense, according to the Credit Union National Association's 2013-2014 National Member and Nonmember Survey Results.
The August edition of Credit Union Magazine provides an in-depth look at the survey findings.
Nearly 60% of members now say a credit union is their primary financial institution (PFI), up considerably from 42% in 2009. Meanwhile, banks' numbers declined from 56% in 2009 to 38% this year.
"The financial crisis of 2008 and 2009 caused many consumers to question their loyalty to banks, which many consumers blamed for triggering the economic collapse," said Jon Haller, CUNA's director of corporate and market research.
Since that time, many consumers have embraced credit unions' not-for-profit, cooperative business model. The financial crisis spurred many members to shift their primary loyalties from banks to credit unions.
Loyalty has become the Holy Grail of marketing because highly loyal members use more credit union products and services than other members, and are the cooperatives' most passionate advocates.
Credit unions prevail in another key measure of loyalty: active referrals. Overall, 57% of members say they're "extremely likely" to recommend their credit union to others, while only 40% of members who also use banks say they're "extremely likely" to recommend their banks.
Also, an overwhelming majority of credit union members (84%) say they "definitely" or "probably" will contact their credit union the next time they need financial products or services.
At the same time, credit unions have a considerable opportunity to develop deeper business relationships with their members, as 85% also have accounts with banks while only 15% don't use banks.
Members are just as likely to use credit unions as they are banks for checking and online banking, the survey results indicate.
On the upside, 59% of members now use credit union checking accounts, up from 51% in 2009.
"This represents important wallet share growth opportunities for credit unions," Haller said, "because the checking account is an important product that determines PFI status. As your members' PFI, there's a strong likelihood they'll give you the first shot at meeting their product needs."
In addition to increasing checking account penetration, credit unions also made gains with online banking penetration. CUNA's research shows that 50% of members use their credit unions' online banking services, up from 32% in 2009.
However, 49% of members also use banks' online banking services.
Another article from CUNA's surveys, CUs Must Improve Awareness Among Nonmembers, will be in Monday's News Now.  For more information, attend the Grow Your Membership webinar on Sept. 18 or use the links.

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