Build membership in a down economy

Credit unions have historically gained members by offering low rates, broad products, and individualized service. But how does that change during a down market?

A recent CUNA CEO Council white paper examines how credit unions can navigate economic downturns and increase membership by attracting young consumers, improving the member experience, and examining opportunities for mergers and acquisitions.

Mergers, including credit unions acquiring banks, have long been a key strategy for credit union growth, says Sam Brownell, founder/CEO at CUCollaborate.

However, the white paper acknowledges that mergers aren’t always easy.

“Credit unions need to approach mergers with caution,” Brownell says. “Members of smaller credit unions most often benefit, but strategic changes within a credit union are as likely to improve members’ lives as mergers.”

Four key considerations for credit unions exploring a merger:

1. Define outcomes the credit union expects to gain. What are the key performance indicators, benchmarks, and timelines? Are there alternatives to merging? Defining the expected outcomes will help mightily when the credit union begins seeking a merger partner.
2. Know that organizational and cultural fit matter. “Start with market/membership and organizational identity/vision/purpose,” says Taylor Nelms, senior director of market insights and advisory services at Filene Research Institute. “Then, think about leadership approach and how to align management and communication expectations, technology, and workflow processes.”
3. Take a multi-stakeholder approach. Map out the potential impacts to all stakeholders while providing transparent and strategic communication.
4. Choose merger partners wisely and conduct thorough due diligence. Mergers don’t guarantee success. Organizational and cultural fit are critical to success and require significant due diligence.

Ironworkers USA Federal Credit Union CEO Teri Robinson stresses that mergers aren’t credit unions’ only option, suggesting many institutions could survive by better serving their specific fields of membership.

“Get the members excited,” she says. “Members take a lot of pride in having their own credit union. Lean into that pride and embody what your field of membership is about. Tailor your products and services specifically to meet members’ needs. It’s critical to make sure we’re making the right decisions to make it sustainable for them now and into the future.”

Jim Burson, partner at Cornerstone Advisors, believes member experience is the key to gaining members. He says credit unions that improve the experience for young members will secure future growth. 

“Attracting younger generations requires familiarity with their expectations and financial challenges,” Burson says. “With many young consumers expecting superior digital services, credit union technology must be up to date, including mobile apps, remote deposits, and chat features.”

While modern technology is a priority, many young people also care about low rates, corporate responsibility, and financial education.

With that in mind, the white paper suggests credit unions looking to attract young members should offer relevant, high-value products and services. These include credit-building programs, budgeting tools, financial counseling, and child care support.

“Credit unions should promote the ‘people helping people’ philosophy and how much they’re involved with and donate to local communities,” says Amanda Swanson, Cornerstone Advisors senior director for delivery channels. “Be authentic. Younger generations are looking for experience and connection. Building on authenticity and relating to people versus the ivory tower approach will benefit credit unions.”