What’s your favorite board game? One of my personal favorites is an old strategy game called “Axis & Allies.” In the game, each team controls a portion of the world map. You must outwit your opponent each turn to capture their capitals and achieve victory.
But imagine if you couldn’t see what moves your opponent made. You wouldn’t know what to do next. Now, imagine if you did that in real life – the results would be disastrous!
If your credit union or community bank is going to play the game, it’s important you know your competition’s strategy. Let’s go over your competition’s strengths and plan your counterattacks.
1. Checking Accounts
We discussed this topic in a recent blog post, but it can’t be repeated enough…your checking account business is not as safe as you think it is. Walmart uses a completely free model with high overdraft caps to open 9,000 checking accounts a day. PayPal not only allows direct deposit, but it also issues fee-free debit cards.
How do you respond? You must cut checking account fees and find new revenue streams. See if low-dollar emergency loans add more interest income while helping the less fortunate. Or try setting up a money transfer system where you can charge transaction fees (which is how PayPal makes a lot of its money).
2. Online Loan Decisioning
Everyone wants younger members or customers, and online loan decisioning is a great way to target them. But even if you’re not seeking a younger demographic, this feature is important. Why? Two words – speed and convenience.
Navy Federal Credit Union, your largest credit union competitor, says they’ll decision your auto loan in five minutes or less. Whether a Gen Xer scurrying to buy a replacement vehicle or a Gen Zer casually finding their first car, this offer rings true. The faster the decision, the faster they get a car.
Implement online loan decisioning to keep pace with your competitors. And if your core can’t handle it yet, you need to make core conversion a top strategic priority.
3. Consumer Experience
Local institutions are incredibly confident in their consumer experience…maybe too confident.
Our mystery shops find local banks matching or exceeding the service quality of credit unions, and big banks’ satisfaction ratings caught up with smaller banks as of 2021. This means you underestimate your opponents if you assume they have bad service. It’s simply not true anymore, even if it used to be true.
So, don’t sleep on your laurels. Strive to create a consumer experience better than other institutions, measure its success and keep improving. Because a monopoly on quality service isn’t a given; it’s something you must constantly pursue.
And if you need more aid than a blog post, our Credit Union Growth Accelerator program is here to guide your growth path and help you realize your full potential.
Get started today!
