“When big banks own 70% of the market, that's the competition,” Krajicek said. “Why would I want to steal market share from someone who has 3% to 4% market share,” he asked referring to credit unions and community banks.

He added, “The consumer draws a huge distinction between David and Goliath. The difference between a community bank and a credit union is very small but the difference between them and a mega bank is very big.”

To be able to compete on a larger scale, Money One is a member of a group of midsize credit unions from five Eastern states that come together to share best practices, success stories and to “sometimes commiserate,” Zook said.

The group of 20 to 25 CEOs, which has been meeting for more than 20 years, comes together on a semi-annual basis to discuss such topics as loan and revenue generation and expense reduction. Outside experts are brought in to offer insights that could impact strategic plans. Better pricing packages are another advantage of the coalition.

In addition to meeting with like-minded credit unions, Zook said Money One collaborates with several CUSOs including for member business lending, disaster recovery and mortgage origination and servicing, the latter alliance in place because the credit union is too small to have a mortgage division on its own, she noted.

A shared branching partnership takes Money One's two-branch network to 5,000 branches and its three ATMs to 2,100 kiosks. The credit union is also a BancVue client.

“Collaborating with CUSOs allows us to get the economies of scale of larger credit unions,” Zook said. “Money One, at $105 million, is still considered small in the banking world. (Collaboration) allows us to compete with mega banks for consumers who think they can't get (products and services) at smaller credit unions.”

Years ago, 1st Valley CU started networking and sharing when competition wasn't as heightened, Stockdale said. That started to change when the credit union moved to a more open field of membership.

“There was a bit of overlap and leeriness of working with other credit unions,” Stockdale recalled. “It was slight but not too much. Some were still holding back and a little standoffish.”

The pull to collaborate became stronger as operational and competitive pressures increased, Stockdale said. It was once the “cut the expense type” but a shift has since occurred.

“It was a real eye-opener for me to see that income generation per member would be much more profitable than cutting expenses. We really changed our focus based on that relationship.”

For instance, 1st Valley CU went through a period of being with a data processor that turned out to be somewhat limited in helping to enhance member service, Stockdale said.

The credit union later aligned with CU*Answers, a Grand Rapids, Mich.-based data processing CUSO serving more than 190 credit unions in 18 states. The system in place now at 1st Valley CU is “extremely supportive of collaboration.”

BancVue offers Kasasa, a suite of products and services that includes high-interest, fee-free checking accounts with debit cards, high-interest savings accounts and a number of different loyalty programs to help credit unions and community banks compete with regional and national banks.

Krajicek said with consumers receive an average of 5,000 marketing messages a day, competing for market share has become very expensive. He referred to a slide to illustrate just how costly it can be.

“You have two credit unions and a community bank all in the same market. They overlap a little. The little dots (on the slide) represent the customers they want,” Krajicek explained. “Each is spending $100,000 for their version of their product. But they're all being drowned out by the mega bank that's spending $200,000.”

Through Kasasa, credit unions and banks can collaborate and come up with a $300,000 budget to compete with the larger banks, Krajicek offered. Indeed, Kasasa took the collective budgets of four financial institutions to pay for a television ad, he added.

“You're not just competing against banks. Now it's Walmart and direct banks like Ally Bank,” Krajicek said. “If you look at how the big guys are winning, they're using a lot of things that cost big money. How will you compete as a credit union? You'll be a whole lot stronger competing as one united force. After all, even the mega banks are teaming up to compete against credit unions.”

Stockdale said community banks don't seem to have an issue with credit unions – “it seems to me it's the trade associations that are fighting.” Zook said With Money One being a BancVue client, at least once a year, she interacts with bankers.

“I sit in the room with bankers, I talk to bankers, I eat meals with bankers” she said. “I realize that smaller community financial institutions are going through the same things as credit unions. They're not the enemy.”