CU Satisfaction Grows Over Banks, but Not All Problems are Reported

While faring better than banks, some credit union members have long memories of short-term problems, and not all of those problems are reported, according to CFI Group’s 2018 year-end Credit Union Satisfaction Index

Credit unions have widened the gap over banks in Ann Arbor, Mich.-based CFI Group’s latest findings as measured against bank satisfaction. The CUSI – calculated based on feedback from a panel of 497 members who have a current financial relationship with a credit union – is 86, as measured on a 0-100 scale. Credit union satisfaction historically has run several points higher than its bank satisfaction barometer. Banks had closed the gap to 2 points in 2016, but the gap has widened again to 6 points in 2018.

However, members having a problem within the last 60 days are less satisfied with the credit union experience, less likely to remain a member, less likely to use additional services, and less likely to recommend the credit union to others.

“It’s really about resolving member problems,” Sheri Petras, CEO of CFI Group, said. “Of course, you’d like to eliminate member issues completely, but that’s not realistic; there will always be some members who experience issues. And we have found that a third of those members never report the problem to the credit union. The challenges for the credit union, then, are to run member feedback mechanisms that capture unreported problems, and develop the processes needed to deliver rapid and effective problem resolution for members.”

The report pointed to credit union industry’s competitive environment and a CUNA report showing overall credit union membership increasing each year since 2012. “And for the first six months of 2018, the total number of U.S. credit union members grew 4.3%. Yet, the number of credit unions continues to decline, down from 6,680 in 2013 to 5,594 midway through 2018.”

The report identified seven drivers that make up the experience. Most driver scores across the experience moved up from 2017 to 2018. Branch Convenience, branch staff, rates and fees, information/communications, products and services, mobile applications, online banking,

The branch experience improved most. Branch convenience and branch staff are up 4 and 3 points, respectively. Most other scores are up 1 or 2 points. Online Banking is the only area that slipped from last year. However, the high score of 88 demonstrated strong member appreciation for the online tools made available by credit unions.

The CUSI focused on two findings that affect how credit unions should engage members:

1. Competing on rates and fees is not enough. It is difficult to offer rates and fees that are substantially lower than competitors. It is understandable, then, that only 18% of credit union members choose a credit union because of attractive rates and fees. Good rates and fees are a given.
2. Credit unions must develop a rapid problem resolution process. Members who have an issue or problem within the last 60 days are less satisfied and less likely to remain a member. Credit unions need to develop processes that quickly and effectively address member issues.