Does Highlighting the CU Difference on a Website Make a Difference?

When credit unions highlight the credit union difference on their websites does it make a difference when it comes to financial performance?

Yes it does, according to a Filene review of nearly 400 credit union websites. Financial cooperatives that showcased or prominently displayed the credit union difference, in whatever form, perform better across key performance metrics such as asset growth and return on assets.

The review was compiled for Filene by Luis G. Dopico, a Filene economist, Taylor C. Nelms, Filene’s senior director of research and Andrew Turner, a lecturer for the University of Wisconsin Law School.

Turner evaluated 378 credit union websites and classified them as to whether and how strongly they highlight the credit union difference. The three categories were “very explicit,” which stands for credit unions that highlighted the credit union difference in detail on their homepage, “more explicit,” which means credit unions highlighted the credit union difference on their website, and “less explicit,” which stands for credit unions that did not highlight the credit union difference on their website.

Only 23 credit unions were classified as very explicit, 233 were classified as more explicit and 122 were categorized as less explicit, according to the research review. These categories were then compared to each credit union’s financial performance metrics.

The very explicit credit unions posted asset growth of 9.8%, while the more explicit credit unions recorded asset growth of 6.1%, and the less explicit credit unions had asset growth of 2.8%. Very and more explicit credit unions had higher return on assets, 0.94% and 0.95%, respectively, while less explicit credit unions had an ROA of 0.78%.

The research also showed very and more explicit credit unions had better loan and deposit rates and offered a broader range of products and services than the less explicit cooperatives.

However, the very and more explicit credit unions did have higher delinquency ratios, 0.65% and 0.88%, respectively, which indicates they may have more inclusive lending policies, according to the researchers. The less explicit credit unions had a delinquency loan ratio of 0.56%.

This review was part of a larger research report, “Who Do Credit Unions Belong To?” This report examined how credit unions are perceived by Americans who are socially and politically polarized and what are the challenges for credit unions among people who are socially and politically disengaged.

The report also noted that to a remarkable extent, credit unions do not talk about their mission in a clear and upfront way. Only 17% of credit unions clearly signal that they are different from a generic bank and that more than 80% of credit union websites were indistinguishable from a bank on the home page.

The researchers acknowledge that prominently showcasing and detailing the credit union difference on a website will not, by itself, improve a credit union’s financial performance.

“Instead, credit unions with a management and culture that are committed to the credit union identity, mission and principles may find that commitment reflected in their marketing and operations and this may translate into performance,” the researchers wrote. “In short, credit unions should not shy away from wearing their credit union identity on their sleeves —- or displaying it prominently on their websites.”

It may be more beneficial for credit unions to highlight the credit union difference on their home page rather than on internal pages because up to 50% of website visitors never go beyond the home page.