PLEASANTON, Calif.-It's been 100 days since Bank Transfer Day, and newly released data indicate that as many as 5.6-million Americans have changed financial institutions in recent months.
Not all of those people joined credit unions, of course, although CUNA has released its own analysis suggesting nearly 950,000 people became CU members during September-November 2011. December numbers are still being calculated.
Despite the big numbers, "this exodus was certainly not the massive departure banks might have feared," said Jim Van Dyke in his research blog for Javelin Reseach, noting that "Javelin's nine years of customer-transaction research insights has found that people are highly resistant to moving their money ...Yet this time, Bank Transfer Day and the Occupy Movement did have a measurable impact."
Javelin's research estimates 5.6 million Americans with a banking relationship changed providers in the past 90 days, and of those, 610,000 (11%) cited BTD as the reason. Another 26% cited high fees; it was BofA's proposed $5-a-month debit fee that prompted BTD in the first place.
CUNA's estimates on new CU members, initially called out for being inflated due to counting both "new members" and "new checking accounts, still show significant growth. The trade group now estimates credit unions added 441,000 new members in September (277,000) and October (214,000) 2011. Those 441,000 new members in just two months represent nearly 75% of all new membership growth the previous year (600,000 in 2010).
Although numbers for November are still just estimates at this time, CUNA believes credit unions added another 500,000 new members in November, for an estimated 941,000 members added since September.
The question now: can credit unions continue to leverage the anti-bank, anti-fee sentiment that fueled Bank Transfer Day?
What initially helped drive BTD's success may not be enough for credit unions to sustain this effort, Van Dyke said. "At one recent point, a simple Google search of 'Bank Transfer Day' yielded 22,000,000 returns. Nothing like this happened for Huffington Post's moveyourmoneyproject.org, so the actual bank-switchers didn't even register in our research," he observed. "This could even suggest that current efforts to 'Make every day bank-switching day' will be unfruitful until more fundamental gaps shown in Javelin's research data are met with new products and messages."'
The Occupiers' Dilemma
Those new products and messages, Van Dyke said, need to address what Javelin refers to as "The Occupiers' Dilemma."
"This is due to most of the faces at the Occupy Movement being young and technology-savvy, yet using the capabilities that are in much greater supply at larger banks. Credit unions are in a difficult position, because they generally can only choose from technology vendors with customer-facing capabilities that don't match favorably to those of Bank of America, Citi, Chase, or even Wells," Van Dyke explained. "This starts with online account opening, which fails for consumers most often at small FIs, continues with member-service capabilities that must use the channels and products people crave, and ends with loyalty-building capabilities that tie into mobile, social and so much more."
Van Dyke went to some of the Occupy sites to conduct interviews with Occupiers right in their own tents. "I conducted one pair of interviews with a highly articulate. college-educated brother and sister, which stood out in my mind because it was such a poignant example. The brother had a desire to move from a large bank to a credit union, but posed several of his worries to me. Essentially, he was pondering this switch as an act of self-sacrifice due to the online, mobile, and social capabilities that make up so much of his life," he related.
"The sister was less conflicted, sounding like an infomercial for PNC as she extolled their praises and determined to never leave the bank. These views were conducted within an Occupy tent located in the shadow of the Federal Reserve Bank of Boston, and this demonstrates why many who will wait in line overnight for the next Apple device is unlikely to leave a large bank for a credit union."
Good News, Bad News
The good news is the mutual structure of credit unions and their shared-value approach to financial services is a message that resonates with Occupiers and those who were inspired to act on the BTD message. The bad news is that credit unions still need to do more to get that message out and make good on the promise with an even bigger investment in technology, Van Dyke said.
"As someone who has advised large organizations on branding I will say the following: conceivably credit unions are in a superior position to large banks, yet they need to address fundamental gaps in their channels and messages to reach today's emerging customer," Van Dyke told Credit Union Journal. "My first professional exposure to the financial services industry was in the credit union industry, and my personal work with non-profits gives me a strong appreciation for their mission. Yet our data show that today's credit unions simply aren't doing as good of a job as large banks at delivering on what emerging consumers want. Think of this like the phones that are so essential to young or technology-loving people: even if RIM (the company behind the Blackberry) were turned into a non-profit, that wouldn't mean they were doing as good of a job as Apple in giving today's connected individual what they increasingly want. As we have said after reviewing our many research surveys of member and customer behavior, 'credit unions get the love, and large banks get the accounts.' It's all about delivering on today's essentials."
