By Frank J. Diekmann
With summer officially here (and with Southland CU in California officially dubbing itself the “Official Credit Union of Summer,” that only leaves three seasons to be snapped up and branded, so hurry), here are a few thoughts and observations as you head to the beach/pool/mountains (and now that I think of it, that also leaves opportunities for your CU to be the “Official Credit Union” of those, as well):
‘It Gets Smarter, You Get Dumber’
As reported earlier here, Douglas Rushkoff recently packed a whole lot into a hour presentation before credit unions meeting in San Diego. Rushkoff is the author of "Team Human" and numerous other books, a historian and podcaster, and a media theorist and professor of media theory and digital economics with CUNY/Queens.
Among some of the observations not included in our earlier report:
- “Every time you swipe your smartphone it gets smarter about you and you get dumber about it,” he said.
- Rushkoff said all the talk around disruptive companies, such as fintechs, is wrong. “These companies are not disruptive at all. They are the most reactive companies I’ve ever seen,” he said. “They are there to prevent disruption. What happens when they realize there is no growth? They get like Wells Fargo—they play mean.”
- Rushkoff shared an interesting anecdote around how community can be lost. He related how he had grown up in a lower middle class neighborhood in Queens, N.Y. where everyone shared a grill that helped to bring the community together. His family eventually moved to a higher-income and nicer community–but there was one big change. “We were no longer barbecuing with the Joneses, we were barbecuing againstthe Joneses,” he said.
- Finally, Rushkoff had this advice for credit unions: help make members rich—or at least better off financially. “This is anathema of Google or Amazon. They don’t think about, ‘How do we help that person make money?’ You want everyone in your chain to do well for doing business with you. When people are happy it doesn’t mean you did wrong, it means you did well.”
Say Aloha to This
Let’s face it: Local, off-year elections for the county tax collector that are held on wintry, bleak days frequently see a higher voter turn-out than many credit union board elections (which, sad to say, is how some like it). So here’s an idea a lot more credit unions should borrow in the name of doing good on many fronts.
Hawaii State FCU has again staged a unique fundraiser by linking a charitable donation to the number of votes cast in the election for its board of directors.
Hawaii State donated $10,000 to the Center for Tomorrow’s Leaders after encouraging members to vote by offering to donate $5 for every online vote, up to $10,000.
It isn’t the first time Hawaii State has made the offer. The credit union said donations tied to its board elections have raised more than $40,000 to support local nonprofits, including Big Brothers Big Sisters Hawaii, Kapiolani Children’s Miracle Network, Make-a-Wish Hawaii and PBS Hawaii.
“Through our board of directors election, members have a unique opportunity to give back to their community and support a cause that sets Hawaii’s youth on the trajectory for future academic and professional success,” said Andrew Rosen, president and CEO of Hawaii State FCU. “
A Paycheck Motel?
The checking account may be an oldie, but it’s still considered the goodies when it comes to what determines a consumers PFI. But should it be?
Ron Shevlin, managing director of fintech research at Cornerstone Advisory, recently offered some interesting observations on assumptions held by many about why more bank customers aren’t moving to other institutions.
Shevlin pointed to JD Power's 2019 U.S. Retail Banking Satisfaction Studythat found just 4% of consumers switched primary banks in 2018, and said he disagrees with the interpretation by some that “Customers are staying put because banks, particularly large ones, have made banking so convenient that account holders are shrugging off any concerns they may have."
Shevlin’s argument: “Deposit displacement is diminishing the importance of the checking account.”
“Checking accounts have become ‘paycheck motels’—temporary places for people's money to stay before it moves on to bigger and better places,” wrote Shevlin. “The cause of this is deposit displacement: the displacement, or diversion, of funds from traditional accounts (i.e., checking) to alternative accounts.”
Examples of deposit displacement include health savings accounts (which hold $44 billion), P2P payments apps, merchant apps, robo-advisor tools, other savings tools from fintechs, and digital banks, he said.
“What's important to note there is that three-quarters of all consumers who expressed an intention to open an Amazon checking account said they would keep their existing checking accounts open,” wrote Shevlin. “Consumers don’t close out accounts, they just open new ones. Bank switching is on the decline because money movement is so easy, not because large banks have made banking convenient.”
You can read more here.
New Meaning for Contract
I’ve seen vendors at CU trade shows try a lot of practices and tricks and pretty crazy things over the years when it comes to capturing those passing by. But it’s going to be difficult to top this strategy by Mutual of Omaha, which during the NACUSO meeting had a python on hand to wrap around attendees, as seen at right being held by Guy Messick. (Messick is an attorney, but as this is a classy column, notice how I have stoop to any snake-related references here.)
Frank J. Diekmann is Cooperator-in-Chief at CUToday.info and can be reached at Frank@CUToday.infoor @FrankCUToday.