In 2013, for the 9th consecutive year, Canadians ranked Credit Unions First in Overall Customer Service Excellence among all financial institutions based on the annual Ipsos Best Banking Awards Survey which is based on various key performance indicators.
That’s a pretty good indicator that Credit Unions are doing Customer Service “Right” And that’s just one reason that I think they have a really large & bright future ahead. There are a lot more.
This statement has nothing to do with the fact that we think Credit Unions are a perfect partner provider for Legacy Tracker (they are). But rather, the fact that they ARE a perfect prospect for LegacyTracker is because their fundamental approach to how and what they do is similar to our goals for LegacyTracker. We also wish many more businesses could operate in the same way, but that’s a BIG wish. It’s also a BIG challenge for those where their stock price is always expected to go higher.
However, the fundamental approach that Credit Unions operate under is a quite a bit different than Big Banking. For Credit Unions and other co-operatives, it’s more about …
Profits for a higher purpose and Banking for a higher purpose
Credit Unions and other Co-operative financial institutions are non profits that have a dedication instead to the people and the communities they serve . That dedication, guides and shapes their operations, their business decisions and their governance. That makes for a critical difference.
The Credit Union Difference makes a Difference in Service
This fundamental difference in the way Credit Unions & Co-operatives operate can be sourced back to the very first Credit Union or Caisse Populaire that was founded in Levis, Quebec in 1900 by Alphonse Desjardins . Mr Desjardins launched a new type of financial entity in response to what he saw as outrageous interest rates being charged to labourers and farmers. A movement towards what was termed co-operative banking where a financial institution was owned & run by members caught on; particularly by those who were being “underserved” by larger financial institutions. Today, approximately 1 out of every 3 Canadians belongs to a Credit Union or Caisse Populaire giving Canada the world’s highest per capita membership in Credit Unions. With over 330 different Credit Union Brands and over 1,700 locations, they are easy to find and easy to join.
Account holders in Credit Unions today, continue to be considered as the shareholders members, or owners of each Credit Union. As such and in the spirit of any good democracy, each of those owners is provided with 1 Vote (regardless of the size of their wallet) to decide help guide the Credit Union’s direction and to determine who will lead that direction or form the Board of Directors. Those members can also put their name forward for to serve on the Board of Directors.
By comparison, our much larger, federally chartered/publicly held banks are required to operate in the best interest of their shareholders but those shareholders may or may not include account holders unlike Provincially chartered Credit Unions where the shareholders are also the account holders/customers. That makes for a really BIG difference.
Operating in the best interest of their members means Credit Unions will redistribue profits on a regular basis to members and also give back in a BIG way to the local communities where those members live. In 2012, Canadian Credit Unions contributed more than $35.6 million to communities in the form of direct donations, sponsorships, scholarships & bursaries and donations-in-kind. It’s a pretty nice Win/Win that makes paying interest or fees a lot more palatable, knowing that they contribute to profit which you or your community will benefit from down the road.
Having said that, Credit Unions do tend to charge lower fees while offering higher rates of interest on your savings.
The fact that it’s not all about BIG profit for Credit Unions may also account for the very rich history of innovation that Credit Unions can boast about:
- First financial institutions to lend to women in their own names (in the 1960s)
- First full-service ATMs
- First fully functional online banking
- First loans based on borrower character
- First payroll deduction service for deposits and loan payments
- First open mortgages & home equity lines of credit
- First debit card service
- First registered education plans
- First cheque imaging service
- First to offer branchless banking (Citizens Bank)
If you are looking for just a few Good examples of the Good Work that Credit Unions are doing in the Community, follow along just below. If you happen to work with a Credit Union and wish to find out how LegacyTracker can help your Credit Union provide even greater value to your members, please get in touch !
FirstOntario Credit Union recently partnered with the New Hamilton Innovation Hub/Collaborative workspace that traditional lenders turned down Read about it here
Libro Credit Union offers Community builder Grants to help youth develop leadership and career skills in the Communities they serve. In 2014, those grants total approximately $560,000 Read more here They also offer Money School online
DUCA Credit Union who recently launched Canada’s first 100% online service to members, including New Members sign/up (via “SNAPP”), donates 4% of profits to the community and commits an estimated $500K to the Ontario Credit Union Charitable Foundation Read more here
Doing good for Members & Doing good for Others makes a difference for many of us when we are looking for who to do Business with ourselves. & that should make the future very bright for Credit Unions
We do think that LegacyTracker is a perfect fit for Credit Unions to offer to their members/account holders; so if you work with a Credit Union or are a member of one…pass our name along or Connect. (Please)