Well, according to a recent story from CNN Money, it is indeed harder than it sounds. In an article published on 7/24/12 the author, Blake Ellis provides some statistics that I wish I could describe as surprising. But unfortunately, they are all too common.
For example, Ellis states that banks are charging customers significant fees to transfer money from their accounts to other financial institutions. It costs anywhere from $7 – $10 for certified checks and three times as much for wires. Of course, there are ways for consumers to avoid these fees. For smaller accounts, a customer could simply write a check and deposit it into their new account – say at a credit union. But for larger accounts, certified checks are the most secure option (both for the consumer as well as the receiving financial institution.)
Another issue brought up in the article is the perceived hassle of transferring direct deposits and payments. 63% of survey respondents indicated that it was too much work and would take too much time to do all of this. There’s a reason why financial institutions refer to direct deposit, bill pay, and online banking as “sticky” products. The idea is that once consumers are so “invested” in their accounts at a particular institution, the chances of them leaving dwindle. It certainly looks like this is true.
Finally, the Consumers Union report indicated that less than half of those who considered moving their primary accounts to another financial institution followed through and made the switch.
All of this sounds daunting for credit unions. But does it have to be?
Credit unions have been hard at work trying to attract more members. And I am sure that more than a few would agree that they are not seeing the membership growth they had hoped for because of some of the constraints mentioned in Ellis’ article.
But credit unions don’t throw in the towel! Credit unions provide solutions. They provide choice. They provide options. They provide better service.
Perhaps credit unions can look at these challenges as opportunities to truly demonstrate their willingness to serve new members. Here are a couple of ideas:
Reimburse the fees that the bank would charge for the transfer. I am not advocating throwing money at people to move their accounts. Individual credit unions will have to determine for themselves whether this is a realistic option. But doing something like this could go a long way in helping to create and maintain the long-lasting trust relationships that are the backbone of the credit union movement.
Create a process that would make it so easy to switch direct deposits and payments that consumers wouldn’t think twice about making the switch. Offer to take the time to sit with the member while they input all of their payment accounts into your credit union’s online banking platform. Let them do it at your desk! Show them that it really isn’t that difficult and won’t take a great amount of time. Perhaps your credit union can create a secure program that would allow the credit union to do all of the “busy” work for the new member. Sounds pretty simple, right? Well, “simple” and “convenient” are what consumers want. Why not give them exactly what they want? The banks are already making things way too complicated for them. So let’s give them uncomplicated solutions.
“We Make It Easy” – Sounds like a pretty good slogan for an upcoming membership drive or campaign.
Consumers have a right to choose where they conduct their financial business. Credit unions should remind them of that and make it easier for them to choose to do business with us.