With a finger solidly pointed at big banks to explain the 2008 market crash, many sought to avoid the traditional banking institutions and use credit unions instead. This migration created new questions about just what a credit union is and how it differs from traditional banks.
Traditional Banks vs. Credit Unions: What’s the Difference?
At a basic level, the two institutions share many similarities. They both deal with loans, savings accounts and other financial services. There is one main fundamental difference between the two. One is for profit, owned by investors and shareholders. The other is not-for-profit and owned by its customers. If you guessed the former is a bank and the latter a credit union, then congratulations.
There is a lot of appeal to the idea of owning the place where you do your banking. Being not-for-profit means they can bypass many of the fees that banks charge due to much less overhead. Another big influencing factor is that most credit unions serve their communities, mostly because the members come from the neighborhood.
Unfortunately, credit unions are a little behind the times technologically. This may be a contributing factor to them not becoming as popular as traditional banks.
Here are five ways credit unions can make that technological jump to make the playing field just a little more even.
5 Small Tech Changes Credit Unions Can Make
1. Get With the (Digital) Times – Some credit unions have no online presence whatsoever. You could spend your life around the corner from one and never know that it even exists. Some of these places have no website or anything to let you know anything about them. In today’s society, that is a sin of the highest order. You need a webpage!
2. Update Your Web Presence! – As for the credit unions that do have websites, well, have you seen the websites of some of these credit unions? They are clunky, dull and sometimes un-navigable. These days, your website is a great reflection of the quality of your product. Nothing turns away people faster than a badly designed website.
Many of them lack features. When you log onto a big bank’s website, you reasonably expect to easily view your account information, make changes to your account, and maybe even order some checks and other related things. This is not the case with most credit union websites.
3. Go Mobile – Almost all the major banks have some sort of iPhone or Android app. When you consider how many people are on their mobile phones or other handheld device, this makes perfect sense. With more people moving towards mobile platforms and forgoing the PC altogether, this makes even more sense.
Some credit unions have attempted a mobile solution, but they need to just hire a decent developer to create apps for their customers. The faster credit unions get on the mobile banking bandwagon, the better off they will be.
4. ATM Access – A major downside to many credit unions is the lack of ATM access. Some credit unions use proprietary cards that work on just their few ATM’s located at the credit union itself. Some have moved up to debit cards with a credit card logo. However, there has been a movement recently among credit unions to establish shared branch networks. With these, members can use ATM’s or even conduct business and transactions with affiliated credit unions. It is definitely a step in the right direction.
5. Update Your Software! – Have you ever noticed that you can make transactions, then check your bank’s website or mobile app, and see the transaction noted instantly? Try the same thing with a credit union. Well, as mentioned above, you probably will not be able to check on your mobile and possibly not even through the website. So you call the automated teller service only to find out…your transaction has not posted yet.
Some of these large banks may have the superior technology that only big bucks can buy. They have the industrial-strength software and can hire the developers that really make their online presence shine. There is a lot of software for credit unions too, and whole companies dedicated to services for credit unions.
Most of these suggestions are not ridiculously technical, just small changes that should not cost much to implement. Most of them are for convenience. With just a few small changes, credit unions can grow their memberships and keep current and new customers happy.
This helpful advice was provided by Vanessa Mackay.