Credit Unions

Why reputation matters to small credit unions

Denise Wymore
September 25, 2023

What does it mean to be a financial cooperative? Cooperatives trace their roots back to the first modern cooperative founded in Rochdale, England in 1844. There are seven cooperative principles and cooperatives around the world operate according to these same core principles. 

Being a financial cooperative is a reputation credit unions need to protect. It has been instrumental in shielding the movement from taxation. This unique distinction, where members are the owners, governance is democratically driven, the institution operates autonomously, and it is inherently dedicated to community welfare, underscores the significance of safeguarding this reputation.

Finding the right partners ensures that the credit union can fulfill its mission and preserve and strengthen its reputation. The sixth cooperative principle, cooperation among cooperatives, is, by definition, a Credit Union Service Organization (CUSO). 

Linda Bodie, Chief & Innovator at $52 million Element Federal Credit Union, said this about her alignment with seven CUSOs, “I now have the power and knowledge of countless experts. I don’t have to do it on my own. I don’t have to create everything. The sharing goes both ways… get resources, give resources to make the CUSOs better. If you’re a Star Trek fan, it’s like the Borg, a collective, but in a good way.”

Indeed, small credit unions should not go it alone, that’s what makes the movement and reputation in the market so unique–the credit unions’ willingness to work together for the greater good. For example, CUNA Strategic Services (CSS) connects credit unions and leagues to the industry’s top solution providers. This alliance drives membership, grows revenue, promotes operational excellence, and fosters collaboration. 

Credit unions were organized for the purpose of promoting thrift among its members and creating a source of credit for provident and productive purposes. Lending is paramount, not only to the bottom line but to meet the needs of your members using the best possible tools to determine their creditworthiness. If you’re still using the traditional scoring model that we know is biased, you are leaving members out, and it can hurt your reputation. Once you say “No” you’ve likely lost them for life. 

In the beginning, most credit unions were single sponsored and if a member had a bad experience, they would likely tell their co-workers. Today the landscape has been significantly reshaped by the emergence of social media and influential platforms like Yelp, which wield substantial influence as word-of-mouth marketing tools. 

Reputation management is vitally important today. One of the tools that is widely used to monitor and manage reputation is the Net Promoter Score (NPS) survey. NPS measures customer experience and predicts business growth. By asking the ultimate question, “How likely are you to recommend?” it has become a key measure of your members’ overall perception of your brand (reputation). 

When choosing a technology partner, it’s crucial not to make up-front costs the sole determining factor, even though it might seem tempting in today’s economic climate. Over the long term, prioritizing cost over a genuine commitment to the credit union’s unique needs could prove to be a more expensive choice. Time and again we’ve witnessed technology companies neglect or overlook the ever-evolving requirements necessary to stay competitive. 

Eric Bruen, CEO of $67 million Desert Valleys Credit Union, and a Zest AI client, had this to say at the Shapiro Group meeting last year, “The California Credit Union League’s endorsement of Zest AI was very important to me. I want to have a relationship with people that are aligned with the values of credit unions, understand what a member is, and what the not-for-profit financial cooperative model means.” 

Zest AI is a mission-aligned CUSO partner to credit unions with over 70 credit unions invested and with valued partnerships like CUNA Strategic Services, Zest AI is committed to the future success of credit unions. 

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Denise Wymore is an inductee to America’s Credit Union Museum and a cheerleader for passion and commitment. Currently, she is the Marketing Manager for Small Credit Union Initiatives at Zest AI and is proud to be a credit union lifer who started her career as a teller. 

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