Empathy & Economics: Why credit unions lead the charge
4 May 2021
The world is changing, and customer expectations are changing with it.
Socially conscious consumers are redefining what’s important to them when choosing where to spend, save or store their money. No longer won over on price or discounts alone, new data from Roy Morgan and COBA (Customer Owned Banking Association) shows people value ethics and trust when selecting a service provider and that empathy led models are coming up trumps.
More choice, more time to compare and more interest in social issues have allowed customers to literally put their money where their morals are.
Kaj Löfgren, head of strategy at Small Giants states that the crisis witnessed through 2020 provided a perfect opportunity to push for change. “Our economic system has been fundamentally disrupted in the last 12 months, and it’s in this moment that this idea of the next economy or an economy based on sustainability and based on justice for all is so important.”
And surely, it’s even more important to trust a company when they’ve got access to your money, right?
More than a bank
The financial services industry has had a somewhat rocky reputation in recent years, leading to some public feelings of distrust and frustration (thanks to the Royal Commission into misconduct in the banking industry).
And now, with more available options and a strong desire to feel valued, those customers are seeking out member-owned and empathy led banks such as credit unions.
The credit union and mutual bank model makes customers part of the business, and they can benefit from increased transparency, community and care.
Michael Lawrence, CEO of COBA (Customer Owned Bank Association) states “While customer owned banking institutions were at the forefront of customer satisfaction prior to 2020, the past year has brought the customer owned model into sharp focus,”
“Our members (customer owned) outscored other banking institutions across the spectrum of customer perceptions, including empathy, sensitivity and compassion. These soft skills are fundamental qualities of customer service in our sector, and highlight the relationship focus of the customer owned model.”
Why people are choosing customer owned financial institutions
Here are 4 reasons that customer owned financial institutions are continuing to top satisfaction reports:
Not just a numberIn a credit union, customers are also members, this essentially means that when you join you become a part owner! Because of this, each member is valued and can have more opportunity to be involved in processes, benefitting from a better relationship with their financial institution.
TransparencyIn a post-pandemic world, customers are feeling the pinch of an ever-changing market. According to Nielsen, after the Federal Government announced the stage 1 restrictions in March 2020, Aussies spent almost 500,000 hours per week reading financial news, a 43% increase from the year before.
The good news is customer owned financial institutions that follow the Customer Owned Banking Code of Practice have a responsibly to be fair and ethical and give clear information about products and services. Transparency is not only expected but is a key part of putting members needs first.
Vulnerability and compassionOver half of the population (52%) have risk factors that can lead to vulnerability, including job security and financial position says Michael Lawrence, CEO of COBA. “Our research - shows the alarming complexity and prevalence of vulnerability spurred on by COVID 19”.
COBAs recent Spotlight on Customer Vulnerability report saw customer owned banking institutions rate 21 points higher on satisfaction than other banking institutions when responding to customers experiencing vulnerability vs other banks (97% v other banks 76%).
TrustTrust can be described in many different ways, but according to Sales Force when it comes to trusting an organisation 80% of customers say the experience a business provides is just as important as its products or services. And 90% of customers say how a company acts during a crisis demonstrates its trustworthiness.
According to a recent report by COBA, customer owned banking institutions lead customer trust. COBA CEO, Michael Lawrence, said “the results speak to the commitment of customer owned banking institutions in prioritising the security of customers during the health crisis.”
How to spot an empathic company
So, what are some ways to spot a company that leads with empathy and compassion?
How they communicate
Think about how they talk to their members and stakeholders via their website, socials and brochures. Do they use industry jargon that leaves you with more questions than answers, or are they clear and educational so you feel empowered to make informed decisions?
How they impact the community
A key focus for empathetic businesses is their commitment to corporate social responsibility. Do they support local charities, get involved in important movements, have positive equality procedures in place?
How they take feedback
This is an important thing to consider if you’re looking to move service providers, how will they listen to you and will your feedback make a difference? Do they have various channels of communication and can you get in touch with someone quickly?
At Credit Union SA we believe financial institutions have an obligation to help improve the lives of people in their communities. We’re proud of our commitment to people, empathy and compassion, and we embrace it through every part of our organisation. From the supportive work environment for our team to the commitment to great service we make to our members.