Think your credit union occasionally creates some internal barriers to growth? Listen to this story from CEO Frank Corcoran:
"When I joined the credit union in 2000 it was a very different organization," recalled Corcoran. "We had one savings account and one loan account, and we expected our members to jump through hoops to take advantage of either. We had a joining fee. The banks and mutuals did not. We had a limited common bond. And we had restrictive loan conditions-if our members were fortunate enough to achieve a loan. You had to be a member for six months to apply. You had to have a written application. You had to have an interview with our credit committee, and they met twice a month if you were lucky. We made it very difficult."
Things are much different today, and the numbers make that clear. Corcoran heads up No. 1 CopperPot Credit Union. It's a great name so it might not surprise you that the credit union is British, with just one office near the Manchester airport. When Corcoran came aboard 13 years ago it had less than 20 million pounds in assets; today it has 107 million pounds.
The Four Barriers
Corcoran, speaking to the World CU Conference in Ottawa recently, said he has found there are four barriers to growth:
Self-Imposed. This is the barrier Corcoran described above.
"My first task when I joined the credit union was to do away with these barriers," he said. "We replaced the joining [membership] fee and replaced it with an incentive. We expanded to all police in the U.K. [a potential membership of 200,000 drawn from 43 police departments from England and Wales.] We introduced capacity-based lending, that is, based on ability to repay. All the information we needed was in the application, and we also used credit [bureau] info.
Under those circumstances we asked, "Why wouldn't you join?'"
Geography. The second barrier Corcoran and No. 1 CopperPot CU have had to overcome is the serving such a diverse and widespread membership from that one office. "It can be a nightmare to serve," he admitted. "We did it by developing relationships with organizations already in place, such as the Police Federation of England and Wales, and we are in regular contact with payroll departments. The goodwill is there and they support us, but we have to give something back. We advertise in their magazines, attend their charity events, and put money back into their coffers."
Communication. With just that single office, talking to members and potential members in branch is not option. "So we have had to adopt as many ways of communicating with people as we can, and we try to make it as simple and pleasant as possible. We make sure the phone doesn't ring too many times before we answer."
The credit union also uses another strategy that CUs in this nation could "borrow": it sends members a birthday card which also includes updated account statement and a three-question questionnaire asking: What do we do well? What could we do better? And what services would you like us to add? "This give us rolling feedback and early warning signs, and lets us know what members want," Corcoran said.
Its website has also become a key part of its growth strategy, with 95% of applications for new memberships and loans being filed online.
Competition. "Competition for financial services in the U.K. is absolutely fierce. If we can't compete, we can't grow," said Corcoran. "With our products, our strategy has always been to provide unique products designed around individual needs with some kind of added value; something to make them different from the general market. The other half of that is the service. You can have the best products available, but if you don't have the service to back that up, you won't sell them. Our staff believes we have the best credit union in Britain, and they are committed to maintaining that."
The good news: in a recent survey, 70% of those who joined on line say they had heard of the credit union from a colleague. The bad: there remains a general perception challenge. There are about 400 CUs in England, and only 25 offer a full menu of services, and just four offer mortgages.
Price Vs. Value
Corcoran turned to an observation made by Oscar Wilde to sum up his view of an issue that's germane to every credit union around the world: "Nowadays people know the price of everything and the value of nothing.
"Oscar Wilde said that 150 years ago, and it's still true today," said Corcoran. "Sometimes the best strategies available to us are the easiest to implement. Our members know the value available to them."
Frank J. Diekmann can be reached at fdiekmann@cujournal.com.
