Oct. 15, 2025

Membership Growth Slowdown? Here’s How Credit Unions Can Fight Back

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Credit union membership growth is shrinking as per TruStage research, and the competition isn’t slowing down. In this episode of Leaders in Lending, co-hosts Lynn Sautter Beal, Drew Megrey, and Barry Roach dig into the hard truths about why CUs are losing members—and what can be done to turn the tide. They explore how fintech partnerships, smarter onboarding, and personalized member experiences can help credit unions thrive in a digital-first world. This isn’t a list of quick fixes; it’s a new way of thinking about building lifelong member relationships.
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Seventy percent of newly open accounts go inactive in the

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first ninety days.

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Anyone go fishing before.

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If you've got thirty percent of your cast had some

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sort of a bite, you'd be out there every day.

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Right.

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I quit my job just a few full time fishing.

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They don't care about their rate. They care about driving

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the vehicle off the lot, and they want to get

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it home.

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Credit unions focus on retention over acquisition. Hi, thank you

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for joining us today. Membership growth is some people think

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is shrinking across the industry. Some people think is just

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growing at a slower pace than it had been historically,

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and we want to talk about what's driving it and

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what credit unions can do to change that membership growth.

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So I've got Drew and Barry with us today. I

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guess one like, what's your reaction to that, that idea

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that membership growth is shrinking and why do you think

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that credit unions may be losing numbers despite loan growth today?

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I think membership growth is shrinking for some segment of

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credit unions. They tend to be smaller anyhow, and in

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some cases may not be able to have a digital

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platform that is not just attracting new members to them,

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but actually keeping members. Perhaps there's elements of banking transactions

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that their members can no longer do that they are

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otherwise getting served at perhaps a larger institution. I think

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the larger institutions are still growing from membership perspective, But

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of those memberships, you know, I do wonder if those

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relationships are getting deep into enough that they're going to

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be meaningful for the credit and going forward. We always

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used to talk about PFI primary financial institution. Well, I

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don't think anyone as a primary financial institution anymore.

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Personally.

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I deal with multiple credit unions and banks for different reasons,

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and it's just sort of happened to be that way.

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And I don't feel I have a need or even

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a desire to have everything in one place. And I

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know from my credit union experience, and Drew you probably

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had the same serve experiencing your credit uni that it

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was all about PFI. We've got Lynn now as a

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brand new member. How do we get everything from Linn's

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household financial transit financial products with us? And I just

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don't know if that's a reasonable objective anymore.

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And on that too, you think about what banking was

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I don't know, ten twenty years ago. From a relationship perspective,

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you know, Barry walk in with your parents and open

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up a bank account at XYZ Bank or Credit Union

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when you're sixteen, seventeen, eighteen years old and that's your

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primary financial institution because mom and dad have banked there

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for so long. It was more of a relationship style

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of being able to establish your banking and your future needs.

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Like that's just not a thing anymore. I mean, I

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know we have in branch experiences and people still go

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to in branch for specific things, but things are more transactional.

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It's more at your fingertips. You're able to do things

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on your phone, your tablet, your computer, so and so

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for right and people don't desire that type of relationship

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that banker. One knows mom and dad will get to

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know me, experience my journey through college and into the

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workforce and marriage and kids and all that stuff. They

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just want to click and open it. And then you

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think about the advancement of search engines. I mean, aside

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from Google Chat, GPT, you can go in and say

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I want a bank account that offers this, and you

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get an output right away. You click some buttons and bam,

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you have a deposit account. So I think it's just

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the landscape has change of you know, becoming members or

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becoming a customer of a bank, Like, there's way more

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at your fingertips to be able.

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To do that, right except the SEG based credit us right. So,

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I think the SEG based creditings still have a unique

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place in our industry, and God bless them that they

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still have the ability to bring in those brand new

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employees from whatever company that is that they're affiliated with,

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and even in the onboarding of those new employees for

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XYZ the company, now we can actually sign them up

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as a member of the credit union and then try

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and deepen that relationship from there. So I think they've

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still got that value in the marketplace. But there's less

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and less of those SEG based credit unions as well.

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If they were too small or can't necessarily grow, they

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may end up merging with or larger credit unions. And

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there's not a lot of new SEG based credit unis

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that are being established in our marketplace, not like there

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was fifty years ago or eighty years ago.

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As a case, maybe.

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Great point too, and SEG based strategy is a great strategy,

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and it worked for credit unions for a very very

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long time, and still in a sense does. But you

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think about the seg base, whether it's this electrical union

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or this other type of utility, utility or something of

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that nature, that is more of a dying breed right there.

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Unions have become much less in the US that they

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were fifty or so years ago. That if that is

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your sole strategy getting growth from a membership perspective. And

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then going back to my my prior point, if you're

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going to go sit at someone's place of employment and

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offer we have this depository account that yields X y

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Z or all of these different things that come with

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your checking account. Am I going to up and leave

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my primary financial institution because Barry Lynn is sitting at

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my workplace and here's all these attractive offers. Probably not true.

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And I think it is a lot easier too. I mean,

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Barry you kind of called it out like you may

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not want to have all of your kind of share

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a wallet at one place anymore. It's easy enough now

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to have multiple apps on your phone. They all instantly

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log in when you with your face when you look

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at them. It's not like you really have to manage

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multiple relationships per se if you don't want to, because

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you can just open a couple apps. They are all

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grouped together in a banking folder on your phone, and

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it's not the friction's not there for the consumer.

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So and it's now easy. If I have three different

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depository accounts across three different credit unions, and I want

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to transfer from Credit Union AD to Credit Union C

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for whatever's going on in my life, that fast, right.

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Sure, great point. You don't have to drive to three

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different branches.

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Right, yeah, exactly, or wait on mailing a check in

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the most case. So that's actually a good kind of

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gets into the next thing I want to talk about

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is just the value then those fintech partnerships. So a

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lot of that that you know, credit Union to credit

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Union or bank to bank transfers facilitated through various kind

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of open banking tools that have developed over the years.

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How can fintech partnerships help drive that member retention and

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drive that attraction and awareness of credit unions?

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Well, I think the number one is that at the

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front end most credit unions they don't have the tech

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stack or the resource to support these digital experiences. That

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everyone wants today, right, they have it, but it's a

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clunky type of experience. So I think having fintech partnerships

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offer the digital experience, offer the journey, whatever you want

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to call it. They're going to have to partner with

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FinTechs to deliver that. Now. On the back end, I

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think FinTechs can also help with creating more core members

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or deepen those member relationships because they came through their

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channel with this you know, for lack of a better term,

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sexy experience that the borrow or borrow or the member

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kind of remembers that right, and then they're going to

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stick with them and potentially be a PFI type of member.

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Yeah, that first experience is so important, I think. And

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if you're partnering with the fintech that has a really

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rich and easy to handle a first impression on a

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digital platform, what a great introduction to the crediting that

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is now that members expectations now are high that you're

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going to have the same sort of a rich digital

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proposition that your fintech partner has, So you know, if anything,

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it sort of makes everyone have to step up their

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game a little bit in terms of that user experience,

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the clunkiness of moving from sort of once to another

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if it's on isso for example, I'm going back to

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my old crediting days where we want to own that

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whole experience for that member digitally, but it was so

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hard to do it if you didn't have the ability

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to do Sso between different systems.

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And so on all of our listeners, I'm sure in

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both of you there's this idea and true in a

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lot of ways. I think founded by a lot of

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reality that indirect lending does not lead to long term numbers,

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and that that's a kind of a transaction, and then

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it's hard, if not impossible, to build that. And according

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to a Pinwheel study earlier this year, seventy percent of

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newly open accounts go inactive in the first ninety days,

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so seventy percent. So you're spending the time and money

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and you know KYC to open up that account and

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then it goes inactive without kind of an anchor option.

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And I think part of that is the difficulty of

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doing things like switching direct deposits, switching bill pay and

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that just inertia that people have a lot to do,

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and that's kind of the last thing on their list.

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So how do you think about that, How do you

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think about this kind of indirect lending. Get this new consumer,

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get this new member, and drive it to become even

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if not maybe like the full wallet share like part

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of that and getting a meaningful part that makes that

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a more economically attractive new member.

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I've heard that very I'm sure you've heard that same

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concept of getting an indirect member to become a core

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member or a primary financial institution is something that just

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can't happen. And I'm going to disagree with that, and

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reason because is you have multiple credit unions that play

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in the indirect space. They're very good at driving automobile

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loans to their balance sheet right, and they're getting a member.

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But the consumer at the time of being at a

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dealership cares about one thing, and it's driving the vehicle

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off the lot that day, and at most times probably

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not favorable conditions as it relates to APR for probably

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the payments a little bit out of their general sense

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of what they wanted to do there. But what happens

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on the back end, I think is what separates this

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actually coming to fruition. Without naming names, we have a

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lending partner that we partner with here at Upstart, that

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is seeing about a ten to fifteen percent conversion rate

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on their indirect side because of the amount of touches

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they're doing after the auto loan comes on to their

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balance sheet. And I don't know if that's a secret

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sauce of on the day, three day, seven day fifteen.

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And then another thing that is attractive is you have

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to incent them just because the institution provides an apy

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of X or you're able to use your debit card

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at wherever you want for free. If you have some

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form of an incentive, then bringing in those members to

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become core members and not having them close their account

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out within ninety ninety days that you alluded to, you're

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going to see higher conversion rates.

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Yeah. I think incentive incentives are really important, and I like,

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if you would look at my personal wallet, I have

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more probably a higher number of credit cards that you

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would think I would because I love incentives. I've got

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an Amazon Prime one, I use my American Express for travel.

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I have very fit for purpose cards that I use

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for very specific things. Or maybe I get a six

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month no interest on this and then I'll pay it

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off before that time. So like those things are for

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people who want to use those rewards, those can be

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super beatingful.

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Sorry you mentioned about onboarding. So multiple touch points through

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probably multiple different methods, right, Some might be an email,

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some might be a text, some might be you know,

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an actual letter that shows up in someone's mail. It

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mighte be a phone call depending on all the above.

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And then to take it even a step further is

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just because Linn walks into a dealership and buys a

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specific type of vehicle and Barry walks into a different dealership,

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there's different personas everyone's at a different stage in their life.

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You have to take it a deep step further and

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have different campaigns, different touch points, different touch points, But

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what is your incentive offering to the person at that

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point in time in their life. And there's so much

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data that's your fingertips that you're able to create the

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messaging around that point in their life, whether it's through

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looking through their credit reporting agency, you're able to see

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the income kind of based on everything that's come through

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from underwriting perspective to tailor your messaging to become or

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to get people to become more core members.

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I'm going to take your seventy percent stat and I'll

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turn it around, say, how about thirty percent actually don't

241
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close your account or aren't inactive in the first ninety

242
00:12:26.000 --> 00:12:29.080
days anyone go fishing before. I mean, if you've got

243
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thirty percent of your cast had some sort of a bite,

244
00:12:31.840 --> 00:12:33.559
you'd be out there every day. Right, I quit my

245
00:12:33.639 --> 00:12:35.960
job and just be a full time fishing So you know,

246
00:12:36.000 --> 00:12:38.679
there's an opportunity there that I think is somewhat lost.

247
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We tend to focus.

248
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On the negatives of it, of all ninety percent or

249
00:12:42.840 --> 00:12:44.919
never going to be Well, what about that ten or

250
00:12:44.919 --> 00:12:47.919
twenty or thirty you know, ten to fifteen percent? It

251
00:12:48.000 --> 00:12:50.840
is a lot, It really is and can be meaningful.

252
00:12:50.879 --> 00:12:53.360
So part of that is the cost of doing business.

253
00:12:53.399 --> 00:12:54.960
You know you're going to cast out and you're not

254
00:12:55.000 --> 00:12:57.840
going to get any bites at all, Okay, but you

255
00:12:57.919 --> 00:13:00.000
will get at least in this case, ten to fifteen percent.

256
00:13:01.360 --> 00:13:04.200
One of my credit unis that I led We actually

257
00:13:04.200 --> 00:13:07.080
had about a thirty percent take up rate on the

258
00:13:07.120 --> 00:13:10.679
second or third product or service on an indirect auto relationship.

259
00:13:10.720 --> 00:13:13.720
Now that was with This was ten fifteen years ago

260
00:13:13.720 --> 00:13:16.320
when people still answered their phones, So you know, we

261
00:13:16.320 --> 00:13:18.960
could we would be calls right and we would make

262
00:13:19.000 --> 00:13:22.519
outbound calls. And it was local because there were local

263
00:13:22.759 --> 00:13:25.279
auto dealers kind of up and down close to you know,

264
00:13:25.320 --> 00:13:27.519
within like a three or five mile radius of where

265
00:13:27.600 --> 00:13:30.240
branches were, and they're like, oh, yeah, we know your

266
00:13:30.279 --> 00:13:32.720
credit union. We see your signs all over town all

267
00:13:32.759 --> 00:13:35.240
the time, and oh okay, oh you've got this offer.

268
00:13:35.320 --> 00:13:37.120
So it had to have an incentive behind it. It

269
00:13:37.159 --> 00:13:39.159
wasn't just yeah, I'm going to open a checking account

270
00:13:39.159 --> 00:13:40.919
just because you're down the street. It was all open

271
00:13:40.960 --> 00:13:42.799
a check account because I'm going to get that two

272
00:13:42.879 --> 00:13:44.840
hundred dollars bonus, or I'm going to get you know,

273
00:13:44.960 --> 00:13:48.279
maybe a discount on my on my auto loan for

274
00:13:48.360 --> 00:13:50.440
auto pay things like that. So there was a compelling

275
00:13:50.519 --> 00:13:54.279
reason to do it. But I think we need to

276
00:13:54.279 --> 00:13:56.240
focus I think creditings you need to focus on sort

277
00:13:56.240 --> 00:13:58.679
of the positive aspects of this and be a little

278
00:13:58.679 --> 00:14:00.960
more optimistic. Now I'm always a gold last half full guy,

279
00:14:01.120 --> 00:14:04.519
but you know, I think maybe our marketing teams it

280
00:14:04.559 --> 00:14:08.919
can be it can feel like it's it's it's a

281
00:14:08.960 --> 00:14:12.320
really hard uphill climb, especially if you're just not gain

282
00:14:12.399 --> 00:14:14.759
a whole lot of take up, then maybe try something

283
00:14:14.799 --> 00:14:17.279
different you know, try a different incentive, try a different

284
00:14:17.320 --> 00:14:20.080
method to try and get that second or third product.

285
00:14:19.960 --> 00:14:23.720
And understand of that thirty percent, why did they stay

286
00:14:23.759 --> 00:14:27.919
with you? Are they transactional? Are they exploring other product

287
00:14:27.960 --> 00:14:30.639
offerings that you are sending them, or just organically coming

288
00:14:30.639 --> 00:14:34.919
to your site and researching refinance of a mortgage or

289
00:14:35.000 --> 00:14:37.960
a credit card, like you have your fingertips at being

290
00:14:38.000 --> 00:14:39.320
able to access all of that data.

291
00:14:39.440 --> 00:14:42.480
Yeah, I think we're going to get bury some upstart

292
00:14:42.559 --> 00:14:45.840
branded trut waiters to for your next I'm all.

293
00:14:45.759 --> 00:14:46.799
Fortunate for you.

294
00:14:47.000 --> 00:14:49.519
Are you a ten percent or less or ten percent

295
00:14:49.559 --> 00:14:51.120
or higher fisherman?

296
00:14:52.159 --> 00:14:52.679
No comment?

297
00:14:55.120 --> 00:14:58.039
Now, I think I think the personalization pieces is really

298
00:14:58.159 --> 00:15:02.080
interesting to think about and and you know, getting very

299
00:15:02.120 --> 00:15:05.000
specific on what those offers are, but also brand awareness

300
00:15:05.080 --> 00:15:08.639
and that AI tools of course can drive that hyper personalization.

301
00:15:09.879 --> 00:15:12.200
So you know what, do you think some other uh

302
00:15:12.440 --> 00:15:15.519
maybe ideas are around how both credit unions can can

303
00:15:15.639 --> 00:15:19.080
use that personalization to target members and really build that

304
00:15:19.480 --> 00:15:22.919
member loyalty, like really drive that from being a transactional

305
00:15:23.080 --> 00:15:26.799
one product to having a more kind of multi product,

306
00:15:26.919 --> 00:15:28.639
longer term relationship with a new member.

307
00:15:28.720 --> 00:15:30.919
Yeah, I'll go back to the SEG comment before and

308
00:15:31.000 --> 00:15:33.840
lean into that. And you know, if you're if you're

309
00:15:33.879 --> 00:15:36.759
primarily a SEG based credit union, you've got some community

310
00:15:37.440 --> 00:15:40.080
aspect to your membership, your field of membership. That's okay,

311
00:15:40.120 --> 00:15:43.879
but lean into that heritage of that company you have.

312
00:15:44.320 --> 00:15:46.720
And if you're just purely more of a community based

313
00:15:46.960 --> 00:15:50.679
UH or organizational institution, then you're going to have to

314
00:15:50.720 --> 00:15:54.080
find something that's going to be meaningful and compelling for

315
00:15:54.159 --> 00:15:57.480
those new members. So how did how these members come

316
00:15:57.519 --> 00:15:59.080
to us? Was it through some sort of a digital

317
00:15:59.120 --> 00:16:02.639
channel purely? Well, then there's a connotation there that I'm

318
00:16:02.679 --> 00:16:06.600
probably they're probably going to want to transact with you digitally,

319
00:16:06.799 --> 00:16:10.600
and so sending a letter to their home may not

320
00:16:10.679 --> 00:16:14.159
necessarily work because they're all digital, right, and in a

321
00:16:14.240 --> 00:16:17.080
text that that member is probably going to be more

322
00:16:17.080 --> 00:16:20.720
amenable to. That's sort of an approach than another one.

323
00:16:20.759 --> 00:16:22.399
What do you think, duth I'm going to.

324
00:16:22.440 --> 00:16:25.240
Go a different direction here and be of course biased

325
00:16:25.440 --> 00:16:29.559
it's being an upstart hosted podcast, but you think about

326
00:16:29.600 --> 00:16:31.279
what I was talking about a little bit ago, is

327
00:16:32.879 --> 00:16:35.320
the person is coming to a dealership to get a vehicle.

328
00:16:35.360 --> 00:16:37.879
That's all they care about. If you don't have anything

329
00:16:37.960 --> 00:16:41.399
overlaid in that experience that gives them the incentive to

330
00:16:41.480 --> 00:16:44.799
become a more core member to your credit union, then

331
00:16:44.840 --> 00:16:46.840
they're going to probably drop off and be a part

332
00:16:46.879 --> 00:16:49.559
of that thirty percent that you're talking about. So if

333
00:16:49.600 --> 00:16:51.639
you're able to I don't know how you solve this

334
00:16:51.720 --> 00:16:54.919
in the dealership, but have your incentive offering in front

335
00:16:54.919 --> 00:16:58.200
of the member while they're in the in the dealership,

336
00:16:58.639 --> 00:17:00.600
the conversion ratio is probably going to go up.

337
00:17:00.679 --> 00:17:05.200
Right, incentive is rate sort of win exactly.

338
00:17:05.240 --> 00:17:07.559
But at the end of the day, they don't care

339
00:17:07.599 --> 00:17:10.279
about their rate, right, they care about driving the vehicle

340
00:17:10.279 --> 00:17:12.359
off the lot and they want to get it home

341
00:17:12.440 --> 00:17:14.720
and then they'll they'll figure out they'll figure out all

342
00:17:14.759 --> 00:17:16.920
of the rest later. But if there was some type

343
00:17:16.960 --> 00:17:20.000
of incentive in the dealership of I mean, we've all

344
00:17:20.039 --> 00:17:22.880
sat there. You qualify for membership with X y Z

345
00:17:23.000 --> 00:17:26.440
credit Union, they approve you. If you were able to

346
00:17:26.440 --> 00:17:29.039
show some type of an incentive in that exact same experience,

347
00:17:29.279 --> 00:17:32.359
that might trigger them to think, you know what, I

348
00:17:33.160 --> 00:17:35.359
might want to check this out. And if the offering

349
00:17:35.440 --> 00:17:37.799
is rich enough, then it makes even more sense. So

350
00:17:38.200 --> 00:17:40.680
why I say all of this is we've seen. We

351
00:17:40.720 --> 00:17:43.720
actually offer something at upstart called member cross sell. Both

352
00:17:43.759 --> 00:17:45.759
of you of course know about member cross sell. Is

353
00:17:45.799 --> 00:17:49.680
we have a similar flow, not for indirect channels, but

354
00:17:50.519 --> 00:17:52.839
our an applicant comes to upstart dot com, goes through

355
00:17:52.880 --> 00:17:56.960
their personal loan, auto refinance and or helock experience, and

356
00:17:57.039 --> 00:18:00.880
we partner these individuals with our lending part partners. We

357
00:18:00.960 --> 00:18:04.240
have now been able to overlay this cross sell perspective

358
00:18:04.319 --> 00:18:08.680
called member cross seal with our credit union partners, creating

359
00:18:08.720 --> 00:18:12.079
the messaging, creating the incentive based on personas and things

360
00:18:12.119 --> 00:18:15.319
of that nature, that while they're captured in the experience

361
00:18:15.400 --> 00:18:18.559
right now, they are able to see an offering that

362
00:18:18.559 --> 00:18:21.720
could help increase conversions. So again going back to they

363
00:18:21.799 --> 00:18:24.599
came into the upstar platform caring about a personal auto

364
00:18:24.680 --> 00:18:27.359
or helock loan, but also at the back end, you're

365
00:18:27.359 --> 00:18:30.200
now being presented a specific type of offering and it's

366
00:18:30.279 --> 00:18:32.799
right there when they need money the most.

367
00:18:32.880 --> 00:18:34.960
And I think about over you know, the course of

368
00:18:35.039 --> 00:18:39.680
kind of my adult lifetime, like in banking for for decades,

369
00:18:39.799 --> 00:18:41.759
I think the only time that that's ever that sort

370
00:18:41.759 --> 00:18:45.319
of offers been presented to me very infrequently, So I

371
00:18:45.359 --> 00:18:46.799
think you just don't see it a lot. I think

372
00:18:47.160 --> 00:18:50.000
years ago, or you know, mortgages get sold all the time,

373
00:18:50.039 --> 00:18:53.039
and our mortgage got sold to a new bank, and

374
00:18:53.079 --> 00:18:55.720
then immediately I received a credit card offer and I

375
00:18:55.759 --> 00:18:57.400
took it because I said, okay, you know, I'll do

376
00:18:57.440 --> 00:18:59.440
the credit card. I'll open it and keep it there.

377
00:18:59.680 --> 00:19:01.839
And I'm not even sure. I think I maybe used

378
00:19:01.839 --> 00:19:04.000
it a little bit, but I can think about that.

379
00:19:04.039 --> 00:19:06.440
And that was probably fifteen years ago. So it's like,

380
00:19:06.480 --> 00:19:09.119
how often do those things are people even trying? And

381
00:19:09.119 --> 00:19:11.400
I think buried to your point, if you don't need

382
00:19:11.440 --> 00:19:13.440
to get seventy percent of them, can you get a

383
00:19:13.519 --> 00:19:16.720
meaningful ten to fifteen percent? Can you make the economics

384
00:19:16.759 --> 00:19:20.839
work of what you're offering versus the conversion? So I

385
00:19:20.880 --> 00:19:23.400
think you know, as you then, you know, how do

386
00:19:23.480 --> 00:19:26.160
we think about credit unions being able to measure success

387
00:19:27.000 --> 00:19:29.720
beyond the loan origination? Like how would you advise them

388
00:19:29.759 --> 00:19:33.599
to think about like what makes member cross sell effective?

389
00:19:33.720 --> 00:19:38.599
What makes it like economically viable and important for spending

390
00:19:38.640 --> 00:19:40.160
time and resources on things like that.

391
00:19:40.400 --> 00:19:44.960
Yeah, some credit unions have great profitability metrics internally and

392
00:19:45.079 --> 00:19:47.960
can sort of make that connection between that new auto

393
00:19:48.000 --> 00:19:52.920
loan the next most probable product is this or deeping.

394
00:19:52.960 --> 00:19:57.599
This relationship is predicated on gain. Maybe the digital platform

395
00:19:57.640 --> 00:19:58.039
gained them.

396
00:19:58.119 --> 00:19:58.799
Register for that.

397
00:20:00.000 --> 00:20:01.440
And then part of it is how do you make

398
00:20:01.480 --> 00:20:04.119
it easy for them? So I can send you a

399
00:20:04.200 --> 00:20:08.480
letter and say, you know, click a part of me.

400
00:20:08.480 --> 00:20:11.400
You use the QR code to get to a rich

401
00:20:11.440 --> 00:20:14.319
solution as opposed to you here, sign this and mail

402
00:20:14.319 --> 00:20:16.519
it back just in my self address stamp envelope. I mean,

403
00:20:16.559 --> 00:20:18.799
it's very nineteen ninety eight to do it that way,

404
00:20:18.920 --> 00:20:22.839
and that just doesn't work anymore. So if you've got

405
00:20:22.880 --> 00:20:26.960
those profitability metrics, then I think that that would help

406
00:20:27.000 --> 00:20:30.000
you sort of figure out again use efficient analogy. Am

407
00:20:30.039 --> 00:20:31.680
I going to cast over here? Am I going to

408
00:20:31.720 --> 00:20:33.680
cast over here? Where do I think there may be

409
00:20:33.880 --> 00:20:35.559
a bare chance of actually catching?

410
00:20:35.960 --> 00:20:39.759
I think each institution is going to have different measurement

411
00:20:39.799 --> 00:20:43.079
of success. It could be one additional product. But of

412
00:20:43.119 --> 00:20:46.720
that one additional product, which one makes that person more

413
00:20:47.559 --> 00:20:51.000
ingrained in transacting with your credit union? It could be mortgaged.

414
00:20:51.039 --> 00:20:54.400
It's probably pretty hard to get a mortgage refinance current state,

415
00:20:54.599 --> 00:20:57.240
the current state, but if you're able to get something

416
00:20:57.279 --> 00:21:00.720
that is part of their livelihood, that is going to

417
00:21:00.839 --> 00:21:03.519
keep them with you. That's probably going to be the

418
00:21:03.799 --> 00:21:05.039
largest measurement of success.

419
00:21:05.119 --> 00:21:06.720
And I do think. I mean, we talked about mobile

420
00:21:06.880 --> 00:21:09.599
wallet and kind of share share or mobile apps and

421
00:21:09.599 --> 00:21:13.519
share wallet, Like a lot of the technology is getting

422
00:21:13.559 --> 00:21:18.039
very similar, so like they're maybe not very differentiated between functionality,

423
00:21:18.119 --> 00:21:21.039
Like you kind of expect certain things to always happen

424
00:21:21.119 --> 00:21:23.960
digitally now and when you encounter like the paper scenario,

425
00:21:23.960 --> 00:21:26.799
which you do still encounter sometimes it is a negative experience.

426
00:21:26.920 --> 00:21:30.920
So you know, how how has that like just kind

427
00:21:30.920 --> 00:21:35.880
of changing expectations force credit unions to be able to

428
00:21:36.119 --> 00:21:39.000
compete and to change their strategies there.

429
00:21:38.839 --> 00:21:42.240
Credit unions, no matter if they're large and or smaller

430
00:21:42.440 --> 00:21:45.519
in nature from an asset size, they're not ever going

431
00:21:45.559 --> 00:21:48.480
to be able to compete with Chase Bank or Wells

432
00:21:48.519 --> 00:21:51.559
Fargo or Bank of America and all these large institutions

433
00:21:51.720 --> 00:21:54.519
or even the smaller credit unions you're talking about billion

434
00:21:54.519 --> 00:21:57.200
dollar asset size competing with the four and five billion

435
00:21:57.200 --> 00:21:59.680
dollar asset size. You're going to have to partner in

436
00:21:59.720 --> 00:22:01.400
some aspect to be able to do.

437
00:22:01.359 --> 00:22:02.680
That right and make sure it works.

438
00:22:03.359 --> 00:22:07.240
Like how often do you get frustrated by a bad

439
00:22:07.279 --> 00:22:10.400
log in or password or a password or a forced password

440
00:22:10.440 --> 00:22:14.119
reset or two factor authentication that doesn't necessarily work all

441
00:22:14.160 --> 00:22:17.200
the time. Things like this are things are going to

442
00:22:17.200 --> 00:22:21.119
dissuade a new member, a brand new member, who's who's

443
00:22:21.319 --> 00:22:24.559
looking at you for perhaps that next product. If there's

444
00:22:24.559 --> 00:22:27.799
some aspect of that relationship with pard of me, some

445
00:22:27.880 --> 00:22:30.480
aspect of that experience, it's not really going to work

446
00:22:30.480 --> 00:22:30.799
for them.

447
00:22:30.960 --> 00:22:31.880
You're never going to get them.

448
00:22:31.880 --> 00:22:34.960
No, Yeah, So like just reducing friction as much as possible,

449
00:22:35.000 --> 00:22:38.559
make it easy, make it a nice experience, delight delight them,

450
00:22:38.680 --> 00:22:43.359
don't make them annoyed going through. Well, if this episode

451
00:22:43.400 --> 00:22:46.519
helped you rethink membership strategy, subscribe to the show on

452
00:22:46.559 --> 00:22:49.279
YouTube and you can watch full video versions and bonus

453
00:22:49.279 --> 00:22:52.079
clips you won't hear anywhere else. All Right, it is

454
00:22:52.160 --> 00:22:55.559
time for fact and fiction. So we're breaking down real

455
00:22:55.599 --> 00:22:58.519
opinions on the industry, deciding if we are on board

456
00:22:58.599 --> 00:23:01.519
or not. So, first one, we talked a lot about

457
00:23:01.559 --> 00:23:06.440
this about the customer experience factor. Fiction. Onboarding is the

458
00:23:06.480 --> 00:23:08.759
single most important member touch point.

459
00:23:09.039 --> 00:23:14.279
Fact, fact, wholeheartedly fact. This is your first impression, for

460
00:23:14.319 --> 00:23:17.880
a first impression, So and maybe it's not first impression.

461
00:23:17.960 --> 00:23:21.799
Drew talked before about an indirector auto relationship, So really

462
00:23:21.839 --> 00:23:25.119
that first impression was with the finance manager, not necessarily

463
00:23:25.160 --> 00:23:28.440
with the credit union, the financial institution. So this is

464
00:23:28.599 --> 00:23:33.079
my first, my first foray into providing you what we

465
00:23:33.119 --> 00:23:35.799
are all about and how we are going to help

466
00:23:35.839 --> 00:23:37.920
you and support you in your financial journey, whatever that

467
00:23:38.000 --> 00:23:40.799
may be. So this is very very important, not just

468
00:23:41.359 --> 00:23:44.200
the message that I give, but the method in which

469
00:23:44.200 --> 00:23:49.200
I deliver it. And am I putting am I putting

470
00:23:49.200 --> 00:23:51.240
expectations out there that I can actually follow up on

471
00:23:51.359 --> 00:23:54.200
that I can actually meet. So set that high expectation,

472
00:23:54.279 --> 00:23:55.559
but also be sure that you can meet that.

473
00:23:55.759 --> 00:23:59.000
And it's not your first one. It has to stay ongoing, right,

474
00:24:00.079 --> 00:24:03.000
probably going to drop off from an interest perspective within

475
00:24:03.079 --> 00:24:05.400
the first thirty to forty five days if you're not

476
00:24:05.599 --> 00:24:08.920
messaging to them on an ongoing cadence and you think

477
00:24:08.960 --> 00:24:12.880
about the first real look into your your organization is

478
00:24:13.079 --> 00:24:15.359
probably going to be pretty standard across the board for

479
00:24:15.400 --> 00:24:17.759
all new members. But then how do you tailor that

480
00:24:17.799 --> 00:24:22.680
messaging to be more in benefit or more diverse compared

481
00:24:22.720 --> 00:24:24.599
to what they would get from others to get them

482
00:24:24.599 --> 00:24:25.759
to be attractive.

483
00:24:25.279 --> 00:24:25.880
To stick with you.

484
00:24:26.000 --> 00:24:29.039
Yeah, and I think that that welcome and that like

485
00:24:29.119 --> 00:24:34.480
the early days, building that relationship building that even brand awareness.

486
00:24:34.519 --> 00:24:38.680
So does brand trust matter more than rate competitiveness?

487
00:24:38.960 --> 00:24:41.680
I wish this was fact, but I do think it's fiction.

488
00:24:41.880 --> 00:24:44.759
And the reason for that is, if I want to

489
00:24:44.799 --> 00:24:47.839
find the best CD rate in my market, it's very

490
00:24:47.839 --> 00:24:49.680
easy for me to find that with the simple Google

491
00:24:49.720 --> 00:24:51.480
search of bankrate dot com or some of the others

492
00:24:51.480 --> 00:24:52.119
that are out there.

493
00:24:52.279 --> 00:24:52.440
Now.

494
00:24:52.480 --> 00:24:56.200
Where the brand trust can come in is if the

495
00:24:56.240 --> 00:24:58.240
brand has some if the Credit Union has some sort

496
00:24:58.240 --> 00:25:01.559
of a relationship management where I've got other products and

497
00:25:01.599 --> 00:25:03.279
I want a CD and you're going to give me

498
00:25:03.480 --> 00:25:06.240
twenty five basis points more than the prevailing rate on

499
00:25:06.279 --> 00:25:10.240
whatever this term of CD is. Now, there's there's value

500
00:25:10.279 --> 00:25:13.400
in me staying with that brand. So I think the

501
00:25:13.440 --> 00:25:16.160
more that Credit Unis can lean into the relationship management

502
00:25:16.240 --> 00:25:18.880
aspects of it, that's one way to sort of building

503
00:25:20.160 --> 00:25:21.759
building those those memory relationships.

504
00:25:21.920 --> 00:25:23.680
You know, we talked a lot about that, you know,

505
00:25:23.759 --> 00:25:26.640
welcoming the new member, like delighting them, that kind of

506
00:25:26.680 --> 00:25:31.000
onboarding experience. But how much does brand trust matter? Does

507
00:25:31.039 --> 00:25:33.680
that brand trust and recognition, does that matter more? Than

508
00:25:33.720 --> 00:25:34.880
rate competitiveness.

509
00:25:35.279 --> 00:25:38.160
I mean, I wish that the brand trust meant more

510
00:25:38.400 --> 00:25:41.240
than rate competitiveness. But the reality is, with a simple

511
00:25:41.240 --> 00:25:44.920
Google search, I can, for example, find the best CD

512
00:25:45.039 --> 00:25:48.920
rate in my marketplace, and it may not necessarily be

513
00:25:49.079 --> 00:25:52.279
with my institution, my primary or my credit union.

514
00:25:52.319 --> 00:25:53.920
All Right, so we talked a lot about, you know,

515
00:25:54.000 --> 00:25:58.920
this idea of delightful member experience, making onboarding feel good.

516
00:25:58.680 --> 00:26:01.960
But how much does brand and trust matter and does

517
00:26:02.000 --> 00:26:04.119
it matter more than rate competitiveness.

518
00:26:04.240 --> 00:26:07.440
I mean, I wish brand trust was the fact, but

519
00:26:07.559 --> 00:26:12.160
in reality, rate competitiveness is more of the fact. Nowadays,

520
00:26:12.319 --> 00:26:14.960
it's so easy to find, say, the best CD rate

521
00:26:15.200 --> 00:26:18.400
in your marketplace with a simple Google search. Now where

522
00:26:18.440 --> 00:26:21.359
this becomes meaningful from a brand trust perspective is if

523
00:26:21.400 --> 00:26:23.519
your credit union has some sort of a relationship management

524
00:26:23.960 --> 00:26:29.319
program where okay, here's our stock CD rate for this

525
00:26:29.400 --> 00:26:32.160
certain term, but because you're already a member, or because

526
00:26:32.160 --> 00:26:33.839
you've got a certain relationship with us with so many

527
00:26:33.880 --> 00:26:37.039
prouty services, we'll give you twenty five basis points more.

528
00:26:37.319 --> 00:26:40.400
Now that becomes meaningful for me, and now actually keeps

529
00:26:40.440 --> 00:26:42.119
that money with the credit union as supposed to going

530
00:26:42.160 --> 00:26:44.880
somewhere else. I think that's where credit unions can win

531
00:26:44.960 --> 00:26:47.480
by lean into that relationship management perspective.

532
00:26:47.160 --> 00:26:48.720
And they have to. I mean, you think about brand

533
00:26:48.720 --> 00:26:52.839
awareness as it relates to credit unions. The knowing of

534
00:26:52.960 --> 00:26:55.400
the brand of the multitude of credit unions across the

535
00:26:55.519 --> 00:26:57.880
US is not something they're ever really going to know.

536
00:26:58.519 --> 00:27:01.680
You see Chase Bank that we've talked about it already

537
00:27:01.359 --> 00:27:04.119
there they're blasted all over every single building, every single

538
00:27:04.160 --> 00:27:07.880
commercial Credit unions aren't able to put the cost perspective

539
00:27:07.920 --> 00:27:09.720
out there to build the brand awareness. So you're going

540
00:27:09.799 --> 00:27:12.559
to have to, of course lead with the relationship.

541
00:27:12.200 --> 00:27:14.359
Right And I'll turn this around a little bit because personally,

542
00:27:14.480 --> 00:27:18.000
I was looking for the best CD rate in my marketplace.

543
00:27:18.000 --> 00:27:20.519
I'm in southern California. Well guess what it turned out

544
00:27:20.519 --> 00:27:22.039
to be with a credit union that I was not

545
00:27:22.160 --> 00:27:24.319
a member of. Now I'm a member of, and now

546
00:27:24.359 --> 00:27:28.960
I'm getting their marketing messages. They're sending me offers for

547
00:27:29.039 --> 00:27:31.960
heelock and so on and things that I'm now considering them.

548
00:27:32.000 --> 00:27:34.720
I haven't taken that second proctice service yet, but there's

549
00:27:34.839 --> 00:27:38.200
nothing in that relationship so far that has told me

550
00:27:38.279 --> 00:27:40.279
I'm never dealing with these guys anymore. I mean, so

551
00:27:40.559 --> 00:27:43.759
it was a really good introduction for a brand new

552
00:27:43.799 --> 00:27:47.640
member who now has the potential to become a more

553
00:27:47.720 --> 00:27:48.319
valuable member.

554
00:27:48.359 --> 00:27:50.759
For that got you thinking, absolutely true, And.

555
00:27:50.720 --> 00:27:53.000
I think that that actually kind of leads perfectly into

556
00:27:53.000 --> 00:27:57.759
the last factor fiction. I wanted to raise credit unions

557
00:27:57.759 --> 00:28:00.559
focus on retention over at acquisition.

558
00:28:00.880 --> 00:28:07.839
Yes, I wouldn't even deem this as fact and or fiction.

559
00:28:07.920 --> 00:28:09.880
I'll just kind of give a scenario. You want to,

560
00:28:09.920 --> 00:28:14.279
of course, keep your existing member base. The credit union

561
00:28:14.359 --> 00:28:17.759
member base has been well if mid fifties, low fifties,

562
00:28:18.039 --> 00:28:20.720
it's kind of a dying breed as it relates to

563
00:28:20.799 --> 00:28:22.480
more members coming in, so you want to be able

564
00:28:22.480 --> 00:28:26.359
to retain them. But then from the acquisition perspective, the

565
00:28:26.440 --> 00:28:30.079
cost to acquire these individuals is very, very high. And

566
00:28:30.119 --> 00:28:32.079
if you're paying I don't know what the dollar amount

567
00:28:32.200 --> 00:28:34.359
is to acquire a new member through an indirect channel,

568
00:28:34.920 --> 00:28:37.240
and if they don't become a sticky member, if you're

569
00:28:37.279 --> 00:28:41.039
putting all of your resource towards retaining, it's probably better

570
00:28:41.039 --> 00:28:43.160
for the overall the income statement.

571
00:28:43.279 --> 00:28:45.839
Yeah, and you're right, that cost is very depending on

572
00:28:45.880 --> 00:28:48.640
the channel which you're acquiring those new members. From you

573
00:28:48.720 --> 00:28:50.960
better make sure those members are coming in though, yeah,

574
00:28:51.079 --> 00:28:54.279
once are actually desirable for you. And what I mean

575
00:28:54.319 --> 00:28:57.559
by that is if it's just purely transactional and you

576
00:28:57.640 --> 00:29:00.000
know you've just got this one product for a certain

577
00:29:00.000 --> 00:29:02.759
period of time, you better make sure that your expense

578
00:29:02.839 --> 00:29:05.200
base on that is low enough that you're going to

579
00:29:05.240 --> 00:29:08.119
realize some sort of a profit off of that. Back

580
00:29:08.160 --> 00:29:10.440
in the day five six, seven years ago, two ninety

581
00:29:10.480 --> 00:29:12.559
nine auto loans for a brand new member coming in,

582
00:29:12.839 --> 00:29:14.519
we weren't making a whole lot off of that. I

583
00:29:14.599 --> 00:29:16.559
know that, you know, FED funds rates were low and

584
00:29:17.200 --> 00:29:18.920
margins were low and so, but that was a pretty

585
00:29:18.920 --> 00:29:23.400
skinny margin that even one little loss on that loan

586
00:29:24.519 --> 00:29:26.880
on an auto loan was really sort of turing that

587
00:29:27.039 --> 00:29:28.319
program economics subside down.

588
00:29:28.359 --> 00:29:30.759
You're probably paying more than you were earning an interesting come.

589
00:29:30.960 --> 00:29:32.920
I mean in some cases sure, yeah, so you're kind

590
00:29:32.920 --> 00:29:34.839
of offering that as like a loss leader to bring

591
00:29:34.880 --> 00:29:37.279
them in. And if then you don't get the conversion

592
00:29:37.319 --> 00:29:39.240
you want or you have higher losses, that's going to

593
00:29:39.240 --> 00:29:39.720
wipe the way.

594
00:29:39.759 --> 00:29:41.759
So on sale to sell potato chips, but maybe we

595
00:29:41.759 --> 00:29:44.640
weren't selling potato chips because we didn't have the flavor

596
00:29:44.640 --> 00:29:47.880
they liked, We didn't have the brand they liked. We

597
00:29:47.920 --> 00:29:50.480
didn't have You know, there was some reason that those

598
00:29:50.759 --> 00:29:53.680
that second or third product service wasn't really compelling enough

599
00:29:53.720 --> 00:29:54.319
for them.

600
00:29:54.640 --> 00:29:56.960
Thank you for watching, leaders lending, We'll see you next time.

601
00:30:01.279 --> 00:30:05.640
People to us people