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Credit unions, community banks engage but lose customers

Staff writer |
Community banks and credit unions have higher customer and member engagement than do national banks, according to Gallup.

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Though 52% of credit union members and 37% of community bank customers are fully engaged, that figure drops to 17% for national banks.

Community banks and credit unions have a much larger "halo" of customer and member engagement around them than bigger banks, Gallup data show. This halo seems to come from the interpersonal bonds smaller banks build with their customers.

These organizations have worked very hard - and, as the data show, very successfully - to help customers and members feel that they are valued and are getting personal attention.

In turn, this helps them see the bank as part of the community and builds a sense of group identity and pride among customers and members.

Despite their positive experiences, customers of community banks and credit unions go to bigger banks to meet their most significant financial needs. That's a problem.

Community banks and credit unions have done the hard work of building engagement, but their current definition of "good service" doesn't meet their customers' and members' needs and goals.

In failing to deepen their relationships with customers, these financial institutions are also failing to reap the benefits that come with engagement - and they're failing their customers or members, too.

In general, community banks and credit unions are right to believe that their efforts have paid off in engaged customers and members. But too often, those customers or members think of their banks or credit unions as merely hospitable places to store money.

They don't consider them trusted financial advisers. They go to big-money banks for big-money advice, such as retirement, insurance and investment products.

National banks may have a smaller percentage of engaged customers, on average, than community banks and credit unions do.

But they do just as well as, if not better than, community banks and credit unions in several product/service categories, and they have a significant edge for credit products.

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