Last week we were discussing the Open Source CU blog and how we got started. Thanks to the memory crutch that is Basecamp, we were able to find the internal post that kicked it all off. Here’s a peek into the beginning of OSCU and our vision for the industry:

Conversation with Doug [Williams] about CUES Session

I met Doug up at Starbucks last night to discuss the CUES session and work on the handouts. We had an AWESOME conversation about our vision for the CU industry and both left excited about the direction.

As I had mentioned before, my goal with our sessions at CUES isn’t to provide recommendations for making websites better or demonstrate how far behind CU’s are in the industry. My goal is to provide a unique, driving vision that will help credit unions create and implement an effective online strategy. I want to get them excited about the possibilities that are available if they “use the Internet effectively.”

Effective Use of the Internet: Revive the Community

At the beginning of the Credit Union Movement in the US, the movement took on the feel of a “Gospel Revival.” The founders did an amazing job of spreading the word about what credit unions were and why they should become members. Now, though, most people see credit unions as nothing more than a “type of bank” or a “bank alternative.” Credit unions talk about ways that they need to differentiate themselves, but the discussion almost always focuses on incremental improvements. The following is from CUES Skybox and was written by Henry Wirz, the President of Safe CU:

Credit unions should focus on how they will differentiate themselves from the other financial institutions. The trend has been for credit unions to move to community fields of membership and to offer a full line of service through most of the same delivery channels as banks. In addition credit unions are beginning to offer business services to small businesses. A “me too” strategy may not work. Credit unions need to offer members something different. I think some innovations that will differentiate credit unions are posting member direct deposits one day early, a form of negative float; guaranteeing members a closing date for their mortgage loan at the time of application; offering members a checking account with automatic reconciliation; helping members set up the bill-payer payee list; offering members analysis of their credit report and credit score.

Strategy and Tactics

I think that credit unions have a MUCH bigger opportunity to differentiate themselves. They should position themselves as a “trusted financial resource” and revive the sense of community that initially surrounded the credit union movement. In order to do this, they must increase communication, provide relevant content (information), and build trust by being knowledgeable and trustworthy. This is the strategy.

The tactics (implementation) is where technology (and hopefully Trabian) comes in.

Communication

The credit union leadership (CEO, board, of directors, etc.) should communicate DIRECTLY to the members, and including an article in the monthly newsletter or the annual report is not enough. This is where blogs would come in. Doug wasn’t very excited about the idea of blogs for credit unions when we first started talking, but after discussing the possibilities and defining the strategy that we want to present, he was fired up about it. This could be HUGE for removing layers of impersonality and opening the conversation with members.

Credit unions also need to enhance their internal communication, not just with other credit unions but within themselves. Many credit unions are spread over several branches, and most do a poor job of communicating. Doug had a good quote: “In a bad business, knowledge is stored within employees. In a good business, knowledge is stored within the business.” Chris has also mentioned several times the need for creating a “knowledge base” to share knowledge within HFCU. Increasing the amount of communication within a credit union and storing the knowledge created by the shared learning of the CU staff will help the CU present a coherent and consistent message to its members. It will help establish the CU as a trusted resource because the staff will provide informed answers to questions. If 2 different employees answer a question in 2 different ways, or if they don’t have an answer at all, then the CU will lose (or certainly not gain) credibility.

The technology used to facilitate internal communication will be internal blogs (think of how much Basecamp has helped us communicate internally and then consider how much more important it will be when we have 20 employees). The CU could then use a wiki (which is basically just a specialized CMS) or something similar to organize the shared knowledge of the staff.

We could also present the idea of forums to increase communication between members and to provide a place where members can initiate topics. Doug even mentioned the idea of allowing members to post their own vehicles for sale to other members. This would provide an additional opportunity for credit unions to offer their auto loan products.

Content

While communication is important, it means nothing if there’s no substance. It’s also meaningless if no record is kept of the communication. This is where the idea of relevant content comes in. CU leadership should provide relevant and interesting information to the members and the staff. Whether initially communicated through a blog, the annual report, or any other source, this content should be stored and presented in a meaningful way so that members and staff can continue to draw from it. I’m not proposing that every word out of a leader’s mouth should be recorded for posterity. What I am proposing, though, is that the content for a webpage about Auto Loans contain better content than “Loans for automobiles.” Also, as mentioned above, any knowledge communicated should be shared within the CU to help create a knowledgeable, consistent staff.

Building Trust

Credit unions will build trust by communicating helpful information to their members and continually demonstrating that everything they do is for the sake of their members’ financial benefit. Credit unions are not-for-profit institutions, but I doubt that many people see them in an altruistic light. By constantly serving as a source of beneficial communication and valuable content over a period of time, credit unions can build trust. Once the CU has built trust between itself and its members, it can offer (promote) its services and products much more effectively because the members will trust that they add real value to their financial situation. A credit union’s promotional strategy will focus less on “advertising” and more on “informing.”

Conclusion

When credit unions begin to build trust by communicating relevant content, they will do more than increase business and membership. They will Revive the Community.

This could be huge for us.