It Starts With Checking….

Many credit unions are hoping that their members will use more of their products and services.  Quite a few have implemented cross-selling programs, offered discounted loan rates, and have tried other methods to help increase the all-important “services per member (or household)” ratio. Many credit unions have made great strides in increasing that ratio and are enjoying significant growth.

While this is good news, I would like to see more credit unions try to capture the members’ checking account as part of their cross-selling efforts.  Some credit unions have very low share draft (that’s the checking account for you non-credit union folks!) penetrations – 12%, 18%, 25%, etc.  Anyone who has experience in retail banking, credit unions, investments, etc. knows that the PRIMARY account for most people is the checking account.  There is substantial evidence and industry agreement on the old belief that a person’s primary financial institution is defined as the one that holds the checking account.  Think about it – credit card payments, loan payments, money for living expenses, mortgage payments, insurance, etc. – most of that money comes from a person’s checking account.

So why are some credit unions ignoring the importance of the checking account?  At a time when many banks are now charging their customers fees to even open or maintain a checking account with them or are implementing outrageous minimum balances, why aren’t more credit unions designing promotions around the all-important checking account?

When I ask this question of my credit union clients, here are a couple of answers that I hear most (and my usual response to them.)

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