Better Customer Service Makes Credit Unions More Appealing

Credit Union Banking Software

Given that many banks have been hesitant to lend since the 2008 financial crisis, shadow bankers are filling in the gap, with retailers such as Costco and Home Depot offering loans to customers. Many customers are also turning to credit unions for loans, and the industry grew by 2 percent this past year. But some reports are also finding that customers are not only turning to credit unions for their lower rates and fees, but are also discovering better customer service, suggesting this “trend” may be here to stay.

Fox Business reported that during the first nine months of 2012, credit unions originated 60 percent more primary mortgages than during the same time period one year earlier. Demand was driven by many first-time buyers and young buyers, who are turning away from traditional banks.

Credit unions are also making changes to appeal to more customers. While in the past they were only for specific members of a community, such as county employees, many are now offering services to anyone affiliated with a region, such as a student, resident or employee.

At the same time, traditional banks can improve their own services by learning from the practices in place at many credit unions, especially with the help of customer management software. Credit unions are known for approving mortgages individually, even while using the same software banks use.

As Scott Toler, the CEO of the Credit Union Mortgage Association, explains, “If a 20-year member of the credit union is rejected by the desktop underwriting system because of a slightly low credit score, we can evaluate that loan personally and choose to keep it in our portfolio.”

While individually looking at mortgages may not be plausible, investing more energy into personal service and relations with customers making loans may have a similar effect, bringing customers back and giving banks a competitive edge with the growing credit union industry.
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