NEWS

One of the big challenges that trust can overcome is that some consumers are still uncertain about the security of mobile banking transactions, especially with the recent retailer data breaches and other instances of identity theft… Nevertheless, even with a lack of security comfort, there is no doubt that mobile banking and use of digital wallets are rapidly growing, and will continue to have a dominant impact on the dynamics of the financial services industry.

Credit unions will most certainly capture a portion of this growth and could outpace banks with the trust advantage in their corner, especially when concern over security is one of the critical factors that needs to be addressed satisfactorily. In fact, according to Rate Watch, the importance of trust could certainly be related to the fact that 68% of credit union members say they use mobile banking more than once a week, while 57% of bank customers say they do so.

Let’s take a closer look at the connection between credit unions and the element of trust. In an August 2014 report, the Chicago Booth Kellogg School Financial Trust Index showed that consumers clearly trust credit unions more than banks. The index pointed out that trust in credit unions among their customers is 60%, while customers’ trust in big banks is 30%. “Research is showing how effective credit unions are at creating trust with their members,” the Kellogg report said. “As long as this trust is sustained, there is no reason to think credit unions can’t grab more market share.”

Adding to this body of research, an October 2014 report by the Harris Poll found that consumer trust in credit unions held steady during the previous year while trust in banks was in decline. Harris pointed out that many factors have a great deal of influence on the trust Americans have for financial institutions. Personal experience tops this list, with 66% of Americans stating this factor has a great deal of influence on their level of trust. The quality of products and services, quality of customer care and amount charged in fees all tie for next most influential, with 56% saying each of these has a great deal of influence.

According to the report, members of credit unions have higher expectations of their credit union than customers of banks do and over the past two years, not only have member expectations increased, but credit union satisfaction scores have increased as well. Furthermore, member loyalty is greater at credit unions. The likelihood that a member will continue to do business with the credit union is far higher (nearly 20%) than all others measured in the survey.