Membership growth: A reversal of fortunes
Pictured above: Island Savings president Randy Bertsch (midde) with First West Credit Union board chair Shawn Neumann (left) and First West CEO Launi Skinner.
Joining First West sees Island Savings buck the troubling trend of flatlining membership
Of the challenges currently facing Canadian credit unions—including persistent low interest rates, intense competition and tighter regulatory requirements—there is perhaps none so unsettling as the phenomenon of declining membership.
A 2013 report by Central Credit Union of Canada (now the Canadian Credit Union Association, or CCUA) found 26.5 per cent of members are seniors compared to 18.6 per cent of the adult populace, while on the other end of the spectrum, 27.9 per cent of Canadians occupy the coveted 18-to-34 year-old age range but only 14.3 per cent of those are credit union members. It’s perhaps not surprising then that from 2006 to 2011, Canadian cooperative financial institutions recorded a net membership decline of 0.8 per cent at a time when the country’s population grew by nearly six per cent.
Long-time Cowichan Valley resident and credit union executive Randy Bertsch is no stranger to the troublesome trend. Two years ago, his credit union, Island Savings, was one of those struggling to grow its membership base. The Duncan, B.C.-based financial cooperative had grown by a paltry three (yes, three) net new members in 2014. Bertsch knew that bold actions were needed.
Fast forward one year and Island Savings was boasting staggeringly different results. By the end of 2015, Bertsch and his team of roughly 400 employees had acquired nearly 2,300 net new members. How did they manage such remarkable growth despite little meaningful change in external circumstances or market conditions? Bertsch points to a singular factor: in late 2014, Island Savings members voted in favour of a merger that saw Island Savings become a division of First West Credit Union.
“The change was nothing short of remarkable,” says Bertsch. “We knew going into the merger vote that joining First West would enable us to compete more effectively and win new business, but we were overjoyed that the results were so immediate.”
Making a real difference in the lives of members
“This was not a traditional merger story of a larger credit union swallowing up the smaller one,” says Bryan Mavrow, senior vice president of marketing for First West. “First West’s ‘why’ is to make a real difference in the financial lives of its members by creating a network of like-minded credit unions with the size to work big and the grassroots common-sense to work local.”
When Island Savings officially become part of First West on Jan. 1, 2015, it was able to immediately create efficiencies by taking advantage of market intelligence and best-in-class products. The First West, “work big, work local” model creates a more stable and resilient credit union because risk is diversified across local economies and geographies.
“Being part of First West gives us the financial freedom to provide a greater breadth of products, while still maintaining our local roots, solid reputation as trusted financial advisor, as well as our credit union values,” says Bertsch.
The Unlimited Chequing for Business® account and Simply Free Account™, which launched at Island Savings in April 2015, are two examples of market-leading low-cost and no-cost products the likes of which Island Savings hadn’t previously been able to offer.
“Employees and members alike had been requesting products like these for years, but it wasn’t feasible without the backing of a larger, stronger credit union,” says Bertsch.
Bringing leading edge financial products to the Island
Products like the Simply Free Account™ and Unlimited Chequing for Business® account have brought more islanders in the door, but more importantly, they’ve given Island Savings employees a new platform to talk to members about their larger financial picture. It’s that holistic approach to members’ financial planning that builds the foundation for future credit union growth, not only in terms of membership numbers but also in terms of share of wallet.
“We’ve listened to B.C. families and we know that they need simplicity in their lives,” says Mavrow. “The financial complexity of having young children—paying mortgages, saving for education, managing credit, funding your own retirement—is overwhelming and our aim is to stay true to our brand promise of ‘keeping it simple’.”
“It’s an attractive value proposition that I believe is truly resonating with our audience, and our membership growth numbers are the proof,” he says. “We promised members that this partnership would be good for families on the island and there is no greater feeling than seeing that promise come to fruition.”