The Barbados credit union movement has strayed from its roots and gutsy approach to the provision of financial services. And perhaps, therein lies the problem we face today. It’s gotten easier for us to mimic banks than continue to evolve around our radical DNA and to “be different.” I believe we are at a crossroad – we have the opportunity to be bold and reinvent ourselves or to be fine with being a bank without the label. Oh, to be truly different again!
As many of us in the credit union movement know, our history was one filled with pioneers who dreamt of people helping people and individuals having control over their own financial futures. That’s how it all got started. But today, over the course of the years, we changed; some of the changes came as the result of professionalization, the desire to compete more directly against banks and as a result, we’ve transformed into being banks with a different name – although some credit unions try to mask the fact that they are a “credit union.”
Credit union advantages
Over the years we’ve tried at the local and regional levels to explain credit unions and point to our incredible differences as a benefit to members and an advantage over banks. It usually takes a conversation to identify and articulate each of the key advantages we have over banks and explain the real benefits in relatable terms to consumers. There are a few credit unions that have gone as far as to create slogans that clearly distance themselves from banks. But, for most, we behave just like banks and even boast that we have everything that banks have as a sort of apology for being a credit union! We need to save our industry and future, or we will all end up being banks.
Credit unions in Barbados have fallen into the trap that they must mimic banks to survive. The history of the movement is filled with differences that make it so much better than banks. Movement founders were rebels, revolutionaries who argued for a radical approach to banking. Credit unions started out differently and if they are to meet the needs of the members must continue to promote our differences. Until recently, credit unions held a significant satisfaction advantage over banks. That has changed. What happened? We must regain our advantage over banks.
Credit Unions need to commit to making a dramatic and radical change to how they conduct business. We often talk about “people helping people”, the credit union movement mantra. Now is the time to contemporize that slogan and use it to our advantage. When the movement started, credit unions provided individuals with the ability to control their own financial futures.
To truly reposition itself and provide a meaningful difference from banks, the movement needs to return to the radicalism that influenced its growth and development. What if we became the movement dedicated to making sure that all members become financially healthy and well? In short we need action instead of words. It would require a new way of thinking, new commitments and promises to members, and new products and services to ensure that we are improving the lives of our members, and contributing to a healthier economy and local communities in ways that we haven’t done, and banks certainly won’t do, given their business model that puts profits over people. It would reinforce the not-for-profit business model we operate on.
Shedding some debt
Policies should be put in place that might similarly prescribe a regime to get the member to a healthy financial state. For example, shedding some debt, saving for emergencies or specific goals (like retirement or college education), refinancing loans at a lower rate, investing in higher interest-bearing products like money market accounts or certificate of deposits, or a plan to improve the member’s credit score.
The benefits to the member and the credit union movement of an industry repositioning like this are obvious. But it will take a commitment to do what’s right for the member, not just the credit union’s bottom line. Most of all, those of us who lead the movement must never forget that the credit union is not a bank, and any conflict between saving and borrowing must be determined by deliberation within the membership and not through competition with banks.