Republished from CU Times dated October 21, 2019. By James McCabe.
Instead of offering free checking accounts that in fact come with fees, consider data and identity protection services.
Recent news about the growing number of credit unions replacing “free” checking with checking accounts that include more value-added features is a clear indication that credit unions are listening to what their members really want. Consumers and credit union members want something of real value and they’re willing to pay for it.
As recent articles published in 2019 have pointed out, many credit unions have seen the pitfalls of pushing “free checking.” Often, members who have free accounts begin to feel “nickel-and-dimed” and misled due to fees such as check reorders, ATM transactions and overdrafts. Also, as stated by Ron Shevlin, a director of research for Cornerstone Advisors, “Free checking is not a springboard for a deeper relationship.”
Furthermore, in 2018, Cornerstone Advisors published survey results that indicated millennials want and are willing to pay for non-financial services that come as valued-added features with their accounts at financial institutions. According to the study, the majority of millennials want value instead of free – especially when it comes to services that provide data and identity protection. These value-added services are excellent ways for credit unions to facilitate more profound relationships.
With October being National Cybersecurity Awareness Month, it’s a perfect time for credit unions to consider offering valuable protections that members want, such as mobile phone insurance, ID theft protection and child ID theft protection. These are the kinds of protective services credit unions should strongly consider offering to their members and attaching perhaps to a checking account to build value that goes far beyond “free checking.” These services can help credit unions significantly increase member engagement and loyalty, as they become a safe harbor for the members’ wealth, identities, phones and families.
The same members who have no problem paying as much as $15 a month for subscriptions such as Netflix, Amazon Prime and Hulu will appreciate “value checking” accounts versus accounts with perceived, fake, “free” services. Credit unions have a unique opportunity with their members to create the ultimate engagement opportunity and prevent members from seeking these services from a less trustworthy online resource.
The increasing dangers presented by the recent avalanche of data breach events such as Capital One, DoorDash and Zynga (publisher of mobile games such as Words with Friends), creates an environment of uncertainty for all consumers – including your members. This is the perfect time to enhance your services to protect members beyond the walls of your institutions and provide them with peace of mind. Embed more valuable protective services into your financial account offerings and secure your membership for years to come.
Jim McCabe, Senior Vice President, Identity Theft Services at Vero.