Much has been made already of Bank Transfer Day, a social media campaign by a California woman urging consumers to take their money out of big banks and put it into credit unions by Nov. 5, Guy Fawkes Day.
The movement received a significant amount of press attention and could be termed a success for credit unions: According the Credit Union National Association (CUNA), the nation's largest credit union advocacy group, credit unions added 40,000 new members on Nov. 5 alone, and 650,000 during the month leading up to Bank Transfer Day.
But where do credit unions go from here? Can they expect a continued influx of new customers if consumer sentiment against big banks remains high? And if so, how will they handle it?
I got some interesting insight on this recently from Javelin Strategy & Research analyst Mark Schwanhausser, who I was interviewing for another story about online account opening. He said the current climate offers a great opportunity, and also a challenge, to credit unions and small banks.
"I think it's one of the most fascinating moments in the history of consumer banking," remarked Schwanhausser. "There's this backlash against fees, and people have all the reasons in the world not to stay with their bank."
The challenge for credit unions, said Schwanhausser, is to provide an easy and user-friendly account-opening process, especially online. He said the rate of online account opening abandonment for credit unions is "shockingly high," and that is one factor that could hinder their growth, even in a climate where bank consumers might be more inclined to move to credit unions than ever before.
Another aspect to note amidst the wave of consumers switching to credit unions is increased security and fraud concerns, added Julie Conroy McNelley, an Aite Group analyst.
During an interview on e-banking security, Conroy McNelley noted that fraudsters may have seen Bank Transfer Day as an opportunity to find new targets.
"I guarantee the bad guys were aware of Bank Transfer Day and that there were fraudulent applications made that they hoped would not get noticed and fall through the cracks," she said.
Conroy Mcnelley added that with an increased profile, credit unions will more likely be targeted more by fraudsters and should be duly prepared.