Credit Unions Deliver a Different Level of Service

In the lookalike world of institutional service in Canada, it’s easy to mistake credit unions for banks. Both have similar physical structures, and even the people driving up to the ATMs seem to be cut from the same cloth.

 

Member Driven

But appearances, as the saying goes, are deceiving. With their roots dating back to the early 1900s, credit unions are financial cooperatives: locally owned entities that invest their profits where their members live and work. 
 

Credit unions are accountable to their members and operate autonomously, each with its own management and board of directors, but united through provincial centrals that provide financial, technology and trade services. This network has power, support and stability. Currently, approximately 317 credit unions exist in Canada, operating 1,740 branches with about $180 billion in assets. 
 

They are also a strong contributor to provincial economies. “In B.C., 42 different credit unions employ about 17,000 people,” says Don Coulter, chief executive officer for Coast Capital Savings. 
 

Coast Capital, one of B.C.’s oldest credit unions that is currently celebrating its 75th  anniversary, was formed in an amalgamation of three of the province’s largest organizations: Pacific Coast Savings, Surrey Metro Savings and Richmond Savings. It is the country’s biggest credit union by membership (522,000 members).
 

Maury Kask, senior vice president, consumer operations, for Westminster Savings, notes that “many consumers 

believe credit unions simply can’t handle their financial needs as they become increasingly complex. However, at Westminster Savings we have the full scope of business and consumer products and services that anyone may require. Plus, we are part of the credit union system, which gives our customers access to over 3,200 ATMs across Canada.”  
 

Special attention is paid to customer service. “Our success is driven by our employees,” says Kask. “In fact, when recruiting new staff, we specifically look for people who have the right disposition, service approach, business acumen and love solving problems.”
 

Coulter points out that the relative small size of credit unions makes them nimble. “As well as enabling us to better respond to member needs, this nimbleness inspires innovation,” he says. Credit unions pioneered lending money to women in their own names; they also created variable rate mortgages and introduced Internet 

home banking.
 

“Coast Capital Savings can take credit for a few innovations too: we were the first financial institution to offer free chequing, in 2005,” Coulter adds. 
 

But it’s no secret that credit unions, despite Ottawa granting them the ability to go national and compete with other financial institutions in 2012, are engaged in a perpetual battle against banks to win the trust of the Canadian public. On that score, the Credit Union Central of Canada has been lobbying for a capital growth tax credit that would help level the playing field.

 

The Credit Union Advantage

So, why choose a credit union instead of a bank? Members invariably point to lower mortgage rates and higher interest rates, in addition to a higher level of personalized service.

 

They also have a reputation for being closer to their small-business customers. “We have 36,000 small-business accounts and a small-business banking team that handles everything from cash management and lending to deposit taking and foreign exchange,” explains Coulter.
 

Small business at Coast Capital is linked to the institution’s philosophy of building communities (which it does by giving seven per cent of its pre-tax profits annually to its communities). “For example, through our Venture Connection partnership with Simon Fraser University, five start-up businesses are selected yearly, and we support them with space to work and advice to help them develop their entrepreneurial skills,” says Coulter. A similar partnership exists with the University of British Columbia. 
 

Small business services at Westminster Savings are growing. “We’ve earned a strong reputation in our 70-year history and have carved out a strength in business banking and commercial lending, but we also understand the crucial importance of small business to our local economy,” says Kask.
 

Westminster Savings, which was the first credit union in Canada to provide its members with mobile banking, is focusing on “going mobile” as well as being an integrated one-stop, full-service financial shop. “For example, we have mobile small-business relationship specialists who regularly visit our members at their place of business to ask important questions and determine their needs, and we’ll be expanding our capabilities in this area going forward,” says Kask.
 

Being a one-stop shop benefits businesses as well as other members “simply because they’re dealing with one organization,” says Kask. “Westminster has a very strong commercial lending group and an equally strong wealth management practice. As well, we operate two leasing subsidiary businesses that can meet the large and small scale automotive and equipment leasing 

needs of customers.”
 

The Future

Coast Capital Savings earned considerable press attention this year for the construction of its new headquarters beside the Expo Line’s King George Station in Surrey. 
 

While the architecture of the LEED Gold headquarters (dubbed Coast Capital’s Help Headquarters because the organization’s mission is to help its members improve their financial well-being) is visually striking, Coulter points out that its expansive, open workspace with people-oriented amenities (including a daycare and fitness centre) reflects the organization’s approach to business. “We are collaborative and open in nature, and this is evident in our 50 branches across B.C.,” he says, adding that two new branches, in Kelowna and Courtenay, will open next year.

Meanwhile, Westminster Savings continues to evolve. “We’ve got a lot of cool stuff coming down the line, including the opening of three new branches within the next three years, and an entirely new interior design for all of our branches,” says Kask. 
 

Westminster Savings is also continuing to give back to the communities it serves (it invests about $1 million yearly in various programs), and has earned considerable positive feedback for programs such as the Balance Power Pack, which helps teach children important financial basics like spending, saving and giving.
 

Coulter summarizes the credit union experience in general when he says, “We have a purpose that goes far beyond just making money—which, incidentally, we do very well. More importantly, we help people achieve their dreams. No matter how much we evolve, that will always be our core objective.”