Australia's credit unions have the opportunity to reinvigorate both their consumer and industry brand reputation as the Federal Government embarks on an effort to revitalise the competitive positioning of the sector.
The planned Government Protected Deposits seal, an initiative launched to help consumers understand that all banking institutions meet the same strict rules and have the same protections, has been welcomed by the industry, though marketers suggest that a more robust campaign will be needed to bolster the credit union sector's brand currency.
Members of credit unions and building societies tend to spread their business, with half holding a bank account in addition to an account with a mutual (as shown in the accompanying table supplied by Roy Morgan Research).
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A credit union or building society member with a home loan anywhere is more likely to have their home loan with a bank (as 53.8 per cent do).
The Roy Morgan Research data shows that the 'share of wallet' is slightly more than half, or 57.4 per cent, for core transactional accounts.
For total traditional banking products (including deposits, home loans and cards) the CUBS' share of wallet is less than half.
The Government Protected Deposits symbol, which will be finalised early next year, will provide surety to consumers that their deposit is protected by the government in the same manner as a 'big bank'.
Louise Petschler, CEO of Abacus, the body representing Australia's mutual banking sector, welcomed the initiative, saying: "This will strike at the unfair advantage gained by major banks due to misconceptions that they have a higher prudential standing than other institutions."
Earlier this year, Abacus, which represents 115 credit unions and mutual building societies, launched its first comprehensive marketing campaign in years, under the tag line "Comes back to you", created by agency Essential Media Communications.
Essential Media's director, Elizabeth Lukin, told Banking Day that the purpose of the campaign was to raise awareness of CUBS (credit unions and building societies) as a competitive and credible alternative to banks.
Lukin found while researching the market for the Abacus campaign that "a lot of people don't know that there is a credit union or building society for every Australian - and so not enough Australians know about the real competition to the banks. There is also a sense that because they are not as big as the banks, or called banks, maybe they don't have the backing of government or the guarantee behind them."
Marshall Ward, of design agency Blue Marlin, said that the protection symbol could be a powerful tool, though the suggested graphic on the Treasury website (and designed in-house) needs a lot tinkering.