Credit Union Market Niches: Social and Demographic Opportunities

Credit unions that want to juice membership growth face a limited set of options. If the field of membership is not broad enough, the credit union can petition to change it and serve new groups. Often the field of membership is expansive enough, so the challenge becomes how to approach new members of a group that will complement the credit union and allow it to grow.

At the crossroads of culture and financial services, credit unions find opportunities to serve groups whose needs don’t match up exactly with existing services. This report offers detailed cases around four groups:

• First Nations populations in Central Canada—Strong personal relationships and the ability to flex traditional lending and collateral practices go a long way.
• Latinos in North Carolina—A definable field of membership underserved by traditional outlets, word-of-mouth growth from tight social connections, and creative business practices that set it apart from less flexible competitors.
• Lesbian/gay/bisexual/transgender (LGBT) groups in British Columbia—This is a strategy that would work only in areas with a significant “out” population.
• Young adults across North America—Credit unions have to punch above their weight with word-of-mouth marketing and modern online services.

A case-based approach like this cannot offer comprehensive guidance. Nevertheless, analyzing cases as diverse as these leads to clear take aways for credit unions seeking to serve a niche market well:

• Focus is key.
• Root out biases early.
• Make it somebody’s full-time job.
• Let it age.
• Partner up.

Again, the cases in this report are only examples of the hundreds of ways credit unions are cultivating market niches, but they uncover common strategies. Anywhere a group comes together with common challenges around money is an opportunity for credit unions.

This research about serving market niches is the first of a series of joint projects published under a partnership between the Filene Research Institute and Credit Union Central of Canada, Canada’s national credit union trade association. Combining our reach allows us to address issues equally important in both countries and to learn about consumer and credit union challenges across the border.