May 26 2015

Member Relocation and Credit Union Market Share: Banking Preferences and Attitudes

Let’s face it: Moving isn’t fun. There is little to enjoy about hauling mattresses and couches in and out of moving trucks. However, most of us will relocate at some point in our lives. In fact, the average American moves once every five years.1 Depending on how far you move, there may be a lot of changes to digest. 

For some, moving can be as simple as getting a new apartment a few blocks down the street; for others it is a life-altering event that takes them to a new city or state. Whether the move is for family, a job, or school, we decide what we’ll take with us and what we’ll leave behind. 

What happens when credit union members move? Do they take their checking account with them? Do credit unions lose market share, or are they built to withstand distance? 

Smaller, community-based credit unions are still very reliant on personal, one-on-one interactions with their members. In late 2014, Filene conducted a survey of 862 respondents who had moved to a different American city in the past three years to study whether credit unions and other financial institutions lose market share when people move. In many cases, credit union members have the ability to stay with their credit union after moving. 

It may be difficult for these credit unions to keep members engaged once they’ve moved. After all, in today’s digital world, online banking offers an alternative to the branch. 

The survey reveals little correlation between relocating and switching financial institutions. This suggests that member relocation has a miniscule dollar impact on the credit union sector. Members who do end up switching financial institutions after moving do so to remain within a reasonable distance of a physical branch. Since the survey asks respondents what types of financial institutions they bank at, it is unclear whether members stayed at their current credit union or chose a new one after moving. 

In order to ensure members feel engaged in any location outside of the branch, your credit union should invest in robust online DIY tools and applications. The priority should be to broaden access points and service channels to afford members multiple opportunities to stay connected. Moving doesn’t have to mean the end of your relationship with your members. 

Filene thanks our generous supporters for making this important research possible. 

Report Number 360