Well, Christmas is over. I guess I just have to accept that its back to life as usual. Hope you all had a wonderful holiday! I spent most of mine in the car driving from one end of the state to another, so needless to say I had a lot of time to think. I've had something on my mind all weekend and I'd like to hear your opinion on this idea I have.
There's been a hurricane of talk about social lending, a national awareness effort, and even a full fledged branding campaign the past couple of weeks. I've been running through different points of view in my head and came up with an option I think has a lot of potential; Create a national social lending service, inclusive of all cu's, and use that service as the uniting "flag" for credit unions.
Taking a lesson from Zopa, create a site where people can apply for a loan or invest in deposit accounts on a very personal, p2p level. Once the application is filled out, the user is asked to chose a credit union that fits their "style". Think of it as a mixture of Zopa and Joinacu.com. I think this has the potential to unite credit unions within a "brand", but also keep them personal, local, and involved.
There are great, small, personal credit unions all over the nation (for example Lincoln Maine FCU to the left). Unfortunately most of these small credit unions don't have the funds or voice to reach out the way they wish they could. Uniting under a single peer-to-peer lending service would give these small credit unions a chance to reach out to people who identify with their specific message, without sacrificing outrageous amounts of cash for an ad campaign. It would let people who fit their field of membership find them. The fact that the applicant has a choice of where they become a member reduces some of the "corporate marketing" feel of a national brand or ad campaign.
One of the issues with a branding campaign, and even with an awareness effort (though less so in my opinion) is how to insure that all credit unions fit the model portrayed by the campaign. By uniting under a service and not a brand the "bad apple syndrome" would be dampened. Because the focus of the national ad would be the service itself and not a specific behavior of credit unions, the spotlight would be pulled away from those few rouge cu's. That isn't to say we should use it as an excuse not to get those bad apples back into the spirit of the movement, but it would reduce the chance that those few would ruin it for the rest.
The way p2p lending works is very indicative of the credit union movement, so in a way it would serve a triple purpose. To unite all credit unions in a national effort, increase awareness of our "people helping people" message, and take focus off the few "bad apples" who have strayed a bit from that message. Zopa has already proven that p2p lending is an effective way for large credit unions (such as Forum and USA Federal) to reach people on a very personal level. I think it may also prove effective in getting small credit unions connected with the people they want to serve. Whether the service is Zopa itself or a CUNA created site (similar in business model), I think there is great potential for credit unions uniting under an umbrella service such as p2p lending.
So there you have it, not a concrete business plan by any means, but hey, its an idea.
6 comments:
Hi Andy, just letting you know your link to Zopa is not working (I think the http:// was left out)
great post!
Thanks, fixed :)
It seems like I get all of my best thinking done while driving in the car. I just never have anything to write it all down with.
I like what you're saying about trying to find other ways to unite CUs because I think its something that needs to be done. It doesn't matter if banks are united because they will always be around. CUs, on the other hand, are constantly getting the squeeze in the legislature and pressure from banks to push them out of the market.
I think that rather than trying to build a new CU P2P network, it might make more sense to drive more CUs to participate in Zopa. Zopa has a proven track record in two other countries and has had several big US-based credit unions signed on from the beginning. Zopa loves CUs and CUs should love Zopa. This could be turned into another advantage CUs have to leverage over banks' collective heads.
Going with Zopa would be easier, smoother, and less risky than entering the p2p lending field as a new competitor. I think it would benefit credit unions as a whole if it were something we could call our own though. Zopa is a great company with a great purpose and mission (and a great relationship with CU's), but do you think people would be as quick to accept a service offered through a third party instead of directly from their credit union?
I hear what you are saying, but I don't think many people are going to be quick to accept p2p lending itself, let alone whether it is offered through a third party instead of their CU. Plus if it is offered directly through the credit union, it's going to take a lot of time/money/resources to set up a similar type of system.
In an age where lots of CUs are still scared of blogs (see this post) I find it hard to believe that many CUs could adopt their own version of p2p lending.
mike,
After thinking for a bit on this, you're right, if Zopa was available directly through the credit union it would be accepted (or not) as fast as a CU created service. Also, it would be as, or more, expensive to create such a service than to push out a national ad campaign. Not to mention that you'd have to nationally advertise for the service anyway, where Zopa can pretty much advertise itself.
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