best kept secret in banking

5 reasons why customer owned banking is the best kept secret

Even though many customer owned banking institutions cannot compete with the advertising budgets of the big banks, they have many endearing qualities that outweigh them. Read on and find out why customer owned financial institutions really are the best kept secret in the finance industry!

1. Owned by their customers

Unlike banks, which are owned by shareholders, customer owned banking institutions like Summerland are defined by their mutuality and are 100% owned by their customers. As a member you can also take part in some of the decision making processes, such as voting at your institution’s annual general meeting.

2. Competitive rates and fees

In some cases customer owned banking institutions have very small marketing budgets compared to the major banks, however their products and services continue to be very competitive and in many cases much better value.

3. Satisfied customers

According to research from Roy Morgan in November 2017, satisfaction with the big 4 banks was at 78.6%; just below their 17 year high of 80% in 2013. In contrast, credit unions, mutual banks and building societies scored in excess of over 90% satisfaction. With profits going straight back to increased levels of service, it’s no surprise why members of customer owned banking institutions continue be happy.

4. Ethical banking

Credit unions, mutual banks and building societies are prudent and responsible lenders that provide ethical banking and good governance. This includes not writing loans that can’t be paid back or will over-stretch their members. The September 2009 Reserve Bank Financial Stability Review highlighted this fact, with customer owned banking institutions demonstrating the best credit quality standards in the market.

5. Community involvement

Customer owned banking intuitions have a long history of having a strong presence in and support for diverse communities, whilst working collaboratively and co-operatively. Adopting the credit union philosophy of ‘people helping people’, a proportion of those institutions’ profits continue go back to help people in the local community.

Customer owned banking institutions represent 49 credit unions, 2 building societies, 19 mutual banks and over 4 million members. With outstanding service, competitive rates, lower fees and a commitment to local communities, it’s banking with a conscience. If you’d like to find out more visit the Customer Owned Banking Association.