Ian Burns is CEO of Alberta Central.
What is Alberta Central and what does it do?
Burns: Alberta Central is the central banking facility, service bureau and trade association for Alberta’s credit unions. We’re owned by 17 credit unions that together have more than $25 billion in system assets and serve more than 628,000 members at 190 branches across Alberta.
Our purpose is to champion change in the credit union system and bring value and expertise to our members. We do that by offering products and services to help them in their operations, but also with thought leadership and strategic direction to address the disruption happening in the financial services industry.
We also advocate for credit unions through awareness and engagement efforts with stakeholders, including the public and government.
Can you explain the main difference between a credit union and a bank?
Burns: Credit unions are financial institutions that, like banks, offer a variety of products and services from savings and chequing accounts, to mortgages, loans and investments. Credit unions also offer the same access to branches, an extensive national network of surcharge-free ATMs, online banking and mobile apps. They serve millions of Canadians and are open to anyone.
The biggest difference is that credit union customers are members and owners. As co-operatives, credit unions are governed by their members and committed to serving them and their communities. And becoming a member doesn’t involve signing away your freedom with a 20-year commitment; it’s as simple as opening a chequing account and purchasing common shares for a small, one-time fee.
As a member, you get to vote on a range of issues, including how the credit union reinvests capital into your community.
Another important difference is that when a credit union makes a profit, they share it back with members in the form of annual returns. In 2017, $79.8 million was shared back with members through patronage and share dividends.
Credit unions are also subject to a deposit insurance regime that offers a 100 per cent deposit guarantee through the Alberta Credit Union Deposit Guarantee Corp. That means the money a member puts in, and the interest earned, is safe and secure up to any dollar amount without limits or restrictions, unlike most banks.
When it comes to customer service, credit unions have taken the top spot for 14 years as part of the Ipsos Best Banking Awards. Prudent management and strong cultures are contributing factors to that. The three largest credit unions, Servus Credit Union, Connect First Credit Union and Vision Credit Union have all received top employer/best managed company awards.
Credit unions also explore innovative solutions to make the customer service experience better. For example, Servus Credit Union has a high-tech branch that’s unlike any other.
Credit unions also have a great history of innovation, delivering new products and services before many banks. This includes being the first to offer fully functional online banking, mobile cheque deposits and mobile pay. And credit unions introduced ATMs before anyone else.
Can you give me an overview of how popular credit unions are in Alberta and how that has grown over the years?
Burns: Alberta credit unions are seen favourably by existing members. With non-members, the problem is a lack of understanding and awareness about what credit unions are. For example, one myth about credit unions is that they’re small organizations with only a few branches located in rural communities. Other misperceptions are that credit unions are not trustworthy or secure, not stable, have high fees, don’t know anything or are shady.
All of these couldn’t be farther from the truth.
Understanding this gives Alberta Central and credit unions an opportunity to continue to proudly shine light on the credit union difference. Frankly, the system hasn’t always been very good at that.
In 2019 and onwards, Alberta Central is really focused on helping build that awareness by engaging more with Albertans on how credit unions are an excellent choice. Our credit unions are also working hard to build more awareness.
Servus Credit Union’s Big Share Contest is open to members and non-members, offering the chance to win $1 million. Spark the Energy Credit Union also recently rebranded from Shell Credit Union – originally created for Shell employees – to meet and respond to the evolving and cyclical needs of the energy industry at large and how that impacts members.
Who do credit unions appeal to from a consumer perspective?
Burns: Credit unions are a compelling choice for all Albertans at any stage in life looking for an alternative that offers unique benefits with a business model focused on what’s best for them.
What have credit unions done to attract a younger demographic as members?
Burns: The younger generation is starting to see the value credit unions provide and that’s because credit unions know the importance of meeting them where they are. That includes respecting their need for value, offering student loans and credit cards, and excellent interest rates. Many of them are experiencing firsts (paying off a student loan, buying the first car, home, etc.) and so credit unions offer products and services that recognize those unique stages and needs.
Credit unions are also in tune with how the younger generation prefers to bank. Convenience and speed are important, and providing forward thinking solutions or incentives accessible on their smartphones is critical. For example, Encompass Credit Union has a loyalty and rewards app specifically geared towards people using smartphones that gives discounts on things purchased through local participating merchants.
Credit unions are also very much about values and supporting the individual. For the younger demographic, this is vital because trust and integrity are important to them. Credit unions are based on a culture of local compassion and loyalty, and that’s reflected in how they give back to the community. The Each One, Teach One financial literacy program is one example. Through this program, credit union employees teach basic financial skills to children and adults in local communities.
Credit unions truly have a lot to offer Albertans. To find a branch near you, all you have to do is visit albertacreditunions.com.
– Mario Toneguzzi