Financial & Economic Blog

Money To Blow from Bankerspank 

Take up the cause and send a link to this blog to a friend who needs to learn more about Credit Unions.

-Kris

The long-term forecast in financial services is stormy: technology rapidly commodifying every product, physical transactions giving way to online, profit margins under severe pressure, rising customer expectations and falling loyalty. Challenges loom on every front. And perhaps nowhere are these winds of change trickier to navigate than in wealth management, where individual investors expect a level of ...

One of the biggest problems Morgan Stanley's wealth management unit has been facing in recent years is a steady loss of top-producing financial advisors (FAs). Each one was taking important clients and their assets to rival brokerages. During the 2005-2006 period, Morgan Stanley's turnover rate among FAs ran to nearly 11 percent. Thanks in large degree to Cisco's networking technologies and consulting ...

High Performance on Wall Street - NEW YORK, New York, September 17, 2007 - Cisco® today announced a new server host and fabric software, known as Datagram Acceleration Layer (DAL), designed specifically to accelerate multicast-based market data infrastructures for automated trading applications. When combined with Cisco InfiniBand Server Fabric Switches, the new Cisco DAL software will help customers to handle rising messages rates, while reducing the message delivery latency between ...

High Performance on Wall Street - NEW YORK, September 17, 2007 - Cisco has collaborated with Reuters and Sun Microsystems to deliver an end-to-end low latency solution for automated and algorithmic trading. Testing by Sun Microsystems showed the solution reduced overall system latency by up to 38 percent, with minimal impact on customer's applications and infrastructure. The tuned solution will enable customers to quickly deploy a low latency market data infrastructure while preserving their ...

KUALA LUMPUR, Malaysia, September 17, 2007 - The world's largest Islamic bank, Al Rajhi Bank, has deployed the Cisco® Unified Communications system as a strategic move to drive its business expansion in Malaysia. The solution has been implemented across the bank's 182 existing branches to provide a highly scalable, cost-effective and highly secure communications system and it will accommodate future growth plans for up to 50 branches by 2010. "Al Rajhi Bank's success as the ...

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Alistair Darling has said on the BBC 's Today programme:

The problem hit Northern Rock because of its particular business model.

It seems that this bank has grown by borrowing short-term in order to lend long-term, to put it simply. Sounds risky, doesn't it? A banking expert writes in today's Times:

If anyone on one of my [training] courses had suggested that one could finance mortgage lending by borrowing on the money market at three months they would have been ridiculed as a financial illiterate. It is similar to overtaking a long queue of traffic of the outside of a bend; everyone knows it works (for a time), but only fools or the inexperienced would attempt it.

Many of the customers queueing to take out their money will be wondering how this "strategy" was ever allowed. One "old-fashioned banker" suggests on the same letters page that:

The Bank of England, by funding Northern Rock, is ... setting an example to others that imprudent lending will be tolerated.

There is something seriously wrong here. Another financial scandal ... and once again, "ordinary" people pay the price.

As you may or may not know I work for a credit union here in North Carolina, infact I have now officially worked in credit unions for 15 years. I know what you're saying, "but Kris you look so young". I know, thank you but it is the truth. And while I have not worked for the same credit union for 15 years, the ones I have worked at are leaders in the industry and I am very proud to have worked for such fine institutions. (I wrote that just in case my boss reads this post!) No really, I love credit unions.

But recently there have been a couple of items that give me cause for concern.

Firstly, we were conducting research for a project at work and decided that we'd like to hear from our members and from some non-members about our plans so we set up a series of focus groups. The focus groups that contained members were fabulous. Because I work in IT, behind the Curtain, I don't often get to meet members and I relish every chance I get to meet and work with them, I find it energizing. The meetings with the non-members were also interesting but what became clear pretty quickly was that the younger non-members had no idea what a credit union was.

We heard some comments like, "I think they are just like a bank, but I can't join." As someone who has worked in credit unions since I was 15, I can tell you I was stunned and a little dismayed. Credit Union's and banks are NOT the same, but why didn't they know that? Why didn't they know that credit unions are not-for-profit organizations, doesn't everyone know that?

Secondly, a repeating theme has been coming up in planning for next year, and I suspect it is a similar discussion at every financial institution . You see as the baby boomers begin to retire, on average, their need for loans begins to decrease dramatically. Well a healthy loan portfolio is one of the cornerstones to a successful credit union. Where will the new market for loans come from . . . .the X's, Y's, and millenials. But they don't know what a credit union is (see item one), ut-ohh.

Well we have to tell them! We need to tell them how the interest they pay on loans, credit cards, and mortgages at a credit union is returned to them in the form of more products and services at lower cost, and higher savings rates than banks. For banks that income is turned into profits for the stockholders, or war chests to buy up the competition and return more value to . . their stockholder. Nowhere are they returing value to their customers.

In my opinion, for years the credit union industry has tried to fly under the radar hoping to not piss off the BANKS and thereby avoid legislative challenges to their non-profit status. But the consequence of operating off the radar screen is that we are also off the radar screen for our potential members. Well its's time we stood up and said "We are here, and here is what we can do for you!"

One of the many national organizations conerned with credit unions needs to begin building a national credit union advertising campaign to highlight the benefits of using credit unions instead of banks. And it should stress to every american that there is a credit union you can join today. In our brand consious world we need to spend some time building the credit union brand. So that the new alliance of credit unions can strike back at the empire banks have built. All we need is our Luke Skywalker!

Credit unions can be hip, my generation is very likely to get behind non-profit intiatives that stick it to greedy corporations like banks . . .Credit Unions can be a perfect fit with this group but someone is going to have to say it!

Higher Savings Rates!

Low or No Fees!

Lower Loans Rates!

Being a Member Owner instead of a Number

Full Financial Products and Services Available!

It's Time "You" Joined!

Why is this commercial and one's like it not on in every major market in the country.

James F. Burns

Broker/Owner

Creative General Insurance Agency

61 S. Morton AVe

2nd Floor, Suite 3A

Morton, PA 19070

610-544-4424

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