Value proposition preferences of credit union members and patronage activity

2014 ◽  
Vol 32 (6) ◽  
pp. 567-589 ◽  
Author(s):  
Noreen Byrne ◽  
Olive McCarthy
Keyword(s):  
Financial Institutions ◽  
Financial Services ◽  
Credit Unions ◽  
Credit Union ◽  
Value Proposition ◽  
Content Type ◽  
Relational Value ◽  
Emotional Value ◽  
The Impact ◽  
The Relationship

Purpose – The purpose of this paper is to examine the technical and relational value proposition preferences of credit union members and to examine the relationship between their preference and patronage activity. Design/methodology/approach – A total of 800 members of credit unions were surveyed. Exploratory factor analysis was used and four factors were extracted incorporating technical and relational dimensions of the credit union service. Member value proposition preferences are examined and the relationship to patronage activity of the credit union was explored. Findings – The majority of members express a higher or equal preference for a relational rather than a technical value proposition. Those that express a greater or equal preference for relational value are more likely to have a higher level of patronage activity. Research limitations/implications – Credit unions are member-owned financial institutions and hence the study is context dependent. Credit unions are member-owned financial institutions and hence relational value may be more significant than in the case of non-member owned entities. Practical implications – The research highlights the importance of consideration of relational value in financial services entities whose competitive advantage lies in the relational. In terms of the credit union, the impact on the relational value proposition of the credit union must be considered in the design and implementation of industry restructuring. Originality/value – This paper extends the emotional value and interactive quality construct to incorporate a greater relational focus which the paper suggests is of greater relevance to high-contact financial services. The research in this paper also extends beyond the criticised static focus of consumer perceived scales (consumer perceived value) and the episode focused service quality scales. Hence, it has a more longitudinal and holistic focus. The paper also incorporates a preference between benefits approach rather than an evaluative or trade-off between benefits and costs framework.

The impact of strategic consistency on market share and ROA

2014 ◽  
Vol 32 (3) ◽  
pp. 176-193 ◽  
Author(s):  
Larry P. Pleshko ◽  
Richard A. Heiens ◽  
Plamen Peev
Keyword(s):  
Marketing Strategy ◽  
Market Share ◽  
Financial Services ◽  
Corporate Strategy ◽  
Credit Unions ◽  
Credit Union ◽  
Theory Approach ◽  
Aggressive Approach ◽  
Content Type ◽  
The Impact

Purpose – The purpose of this paper is to take a contingency theory approach to examine how performance is affected by the relationships between the Miles & Snow strategic groupings and a variety of marketing strategy concepts, including a firm's service focus, service growth, market coverage, marketing initiative, market growth, Porter strategy, and market orientation. Design/methodology/approach – Data for the study were gathered from a statewide survey among 125 chief executives of credit unions belonging to the Florida Credit Union League (FCUL). ROA figures were derived from government-mandated accounting reports in the state of Florida. ANOVA and correlation analysis were employed to analyze data. Findings – This study shows that firms that match an aggressive Miles and Snow profile with a more aggressive approach to seven other strategy dimensions often enjoy higher market share relative to credit unions characterized by a different alignment of the various aspects of marketing strategy. The results also suggest that achieving such a fit is not relevant to maximizing a firm's ROA. Research limitations/implications – The research sample was biased toward medium to larger firms that may possess strategic resources superior to those of the smaller firms in the industry. Also, credit unions may tend to have somewhat less aggressive profit objectives compared to other institutions in the banking industry. Practical implications – The findings outline to financial services executives the benefits of considering all dimensions of corporate strategy simultaneously, rather than one at a time. Originality/value – The paper illustrates how aligning certain aspects of marketing strategy can boost particular performance indicators and provides insight as to what the most appropriate alignments are depending on the circumstances.

Income structure, diversification strategy and owners’ benefit in cooperative financial institutions

2020 ◽  
Vol 16 (4) ◽  
pp. 481-500
Author(s):  
Hoang Van Cuong ◽  
Hiep Ngoc Luu ◽  
Loan Quynh Thi Nguyen ◽  
Vu Tuan Chu
Keyword(s):  
Financial Institutions ◽  
Credit Unions ◽  
Credit Union ◽  
Least Square ◽  
Policy Implications ◽  
Diversification Strategy ◽  
Income Diversification ◽  
Significant Drop ◽  
Content Type ◽  
Common Bond

PurposeThe purposes of this paper are twofold. First, it analyses the income structure in cooperative financial institutions and examines how traditional and non-traditional incomes are related. Second, it evaluates whether increasing diversification towards non-traditional incomes facilitates or hampers the benefits of financial cooperative owners.Design/methodology/approachData are collected from over 3,100 US credit unions over the period of 1994–2016. A number of modern econometric techniques are employed throughout the analysis, including the use of panel fixed effect, generalised method of moments (GMM) and two-stage least square (2SLS) methodologies.FindingsUsing US credit unions as the empirical setting, the empirical results reveal that the expansion of traditional income leads to a corresponding increase in income from non-traditional activities. However, an increasing reliance on non-traditional income causes a significant drop in interest margins. The authors also find that the extent to which income diversification affects owner benefit varies across credit union types and period of time. While income diversification negatively affects owners' benefits in single common bond credit unions, it has no significant influence on multiple common bond and community credit union owners' benefits. Third, diversification can be beneficial during crisis time, but can be detrimental to owner benefit during normal time.Originality/valueThis paper provides some of the first empirical investigations on the diversification strategy of cooperative financial institutions. Therefore, the results offer significant policy implications for policymakers and market participants on whether financial cooperatives should diversify or specialise.

scholarly journals How interactive marketing is changing in financial services

2016 ◽  
Vol 10 (4) ◽  
pp. 338-356 ◽  
Author(s):  
Merlin Stone ◽  
Paul Laughlin
Keyword(s):  
Customer Service ◽  
Financial Services ◽  
Practical Implication ◽  
Information And Communications Technology ◽  
Dark Side ◽  
Content Type ◽  
Related Information ◽  
Research Article ◽  
The Impact ◽  
The Relationship

Purpose This paper aims to explore the impact of the internet and related information and communications technology developments on how financial services (FS) are distributed and how customers are managed, in particular, not only how companies can differentiate between “good” and “bad” customers and manage them appropriately but also how customers can be “bad” and escape the consequences. It also explores how changes in information asymmetry between suppliers and customers affects who gains or loses from the relationship between them. Design/methodology/approach The data for the article are from the authors’ consulting and conference chairing experience. The article is in the form of a reflection on this, rather than a hypothesis-based research article. Findings One of its findings is that those responsible for controlling damage done to companies by fraudulent or negative value customers (typically those managing underwriting or risk) and those responsible for recruiting, retaining and developing customers (typically marketing, sales and customer service) do not work closely enough together, and this can lead to not only damage to shareholder value but also damage to the customer experience. Research limitations/implications The paper identifies the need for more research covering the processes, data, analysis, systems and strategies required to manage both good and bad customers and the practical problems of implementation. Practical implications The main practical implication is that in designing products and the customer service experience, FS marketers need to take into account much more systematically the “dark side” of customer activity. Originality/value This paper is one of the first to explore its issues in detail.

Executive compensation and firm risk: an examination across industries

2018 ◽  
Vol 17 (3) ◽  
pp. 359-382 ◽  
Author(s):  
Stephen Abrokwah ◽  
Justin Hanig ◽  
Marc Schaffer
Keyword(s):  
Financial Crisis ◽  
Executive Compensation ◽  
Risk Taking ◽  
Financial Services ◽  
Firm Risk ◽  
Content Type ◽  
Risk Taking Behavior ◽  
The Impact ◽  
The Relationship

Purpose This paper aims to examine the impact of executive compensation on firm risk-taking behavior, measured by the volatility of stock price returns. Specifically, this analysis explores three hypotheses. First, the impact of short-term and long-term executive compensation packages on firm risk is analyzed to assess whether the packages incentivize risk-taking behavior. Second, the authors test how these compensation and risk relationships were impacted by the financial crisis. Third, they expand the analysis to see if the relationship varies across different industries. Design/methodology/approach The econometric approach used to examine the executive compensation and firm risk relationship takes the form of two different panel model specifications. The first model is a pooled model using the panel data of executive compensation, the firm-level control variables and volatility of stock market returns. The second model highlights the differences in the relationship between executive compensation and riskiness of firm behavior across industries. Findings The authors find a significant and robust relationship, showing that during the post-financial crisis period firms tended to use long-term compensation shares to reduce firm risk. They also find that the relationship between various compensation components and firm risk varies across industries. Specifically, the bonus share of compensation negatively impacted firm risk in the financial services industry, while it positively impacted risk in the transportation, communication, gas, electric and services sectors. Additionally, long-term compensation share exhibits an inverse relationship with firm risk in the financial services, manufacturing and trade industries. Originality/value The conclusions of this paper suggest that there is indeed a relationship between executive compensation and firm risk across industries. There was a notable change in the relationship however between firm risk and long-term compensation following the financial crisis, where firms used long-term compensation to reduce firm riskiness. In other words, the financial crisis changed the nature of this relationship across S&P 1500 firms. The last key finding is that there exist differences in risk and compensation relationships across industries, and these differences across industries are highlighted across both bonus share and long-term incentive share variables. This is the first study to explore this relationship across industries.

Who Could We Blame? The Impact of Strategic Orientations on the Failure of Financial Institutions

2021 ◽  
pp. 2150011
Author(s):  
Xuan Vinh Vo ◽  
Tuan Quoc Le ◽  
Thi Lam Anh Nguyen ◽  
Hiep Ngoc Luu
Keyword(s):  
Financial Institutions ◽  
Failure Probability ◽  
Operating Experience ◽  
Credit Unions ◽  
Credit Union ◽  
Operational Strategies ◽  
Strategic Orientations ◽  
The Us ◽  
Interest Margins ◽  
The Impact

We evaluate the impact of strategic orientation on the failure probability of financial institutions. Using the US credit union industry as the empirical setting, we find that credit unions which exhibit preferential treatment to borrowers are more likely to fail, whereas those who set operational strategies towards balancing the benefits between savers and borrowers experience a lower failure probability. The impacts appear to be more pronounced in small credit unions and in credit unions which have a lower operating experience. We also find that borrower-oriented credit unions generate lower interest margins while neutral behavior credit unions generate higher margins.

A methodology for enterprise-wide risk assessment in small banks and credit union

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Philippa Duncan
Keyword(s):  
Risk Assessment ◽  
Risk Management ◽  
Money Laundering ◽  
Financial Institutions ◽  
Rapid Evolution ◽  
Credit Unions ◽  
Credit Union ◽  
Content Type ◽  
Financial Crimes ◽  
Compliance Program

Purpose This paper aims to provide an easy to follow, practical guide for small traditional banks and credit unions to conduct an enterprise-wide risk assessment of the financial institution’s anti-money laundering compliance program. Design/methodology/approach Information was collected from relevant documents published by global standard setters in the disciplines of anti-money laundering, financial crime prevention and risk management. The data was integrated with common challenges experienced by small financial institutions to produce an application-based guide that practitioners can readily implement. Findings Though not a new concept, macro-level financial crises and institutional level financial crimes have influenced the rapid evolution of risk management in financial institutions over the past three decades. Small unsophisticated banks and credit unions are expected to now perform an internal risk assessment. An abundance of information is available on risk assessment, but small institutions remain challenged in finding a turnkey document that is readily actionable to stimulate a less arduous undertaking, especially given the institutions’ limited resources. Research limitations/implications The setting reflects small deposit-taking institutions with traditional services. It is tailored for easy understanding and practical use by the institutions. Originality/value This could influence small institutions to conduct enterprise-wide risk assessments and formulate and use more specific risk management policies.

The US department of labor’s final “fiduciary” rule incorporates concessions to financial service industry but still poses key challenges

2016 ◽  
Vol 17 (4) ◽  
pp. 1-22
Author(s):  
Kenneth J. Laverierre ◽  
Matthew H. Behrens
Keyword(s):  
Financial Institutions ◽  
Asset Management ◽  
Financial Services ◽  
Service Industry ◽  
Content Type ◽  
Individual Retirement Accounts ◽  
The Us ◽  
Investment Advice ◽  
Management Recommendations ◽  
The Impact

Purpose To describe the main provisions of the US Department of Labor’s final “fiduciary” rule and its related prohibited transaction exemptions and the key challenges the rule poses for financial advisers. Design/methodology/approach This article describes the impact of the new “fiduciary” rule on broker-dealers, banks and other financial organizations who will, for the first time since the passage of ERISA, be subject to ERISA’s fiduciary standards and remedies when providing investment and asset management recommendations to individual retirement accounts and other retail retirement clients. Findings The most immediate impact of the rule will be on the compensation practices at broker-dealers and other financial institutions and on the fee and revenue sharing arrangements among funds, fund sponsors and the financial institutions that offer investment advice to retail retirement clients. Although the new rule responds to many of the concerns raised by the financial services industry, compliance with the rule will require the restructuring of pay and compliance policies at financial institutions servicing retail clients. Originality/value Practical guidance from experienced ERISA lawyers.

scholarly journals Islamic finance: financial inclusion or migration?

2018 ◽  
Vol 10 (2) ◽  
pp. 277-288 ◽  
Author(s):  
Ahmed Tahiri Jouti
Keyword(s):  
Financial Institutions ◽  
Financial Services ◽  
Design Methodology ◽  
Financial Inclusion ◽  
Islamic Finance ◽  
Islamic Banks ◽  
Content Type ◽  
The Stability ◽  
The Impact ◽  
Practical Implications

Purpose This paper aims to define a methodology to assess the impact of introducing Islamic finance on financial inclusion. Design/methodology/approach The paper is based on a literature review to understand the link between Islamic finance and financial inclusion. The second part of the paper presents a conceptual framework to assess the impact of introducing Islamic finance on financial inclusion in a defined context based on the profiling of people interested in Islamic finance. Findings The paper brings an insight on the impact of introducing Islamic finance. Indeed, it could cause a financial migration to Islamic banks that can take many forms and depends on many factors that call for deep analysis. Research limitations/implications The paper would help financial authorities and financial institutions to measure the impact of introducing Islamic finance on their businesses and the stability of the whole system. Practical implications Islamic finance can not only enhance financial inclusion but also create financial migration. The two implications can vary from one context to another. Social implications Islamic finance can contribute in the effort of including “self-excluded” people with religious concerns as well as people without access to financial services. Originality/value This paper promotes the idea that Islamic finance is not exclusively a way to enhance financial inclusion.

Linking the employee value proposition (EVP) to employee behavioural outcomes

2019 ◽  
Vol 51 (7/8) ◽  
pp. 387-395 ◽  
Author(s):  
Christopher N. Arasanmi ◽  
Aiswarya Krishna
Keyword(s):  
Management Strategies ◽  
Employee Commitment ◽  
Survey Method ◽  
Value Proposition ◽  
Cross Sectional ◽  
Content Type ◽  
Perceived Organisational Support ◽  
Employee Value ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to examine the link between employee value proposition (EVP) dimensions, employee commitment and organisational citizenship behaviours (OCBs) in organisations. Design/methodology/approach This cross-sectional study collected data from 134 employees of a government department using a survey method. The collected data were analysed with a regression method using Statistical Package for Social Sciences version 24. Findings The regression analysis shows that perceived organisational support, and work environment (WE) influence employee commitment. Also, the relationship between organisational commitment (OC) and OCB was found to be significant. The analysis also confirms that OC mediates the relationship between the EVP variables and OCB. Research limitations/implications This study is cross-sectional research, future studies may adopt a longitudinal method or multi-sourced data for further research insights. Due to the adopted research design, the findings should be interpreted with this in mind. Practical implications This study helps to understand the impact of EVP attributes on employee commitment in organisations. The finding would benefit organisations on the need to enhance EVP fulfilment, and its benefits findings from the study show perceived organisation support and WE affects OC while OC affects OCB. It is crucial for organisations to consider and align EVP strategies in their people management strategies. Originality/value This study contributes to the EVP theory by analysing the role of affiliation dimension of the EVP on employee commitment. Prior research appears to have neglected the influence of the EVP on employee commitment.

MiFID II compliance – are we ready?

2015 ◽  
Vol 23 (2) ◽  
pp. 196-206 ◽  
Author(s):  
Lukasz Prorokowski
Keyword(s):  
European Union ◽  
Financial Institutions ◽  
Financial Services ◽  
Global Financial Crisis ◽  
Content Type ◽  
Depth Analysis ◽  
Compliance Officers ◽  
Nascent Markets ◽  
The Global Financial Crisis ◽  
The Impact

Purpose – This paper aims to discuss the impact of nascent Markets in Financial Instruments Directive (MiFID II) initiatives and, thus, to deliver practical insights into MiFID II implementation, compliance and cost reduction MiFID II constitutes the backbone for the upcoming financial market reforms. With the first proposal of MiFID drafted in October 2011, this regulatory framework has undergone over 2,000 amendments. As MiFID II currently stands, this Directive attempts to address issues exposed by the global financial crisis. Design/methodology/approach – This study, based on secondary research and an in-depth analysis of the MiFID II framework, investigates structural and technological challenges entailed by this Directive. The analysis is broken down into the following sections: technological and structural challenges; costs of implementation; MiFID II teams; facilitating near real-time regulatory reporting; increased transparency requirements; and information technology (IT) initiatives for MiFID II compliance. Findings – MiFID II commands significant changes in business and operating models. With this in mind, the study indicates current technological and structural challenges faced by financial institutions and advises on ways of mitigating MiFID II risks. Although it is too early to assess the costs of implementing MiFID II, this paper suggests ways of reducing MiFID II-related costs. The study also advises on organising dedicated teams to deal with MiFID II. Furthermore, this paper argues that early investments in IT systems and processes would allow financial services firms to gain a competitive advantage and, hence, scoop up market share or launch new, lucrative services – especially in the area of collateralisation and market data processing. Originality/value – This paper shows that the current version of MiFID II still requires a great deal of attention from the regulators that need to readdress contentious issues revolving around the links between MiFID II and other regulatory frameworks such as European Market Infrastructure Regulation and Dodd–Frank. This study addresses the MiFID II compliance issues by adopting European Union and non-European Union banks’ and asset managers’ perspectives and, hence, delivers practical implications for risk managers and compliance officers of various financial institutions.

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