Credit union focusses on affluent

In central Canada, credit unions tend towards the financial services margins, with their clientele drawn from a particular group bound by employment, or ancestry, or, occasionally, where they live.Not so in British Columbia, where, despite the ubiquity of Canada's Big 5...

In central Canada, credit unions tend towards the financial services margins, with their clientele drawn from a particular group bound by employment, or ancestry, or, occasionally, where they live.

Not so in British Columbia, where, despite the ubiquity of Canada’s Big 5 domestic banks, they more than hold their own.

One of the most successful of these credit unions is Richmond Savings, with its headquarters in the former farming community of Richmond and serving what is known as the Lower Mainland.


Doug Billingsley, vice-president of corporate development for Richmond Savings, says the reason for his company’s success is twofold: the way the credit union markets itself to take advantage of Vancouver, and the Lower Mainland’s differences from the rest of the country.

Billingsley says this market is more affluent and ‘trendier’ than the rest of the country.

However, he qualifies the ‘more affluent’ description by allowing Toronto still has more dollar bills, but many of them are concentrated in such enclaves of the rich as Forest Hill and Rosedale.

Billingsley demonstrates Vancouver’s affluence by pointing to a couple of examples that bear his contention out.

He says 60% of all cars in Vancouver are imports, which generally cost more to buy than domestically built cars.

He also cites this figure to underline his view that Vancouverites and their suburban brothers and sisters are prepared to spend for quality.

The second thing Billingsley refers to is the success of the Seattle-based Starbuck coffeeshop chain.

Billingsley says Starbuck, which targets the well-to-do, crossed the border four years ago and now has 30 coffeeshops in the province.

He says some mornings there are lineups at the coffeeshops, as patrons willingly shell out $3 for their morning caffeine intake.

‘It’s unbelievable how well they have done,’ Billingsley says.

Given Vancouver’s affluence – fuelled, it must be noted, by the huge inflows of investment capital from Hong Kong and the other Asian countries with considerable trade relationships with b.c. – and its residents’ fondness for quality, it is small wonder Richmond Savings has chosen to market itself to the better-off consumer as an institution that caters to quality.

Billingsley says Richmond Savings began in 1948 and now has 50,000 customers serviced by its eight branches in Vancouver and suburban Vancouver, adding two more branches are planned to come on-stream soon.


He says his institution is the third-largest credit union on the Lower Mainland, with $1.1 billion in assets and 350 employees.

Billingsley says Richmond Savings does not attract what might be called the typical credit union customer.

He says this key group is better educated, is more affluent and has more knowledge of investments, pointing out more than 40% of the group also hold equities.

He says Richmond Savings ‘hangs its hat’ on service, and strives to offer a ‘tangibly different experience from the competition.’

The credit union does not compete on price nor does it offer giveaways, he says.

This is in marked contrast to some or all of the big banks, which offer contests, promotions, even fractions of points off mortgages or on certain types of accounts.

Billingsley says to ensure this quality positioning remains in place, Richmond Savings runs quality service checks in all its branches.

It also uses the Palmer Jarvis advertising agency in Vancouver because, he says, that shop understands the credit union’s needs and the West Coast market.

Billingsley says about 40% of Richmond Savings’ new customers come from personal referrals, adding 35% of its customers are now Asians.

He says Richmond Savings gets 10,000 inquiries a week from customers about things such as account balances, funds transfers and the like, and adds it was the first financial institution in the country to bring in ‘touchtone’ [telephone] banking.

Equally flexible is Richmond Savings’ computer technology.

Billingsley says the Pro Logic all-personal computer system is the most flexible around, and allows the credit union to react to changing market conditions quickly.

Billingsley also says more than 2% of his customer base is using a direct debit card for their transactions, double what was expected when the direct debit card test was launched in b.c.

(Direct debit cards are not new on this continent, but remain uncommon. France is the undisputed leader in this deceptively simple technology.

(A direct debit transaction is conducted by running a customer’s direct debit card through a terminal linked to a mainframe computer.

(The mainframe automatically deducts the cost of the customer’s purchase from his or her bank account.)

Don’t assume

As for how he sees the Vancouver market, Billingsley cautions one of the worst things a marketer can do is assume what works at the retail level in Toronto or Montreal will also do well in b.c.

Vancouver, he says, is a segmented market with residents’ buying or service loyalties different from the rest of Canada.

‘It is a highly segmented market,’ Billingsley says.

‘Our operation started out in Richmond, and 10 or 15 years ago Richmond was basically a farming community,’ he says.

‘Today, the population is 35% Asian, so you have a huge Asian population in Richmond.’

‘You have to be very careful in terms of how you approach each one of these individual markets. It won’t necessarily work in Richmond just because of those differences. And what works in Richmond won’t necessarily work in Surrey.’


Billingsley says research conducted by the B.C. Central Credit Union to examine why some people had the wrong idea about this type of financial institution, showed British Columbians are very oriented towards businesses from that province and prefer those – certainly in the financial services industry – that keep their funds in the province.

There is another reason, this one expounded by academics, why British Columbians are different from the rest of the country.

The theory goes that in-migrants or immigrants dissatisfied with the East slowly drift westwards. Once on the Pacific coast there is nowhere else to go, so there is a huge foregathering of the disaffected.

Billingsley says the historic East-West axis does not work for British Columbians any longer.

They now look south, and have as their focus a North-South axis that leads them to Washington, Oregon and California, the three states directly below the border.

‘I wouldn’t look towards success stories in Toronto or Montreal, I would look towards Seattle, Los Angeles,’ Billingsley says.

‘It’s a lot different orientation out here than [in] the rest of the country,’ he says.

Furthermore, he continues, Vancouverites’ behavior has more in common with that of the western states in the u.s. than it does with the rest of Canada.

As examples of this behavior, Billingsley points to the greater value British Columbians place on their recreation time than do other Canadians.

The work ethic is still alive and well in b.c., he says, and the pace of life is not slower, but it is different.