It explored the implications of this decision on the members and why some credit unions and caisses populaires have chosen to do away with these payments.
The article reported that several credit unions and caisses populaires in Ontario and Alberta have made the decision to eliminate their dividend programs. This means that members will no longer receive any financial returns, as the profitability of the institution is instead retained by the institution itself. The vast majority of the money made is used to fund operational costs, such as salaries for employees and investments in new technology.
The article further discussed the reasons why some institutions are opting to forgo dividend payments. These include increased competition in the market, with some institutions being forced to focus on cost-cutting measures in order to remain competitive. Additionally, the article highlighted the need for credit unions and caisses populaires to invest in digital technology in order to keep up with the changing banking landscape. This has resulted in some institutions needing to utilize their existing profits in order to fund the necessary improvements.
Furthermore, the article claimed that while member dividends have been seen as a form of recognition from the institution to its members, there are other, more-substantial ways which credit unions and caisses populaires can compensate customers. For instance, many institutions now provide customers with loyalty programs and reward options that are similar to the rewards programs offered by standard banks.
Additionally, the article argued that members should not be overly concerned about the withdrawal of the member dividends, as long as they are still receiving the same services they would have been receiving otherwise. According to the article, members should instead focus on the quality of service they receive, as well as the expertise, professionalism, and customer service they experience when dealing with their credit union or caisse populaire.
In conclusion, the article ‘The Coming Death of Member Dividends’ explored the implications of the withdrawal of this program from some credit unions and caisses populaires. It discussed the reasons why these institutions are doing so and made the argument that customers should not be overly concerned, as long as they are still receiving the same services they would have been receiving anyway. It emphasized the need for institutions to invest in digital technology in order to remain competitive and for members to focus on the quality of service they receive, as well as any other rewards or loyalty programs they may be offered.
In this day and age, many credit unions and caisses populaires have chosen to do away with member dividend payments in order to remain competitive in the banking landscape. With increasing competition, these institutions have had to focus on cost-cutting measures and invest in digital technology in order to stay afloat. Consequently, members will no longer receive financial returns, as the profitability of the institution is retained by the institution itself. There are, however, other ways in which members can be compensated, such as loyalty programs and rewards. Ultimately, members should focus on the quality of service they receive, as well as any additional rewards they may receive, rather than the elimination of member dividends.
This article was contributed on Sep 20, 2023
