Business View Magazine | July 2020

38 BUSINESS VIEW MAGAZINE JULY 2020 ALL I ANT CREDI T UNION union serving employees of United Airlines, and later their family members, for 68 years. When United was in bankruptcy following 9/11, and around the time I joined the company in the spring of 2003, the Board was considering their options and had come to the conclusion that exclusively depending on one company in one industry was probably not prudent. So we made the decision to diversify our sponsorship and membership, but we liked the sponsor-based model. A lot of credit unions confronted that issue, particularly, if they had a sponsor that was shrinking, or bankrupt, or acquired by another company – what were their strategic options?” Many credit unions decided to adopt a community model, a more “traditional” banking model, serving a specific geography, typically by deploying physical branches. As Alliant assessed the options, they preferred a sponsor-based, employee benefits strategy, where they partner with companies and membership associations and other organizations to offer Alliant’s products and services to those employees or members. “We liked that model,” says Mooney, “because we saw it as less of a red ocean. I grew up in a traditional retail banking world at JPMorgan Chase and predecessor institutions, where product, price, and promotion are generic. Your choices, the selection, is all about branch location. Your market share, essentially, is equal to your branch share. And if you look at retail banking now, that’s largely the case when you exclude the direct banks. So, the way you grow is by deploying more branches. Which, if everybody else is doing it, nobody benefits and you end up with overcapacity, which is what we have today. It’s an arms race, and nobody wins but everybody spends more.” Alliant was good at the wholesale employee benefits model because the credit union has a very strong financial value proposition, historically based on very high deposit rates, now also more balanced between the financial rewards to borrowers, as well as savers. That