I doubt there’s a credit union in existence today that would claim financial wellness isn’t important. It’s something every credit union is working toward, in some form or fashion, and something every credit union wants for its members.
But I believe credit unions could be doing more. A lot more. It bewilders me that financial wellness is often treated as separate from a credit union’s bottom line, rather than the driving force. After all, if every resident of the region a credit union serves were financially thriving, that would mean a lot more deposits and a lot more eligible loan applicants.
So how can we center financial wellness to inform your strategic planning, increase financial literacy, and grow your membership? It all starts with flipping the script.
If we say we care about financial wellness, why aren’t we measuring it? Credit unions are drowning in data, and they’re getting better and better at leveraging it to inform their strategies. But the data they typically hone in on isn’t necessarily the data that should be driving a credit union’s measure of success.
What we typically see:
Many credit unions leverage demographic data from their region to inform personas—that is, fictional characters that capture common needs and goals for different target audiences. At PixelSpoke, we use personas during the first phase of our website redesign process, and we find them helpful for guiding decisions around copy, design, and user experience.
We also look at digital engagement data before and after a website launch. This tells us how people are interacting with the website, whether or not prospects are converting, and where people are dropping off. Digital marketing analytics can also help you gauge the success of your marketing campaigns and the user friendliness of your digital tools.
Meanwhile, transactional data offers insight into spending trends and buying behavior. This data can drive decisions about which products and services to promote to specific member segments and/or what might be lacking in your current product mix.
Most credit unions also measure member satisfaction in some form or fashion—whether that’s through NPS surveys or other feedback tools. This data can help you determine what to stop or start doing when it comes to member service and where your members are feeling frustrated, confused, or ignored.
All of this is helpful, and I heartily recommend that you continue collecting and analyzing it. But is it getting to the heart of your members’ needs? Does it encompass everything your credit union should be taking into account to measure its success? My answer to both these questions is a resounding no.
What we’d like to see more of:
There’s a million-dollar question that a lot of credit unions can’t really answer: How financially healthy are your members?
And the million-dollar follow-up question: How often, or do you ever, ask them?
Demographic data might give you some insights into your members’ financial health, but it doesn’t necessarily tell you how your members feel about their finances or what their future goals are. Financial education efforts can come across as tone-deaf when they offer generic best practices that don’t take into account the contexts in which your members are operating.
A classic piece of financial advice, often for women, is to stop indulging in that daily latté and save the money instead. But what if you’re struggling to make ends meet, and daily lattés aren’t even on your radar? Or what if you can afford a daily latté and still save a healthy amount of money? What if you appreciate the experience of enjoying it out in the world, and you want to support your local coffee shop?
As world-renowned finance expert Manisha Thakor pointed out in a recent episode of The Remarkable Credit Union podcast, “We talk about [money] in a really judgy way, usually around coffee, which is, to me, sacrosanct. I work on a location-independent basis, so I do a lot of my work in coffee houses. And I will buy a $5 macchiato, which is technically three ounces of liquid, and I will sit there for three hours. And so I’m getting a really good ROI on that.”
Similarly, Ellevest founder Sallie Krawcheck, whose company targets higher net worth women, urges her customers to “just buy the f***ing latte.”
Measuring financial health indicators is really about understanding where your members are at so you can support them in meaningful and relevant ways.
Along with indicators, are you measuring outcomes? Do you know if the financial health of your members is improving year over year? If it’s not, can you truly claim success as a credit union? Many credit unions point to member growth and asset size as indicators of success, along with key ratios, like net worth, efficiency, delinquency, net charge-off, and loan-to-share. Even if all these numbers and ratios are strong, they still don’t tell us if the credit union’s members, as a whole, are financially better off than they were a year ago.
I understand there’s a lot of economic volatility out there that’s beyond our control, but credit unions should at least be analyzing outcomes year over year and committing to improving them. The answer may not lie in your product mix or your member services. I’ve long thought that every credit union should be on the front lines of advocacy efforts to ensure that their state offers a living minimum wage. After all, if every resident of the region you serve earned enough money to achieve financial health, that alone would be worth more than a lifetime of home-brewed lattés.
This isn’t just about your members. What about your team? Does your credit union offer a living wage at all levels of the organization? And can your credit union claim to be supporting the financial health of its community if your own employees aren’t earning a living wage?
Our client Alternatives Federal Credit Union, which started conducting living wage studies in 1994 to address internal employee concerns about compensation levels, is now a Living Wage Certified credit union. While there’s a robust living wage movement amongst credit unions in Canada, here in the United States, Alternatives FCU seems to be the exception to the rule.
As Andy Bandyopadhyay, CEO and Founder of Attune, pointed out in The Remarkable Credit Union podcast, “You would never in a hospital say, oh, well people feel good, so I guess we’re good. We have to start actually measuring the members’ bottom line.”
A lot of credit unions position their financial education efforts as a nice “bonus” to the products that are the core of what they do. But Shawn Gilfedder, President and CEO of Kitsap Credit Union, believes financial education needs to take center stage. As he shared on our podcast, “Our future, and I think the future of many a credit union, is we should be known for (being) promoters of financial wellness that happen to sell retail banking products.”
What we typically see:
The standard approach to financial education at credit unions includes at least one certified counselor on staff, workshops or webinars for members at specific life stages, blog and social media posts that offer financial best practices, and a financial education webpage that consolidates your offerings and links out to partner content.
All of these are solid, helpful resources. But do you know how many of your members are using them? How many members are aware of them? And how are you driving awareness? We find that most financial education resources are underutilized because credit unions are more concerned with driving traffic to their product pages and because we live in a world where people are inundated with digital content. Let’s explore how we can better engage members in our financial education efforts.
What we’d like to see more of:
Member onboarding processes tend to focus on everything the credit union has to offer its members. But what if your entire onboarding process were built not around highlighting your product mix, but instead assessing your members’ financial literacy and health so you can know how to more effectively serve them?
You can even make it fun! This financial fitness quiz from Charles Schwab may not tell your members if they’re compatible with their celebrity crush, but it can tell them how financially healthy they are. This is valuable information for them and for you. And in this quiz from The Washington Post, users learn how to spot scams in a hands-on, lighthearted, non-judgmental way.
When it comes to ongoing engagement, I’d love to see community partnerships and giving efforts that are more directly tied to the financial health of your members. Scholarships and charity donations can be part of these efforts, but all too often, credit unions stop there. I’d like to see fewer one-way giving efforts and more partnerships with organizations that have boots on the ground to assess and address specific financial needs. By teaming up with other credit unions, local businesses, nonprofits, government entities, and advocacy groups, you can expand and amplify impact.
And yes, there are tangible benefits for your credit union, too. Partnerships can expose new potential members to your credit union, increase your credit union’s visibility through press coverage, and also increase member engagement.
Vermont-based NorthCountry FCU, for instance, partners with a local business, Rhino Foods, to guarantee employees same-day access to $1,000 for emergency needs. That advance is then repaid through payroll deductions, and when the loan term is complete, that auto-deduction continues to go into a savings account at the credit union. This not only drives member growth, but helps Rhino Foods employees turn an emergency need into future financial security.
Wisconsin-based Verve Credit Union is partnering with the local police department to tackle fraud. They have created a “Fraud Squad” that presents at local venues, like healthy aging conferences, local libraries, and neighborhood watch groups. Allegacy Federal Credit Union, in North Carolina, took its commitment to wellness to a new level when it partnered with a medical center to launch WellQ, a preventative healthcare clinic that focuses on physical, mental, and financial health.
These are all examples of recruitment and engagement efforts driven by partnerships over products, though some may very well end up informing your product mix. Existing businesses, nonprofits, and government entities know your community in ways you may not (and vice-versa), and by teaming up, you can surface existing assets and needs more effectively.
When Alicia Portada, Former Director of Communications and Community Engagement at LES People’s FCU, joined our podcast to discuss their partnership-based marketing approach, she said, “We don’t want to work in a silo, reading trends and copying what bigger banks are doing. There is power in local approaches.”
When it comes to member recruitment and engagement, many credit unions focus on what THEY have to offer their members. But we like to tell credit unions, “You’re Yoda, not Luke.” You’re not the hero, you’re the guide.
What we typically see:
The vast majority of credit union marketing campaigns are about rates and products. Emails, website messaging, digital ads, and out-of-home advertising often focus on promoting great rates or highlighting special offers. I understand that credit unions, like any business, need to sell products; I also understand that rates and offers can be effective recruitment tools. But this approach can be short-sighted, getting members in the door who may not stay engaged over time.
Many financial institutions also promote themselves with glowing reviews or testimonials. This compelling social proof is undoubtedly powerful. If anything, I’d urge credit unions to be more proactive about soliciting reviews—in an ethical way, of course. But I also see an opportunity for credit unions to take this social proof concept one step further.
What we’d like to see more of:
I get excited when I see marketing efforts that center members and their needs. One thing that we really impress upon our clients when it comes to their websites is the need to lead with financial wellness instead of rates or promos. Members who feel seen, heard, and supported, particularly through the copy and photography in your campaigns and on your website, are far more likely to not only stick around, but also promote your credit union through word-of-mouth. Our clients EastRise, Point West, and Clean Energy Credit Union offer some great examples of website homepages that lead with wellness and purpose.
Another effective tool in your recruitment toolbox? Member stories. This is an example of that testimonial or review taken one step further to center the member instead of your credit union. In this story from DC Credit Union, Edward doesn’t talk so much about the details of his car loan as he talks about what a big deal it was to be able to purchase his first car and the sense of freedom and autonomy that it afforded him.
Speaking of financial milestones, do you take time to celebrate them? As former Filene EVP George Hofheimer points out on our podcast when talking about the significant milestone of purchasing a house, “We go through this whole complicated, convoluted process of getting the house we want, getting the mortgage, signing all of the paperwork, and then the next thing we hear from the credit union is, ‘Hey, your bill’s due. And oh, by the way, your bill’s due for the next 30 years.’”
Our client, the aforementioned Alternatives Federal Credit Union, does something a little different. They partner with local businesses to put together a gift basket, which loan officers deliver in person to the member’s new home. The credit union reports that it’s often an incredibly emotional experience, not just for the member, but also for the loan officer, who is able to see firsthand the true significance and impact of their work. This is a relatively small gesture that members are likely to remember for years to come. They may even post about it on social media or tell their friends!
Your members are counting on you to help them get on a better path to financial well-being. Unfortunately, most financial education programs in their current state just aren’t cutting it. Flipping the script to center financial wellness over products is no small undertaking, and it won’t happen overnight. In this financial wellness roadmap, we outline some of the lower-hanging fruit you can start experimenting with now, and some of the larger tasks to explore down the road.
We can always find ways to do better, and as a result, help our members do better, too.
This article originally appeared in CUInsight.