Folks in the financial industry love to talk about innovation, usually in reference to fintech. But innovation isn’t always flashy. It doesn’t have to involve technology, nor does it always represent a tremendous break-through. Sometimes innovation can be incremental.
Or, as George Hofheimer, EVP of Research & Development at Filene, put it in one of our recent podcast episodes, the “coolest innovation… is usually the most boring innovation.”
Credit unions and community banks often don’t get enough credit for their innovations; some don’t even recognize that they are innovating. From a marketing standpoint, developing new, even unexpected partnerships, can be a key to unlocking all sorts of innovative strategies that don’t require a mobile app.
In the same podcast episode, George also advised that during these tenuous times, credit unions would do well to focus less on differentiation and more on collaboration.
After all, as member-owned cooperatives, credit unions are founded on a collaborative mindset, and collaboration is rife with opportunities for innovation. Read on for some of our favorite examples:
1. Transformational Deposits
Hope Credit Union, which serves one of the most impoverished regions in Mississippi, has launched a $100 million initiative to make more business, mortgage and consumer loans to low-income families. Not only are they partnering with Netflix, which contributed $10 million to the program, but they have launched a Transformational Deposit program to “import capital” from other (wealthier) communities.
2. Income Advance Program
Can credit unions partner with businesses to help their employees be more financially secure, and to increase profitability for the business and the credit union? In a word, yes. NorthCountry FCU partners with Rhino Foods to guarantee Rhino Foods employees same-day access to $1,000 for emergency needs. The advance is 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.
3. Overdraft Line of Credit for Stimulus Checks
After Jill Castilla, CEO of Citizens Bank of Edmond, responded to a tweet by entrepreneur Mark Cuban, they ended up partnering to create an overdraft line program for the bank’s customers who were waiting for their stimulus checks. Cuban and Castilla were able to launch the program in just a few days, allowing customers to overdraft their accounts by up to $900 without penalty. (Castilla joined our podcast in 2018 to talk about other innovative partnerships she implemented while leading the bank’s turnaround.)
4. Transformational Wellness Program
Allegacy FCU (a PixelSpoke client) has long focused on “wellness of mind, body, and wallet” with innovative products like the All-Health Savings Account. In collaboration with its local YMCA, Allegacy rewards members for their visits. The credit union took its commitment to wellness one (sizeable) step further through a partnership with Wake Forest Baptist Health. In 2018, they launched WellQ, a preventative healthcare center that focuses on physical and financial well-being.
5. Community Relief Grants
Sometimes the best partners are your own members. Just after the onset of COVID-19, SECU Credit Union realized that grants would be much more beneficial to their members who were experiencing financial hardship than loans. They launched a $500 Relief Fund Grant Program, actively soliciting contributions from members who have the means, then matching their contributions. Members ultimately contributed over $53,000!
Somewhat paradoxically, collaboration has the potential to help you differentiate, particularly if your partnerships are unique and benefit your members in ways that will inspire word-of-mouth marketing. As you approach the 20201 planning season, think about how to not only weather the current storm but come out stronger on the other end of it.