A handful of credit unions are working with behavioral researchers to better serve their members.
These credit unions are designing and testing solutions to improve the financial well-being of their low- to moderate-income communities by working with the Common Cents Lab, which is part of the Center for Advanced Hindsight at Duke University.
Common Cents Lab starts with the premise that, in the real world of decision-making, people are less like the logical Star Trek character Spock and more like the more impulsive cartoon character Homer Simpson, says Mariel Beasley, the lab’s co-director.
“We act on things more immediately,” Beasley told attendees at the 2016 CUNA Community Credit Union Conference and The Federation 2016 Annual Meeting in Dallas.
Knowledge alone does not lead to behavior change, she says. A person’s environment has a profound effect on decision-making, including timing, the way the choice is presented, and societal norms.
That’s where the Common Cents Lab comes in. The lab, which is supported by the MetLife Foundation, tries to bridge the gap between people’s good intentions and actions.
Common Cents Lab is working with several credit unions to:
Common Cents Lab uses a three-prong approach to address Americans’ lack of financial security, especially among low- to moderate-income consumers:
1. Create partnerships with organizations such as credit unions;
2. Create customer-facing products from the ground up; and
3. Disseminate research broadly to industry thought leaders.
Some examples of Common Cents Lab’s efforts include encouraging people to:
The partnership shows potential for Latino Community Credit Union, says Silvia Rincon, director, office of the CEO, for the Raleigh, N.C.-based financial institution.
The credit union is learning how small interventions can nudge members to save more of their paychecks and deepen their financial relationship with the credit union.
Rincon likes that the credit union is a true partner with Common Cents Lab.
“We are part of the process and we are very engaged,” she says. “Our employees are very engaged.”