It’s Elementary, My Dear Watson!

Don’t assume members know ‘the obvious.’

January 28, 2013

A visit with my parents always includes the retelling of stories. One was of a nighttime check deposit mission gone hideously awry.

A few years ago, Dear Old Dad needed a check deposited. It was after hours, so he asked that Mom drop the check and deposit slip, safely enclosed in an envelope, in the drop box outside the teller window as she visited a friend. She agreed.

Mom was confused upon arrival. Two devices were at the outside teller window: a drop box and an ATM. It was dark, Mom was in a hurry, and she shoved the envelope in the ATM slot rather than the drop box slot. Then she drove off into the night.

Sadly, Dad suffered an overdraft the next day and visited the institution to make account inquiries. It was soon discovered that his check had not been received, and the ATM was strangely jammed.

The situation was quickly rectified with the help of a friendly technician and a bit of tape on the mangled check. But I wonder: how often are “the basics” a mystery to members?

What is a personal identification number? How to best answer the “debit or credit?” inquiry posed in stores? How does online banking work? What can be accomplished at an ATM? Where are the ATMs located? Is there more than one way to apply for a mortgage? How will they know?

‘Restatement of the obvious is the first duty of intelligent men.’—George Orwell

Did you know “New ATMs Dispense $1 and $5 bills”?  This convenience factor is important for consumers, and institutions “have been launching ATMs that churn out exact change to the dollar.”

In the past year and a half, Chase has initiated nearly 400 such devices and expects to double this number by year end. These machines are “next generation ATMs or new teller platforms” and other services offered will include credit card payments and loading of prepaid cards.

ATMs are also sources for fraud innovators, as “Bold New ATM Schemes Prompt Warnings.”

ATM skimming is yesterday’s news in light of high tech ATM fraud that entails elaborate cash out schemes. “Organized criminal groups…have been plundering cards and accounts by penetrating internal networks at financial institutions.”

Institutions are urged to “review their monitoring for transaction velocity” as fraudsters access authorization systems to “manipulate daily withdrawal amount limits and card balances…to facilitate massive fraud on individual cards.”

‘There is nothing more deceptive than an obvious fact.’—Arthur Conan Doyle

Obviously, many consumers depend on their 401(k)s for a healthy retirement. Perhaps not so obvious is the questionable state of these accounts and how consumers manage them. Boston College has several studies providing insight.

See “401(k) Participant Behavior in a Volatile Economy” to learn how the recession has impacted 401(k) participants. Noted:

Furthermore, “401(k)s Bleeding Cash.” Graphics here illustrate that 52.8% of payouts go to cover bills and debts, and one of four U.S. households with 401(k)s tapped them to ease costs of necessities.

“These grim statistics throw weight behind those who argue we are watching a retirement crisis unfold in slow motion. The pressures on saving are aggravated by stubbornly high long-term unemployment… But the Great Recession isn’t the only culprit.”

Declining wages, dependence on credit cards, and escalating health care costs are also contributors.

One last retirement fund insight: “410(k) Mutual Funds Mediocre.” Performance of mutual funds in 401(k) holdings has been lackluster, though not horrid.

Consult this research to learn about the many variants affecting investment performance. One conclusion is that in certain circumstances, “401(k) participants usually could’ve done better by keeping it simple and investing in indexes.”

‘The obvious is that which is never seen until someone expresses it simply.’—Khalil Gibran

Credit cards obviously are important financial resources, but different consumers use them in various ways. Awareness of these differences will allow issuers to appropriately respond to consumer wants and needs.

Young People Paying Off Card Debt More Slowly” says a study from Ohio State University.

Youthful borrowers tend to have larger debt and pay it off more slowly. “Someone born from 1980 to 1984 has credit card debt substantially higher than debt held by the previous two generations; on average, about $5,000 more than his or her parents at the same stage of life, and about $8,000 more than…grandparents.” Student loan debt may be a contributor to this issue.

Also, examine “How Different Demographics Use Credit Cards” Here we learn “the average U.S. household had $14,478.78 in credit card debt in 2012 and that 46.7% of U.S. households carry credit card debt.”

The article identifies credit card user types by socioeconomic and demographic characteristics. “Rustbelt retirees,” for instance, “are 1.5 times more likely than the average American to charge $111 or less per month on their credit cards.”

Meanwhile, those charging $700 or more monthly “likely live in neighborhoods dominated by Connoisseurs, Military Proximity, Silver and Gold, Suburban Splendor and Top Rung.”  With the exception of the Military Proximity group, these card users are largely affluent consumers in their 40s, who hold “professional or management positions, and live in large, luxurious single-family homes in established suburban neighborhoods.”

Maps may help you identify the type of credit card user in your neighborhood.

‘No question is so difficult to answer as that to which the answer is obvious.’—George Bernard Shaw

Don’t assume that members know “the obvious.”

What disadvantages do members suffer without understanding basic information about your technology offerings, services, or products? Can this blissful ignorance impact your credit union in a negative way?

How might you easily communicate basic features and functions in a welcoming way? Will consideration of “the obvious” things you do prompt you to change any established practices or think about assumptions you may have of the membership?

“To spell out the obvious is often to call it in question.”—Eric Hoffer






Lora Bray is a research librarian at CUNA.