Finding financial well-being for all
How credit unions can connect with—and address the needs of—everyone.
Fostering financial well-being for all is a key component of credit unions’ mission and is crucial to the industry’s survival, says Mike Schenk, CUNA’s chief economist and deputy chief advocacy officer.
“Financial well-being is part of the fabric of our members’ lives—access to housing, food, transportation, education, health care, and so on,” says Schenk, who addressed the CUNA Marketing and Business Development Certification School. “Financial literacy is just the tip of the iceberg.”
Schenk defines financial well-being as “how one feels about their money and the choices they can make with it.” This varies from person to person.
Some people have thousands of dollars in savings and feel stressed about money while others are content to have $10 in savings, notes Andrew Manthei, business development specialist at GreenPath Financial Wellness, a CUNA alliance. “That’s the quirkiness of people. Credit unions need to identify what they’re looking for and how they’re engaging.”
The goal of financial well-being for all is to encourage people to have those conversations with credit unions. Schenk cites Financial Health Network research which shows roughly two-thirds of people in America are financially unwell (i.e., “struggling” or “just getting by”) and that 73% of Americans rank finances as their No. 1 stressor.
Women and people of color are most likely to struggle financially. Financial Health Network reports 72% of women are not financially healthy, as well as a significant portion of Black (83%), Hispanic (76%), and Asian American (70%) consumers.
“Disparities have been obvious for decades, and they’ve grown in the wake of the COVID-19 crisis,” Schenk says.
Therefore, credit unions must strive to ensure members can access the services they need.
“We have an opportunity to ensure our relevance and increase market share,” says Susan Toalson McGinty, senior vice president and chief development officer at $462.6 million asset U of I Community Credit Union in Champaign, Ill. “We know America has a money problem, and we have an opportunity right now to do it. This is what we’re chartered to do, this is what we need to do.”
Credit unions also need to find a younger consumer base. In 2001, the average age of a bank customer was 50.7 years old and 44.1 years for credit union members. That’s risen to a respective 52.1 and 51.2 years today.
Younger consumers are more likely to borrow, says Katie Gallagher, vice president of customer success at Zogo, a CUNA strategic services alliance provider, which helps credit unions educate, engage, and attract young people.
Generation Z—individuals between nine and 23 years old—makes up 32% of the global population and has $143 billion in spending power.
Gallagher offers three ways financial institutions can reach this group:
- Meet them where they already are. Optimize your online presence and mobile viewing experience while projecting transparency.
- Empower Gen Z to champion financial well-being. Hire brand ambassadors who advocate for credit unions. “What sets Gen Z apart is that they are most impacted by other people, especially friends and family,” says Gallagher. “They care about peer referral, sharing with peers, and being part of a collective.”
- Offer less lecture and more open dialogue. Create conversations with potential members by asking what they want to learn and tying it back to you.
“Eventually we’ll be able to check in with a text message, ‘how are you feeling about your finances?’” Manthei says. “If they’re feeling stressed, we can have off-ramps that lead to a human or we can have a digital experience take them down another learning path.”
Schenk stresses that policy makers increasingly demand proof of mission fulfillment.
“In today’s world of advocacy, an absence of demonstrable impact makes expanding credit union powers and removing barriers difficult,” he says. “If you focus on financial well-being and make it obvious to your members that you care deeply about where they are from a financial perspective, it stimulates relevance in the marketplace.
“Doing this right is key to our industry’s survival.”