The COVID-19 pandemic showed us, more than ever before, the need for financial security and mobile services. It’s about pushing demand for more innovative financial products and services while necessitating the importance of credit unions to increase their drive for improved member engagement in a crowded and competitive financial services market.
The COVID pandemic only exacerbated the stakes by accelerating the financial insecurity and lack of stability facing millions of American households even prior to the virus’s worldwide spread in late 2019 and early 2020. Between March of 2020 to early 2022, millions of people – inordinately women – left the workforce to care for their children or elderly family members. Millions of those working in service industries – especially individuals of color – are still dealing with the repercussions of losing their sources of income. All the while, hundreds of thousands of families are processing the death of at least one family member.
Even as we witness our nation’s economic and civic recovery, the long-term well-being of millions of lower-income households and depressed communities will continue to balance on a knife’s edge. As we respond to this latest challenge and emerge from this pandemic, credit unions are reviewing their organization’s processes and functions by taking a good, hard look at incorporating additional member value focused on providing support for their life or career transitions, expected or unexpected.
Easier said than done. How can your credit union continue to innovate your organization to meet your members’ financial health requirements in their time of need?
Refocusing for the betterment of members’ financial health
In the middle of the pandemic, April 27, 2021, Filene’s Lives Interrupted: Bridging Financial Transitions event examined how members’ and consumers’ well-being is being altered by broad shifts in the American economy and society.
Viewers were treated to solutions for how credit unions can reorient their organizational focus on financial well-being that can take advantage of the benefits of supporting members through such changes. The core of the discussion focused on three specific life transitions centering around work, health, and justice:
- What are the challenges that newly perilous on-demand workers face, and how may such challenges soon affect a greater segment of the American working public?
- How does health care shape the financial decisions we make? How can credit unions help members discover more control over their financial, physical, and mental health?
- How can credit unions learn to better embrace financial inclusion by working to solve the economic burdens exacerbated by the criminal justice system?
Work, Health, and Justice: Smoothing out these life transitions
Work
As we suspected before the start of the pandemic and what we fully realized during the crisis, the nature of work itself is changing; more flexible, open-ended, and unpredictable. According to Dr. Mary Gray, Senior Principal Fellow at Microsoft Research on-request, individual task labor represents the future of work across industries. These workers will deal with the dismantling of consistent work and the devaluing of “task-based services.”
In serving and mentoring these workers, credit unions have the distinct opportunity to support them in their search to establish and routinely maintain financial stability in lieu of a potential lack of a social safety net. Credit unions can offer products and services that can focus on identity security, payment systems, income and saving, and community-building.
Health
Many individuals, whether they have or don’t have adequate health insurance, often struggle to organize their decisions on their immediate or long-term needs. Filene reported how even middle-class workers with health insurance struggle to pay for health care. The challenges are well-known at this point: between 2004 and 2018, average out-of-pocket health care costs nearly doubled from $2,600 to $5,000. Those figures come after 60 percent of Americans have suffered at least one chronic condition, with 42 percent dealing with multiple chronic conditions.
Uncertainty and a lack of transparency in health care costs means that individuals too often manage the difficulties of their health issues by delaying such necessary care as dental work, mental health, or chronic conditions. The Filene event’s attendees were shown how credit unions can help their own employees tackle these issues, and then communicate those out to their member communities.
Justice
For an increasing number of people, incidents with the justice system can unfortunately snowball into deep financial fallout. The population of individuals who have dealt with the criminal justice system is not small, and disproportionately impact communities of color. One in three adult Americans possess a criminal record; that’s more people than have earned a college degree. Eleven million have had their driver’s licenses suspended because of unpaid fines. The point to all this is the financial consequences are alarming. Those drivers? Forty-two percent of those who lost their license lost their job, according to Slate in 2017.
The good news is credit unions are positioned to help vulnerable communities with a criminal record and their families move forward following a legal setback. Planning how to meet consumers’ needs as they confront multi-faceted obstacles will help credit unions level-up their member experience initiatives across their life transitions and allow them to eventually achieve all of life’s “firsts” they may have missed; college, their child’s college, that first home, or retirement.
The focus on serving true financial inclusion to the least of us ensures credit unions can offer improved products, services, and improved financial health to all of us.
