The New Year has arrived and credit union executives across the country have prepared new goals, strategies, and resolutions for continued growth in 2020 and beyond.
Burgeoning and innovative tech has changed how CUs offer products and services, including the introduction of remote customer service via video conferencing for online customers. In 2020, the CU industry will witness growth particularly in the area of digitally automated services that relieve time-consuming and manual decisioning like auto, mortgage, or personal lending decisions or fraud detection.
Perhaps the most important long-term points of emphasis is getting back to the basics of financial literacy for their communities. Despite America’s economic growth during the last decade, families are struggling with debt, accompanied by stagnating wages versus rising inflation.
We continue to believe CUs remain the perfect local vehicle with which to provide financial support for hardworking Americans. In that spirit, we offer three 2020 new year resolutions for CU executives designed to increase their communities’ financial health:
#1 — Commit to helping members with financial literacy
With President Franklin D. Roosevelt’s signing of the Federal Credit Union Act in 1934, CUs were by nature designed to promote prudence, economy, care, and consistent financial literacy when it came to doing what is best for individuals and their families. Statistics show Americans need this help now.
CareerBuilder’s 2019 statistic found 78% of all Americans live paycheck to paycheck. That statistic is not relegated to the middle and lower classes. Ten percent of workers earning $100,000 or more also live paycheck to paycheck. Twenty-eight percent of workers making $50,000-$99,000 deal with the same issue.
In a 2014 Consumer Financial Literacy survey, only about 2 in 5 adults have a budget and keep track of their spending habits. Additionally, 75 percent of respondents said they could benefit from advice and answers to everyday financial questions from a professional.
CUs are perfectly positioned to do something by taking advantage of the contemporary off- and online tools available. Confidence in CUs and their staff is high; 64% of CU members believe community-oriented financial institutions provide better customer service than national financial institutions. This is because CUs look to serve their membership at every turn and have the added advantage of being more flexible in assisting with member needs and requirements. And that includes utilizing all accessible member service communications channels. Digital marketing assets like social media, dynamic websites, and email newsletters are crucial channels to keep members top of mind and engaged.
However, let’s never forget the everlasting power of in-person communication and interaction is still required in this “Age of Information.” In fact, despite what popular culture would have us believe, CBI – please spell out unless you used above, which I don’t see – found more than two in five millennials, or 42%, prefer to receive financial advice in person as opposed to other, less direct methods like phone, online, or mobile app.
#2 — Offer a small dollar loan program as a first step
The journey back to financial literacy and health for the underbanked and unbanked often begins with access to some form of short term credit. It’s difficult to concentrate on one’s financial wellness objectives if they’re still sweating over paying overdue bills. Financial stress and panic can easily take them off their game.
In May 2018 Joseph Otting, Comptroller of the Currency, sent a letter to CUs urging them to provide short term, small dollar loan installments to members.
#3 — Offer a financial wellness app based on cognitive behavioral therapy
In the 2010s, financial technology (fintech) firms fundamentally changed the way CUs are able to provide information, banking options, and the tools for consumers and members to interact, organize, or make changes to their personal finances. New innovations benefit both CUs and their members by expanding access of financial services, including financial literacy and wellness apps designed to help people take control over their spending and budgeting habits.
The truth is 17% of Americans are financially vulnerable, while 46% don’t have emergency funds available to cover a $400 emergency. Tools can do little if financial literacy is lacking, particularly when 33% of American adults have no money saved for retirement.
Fintech solutions in financial literacy and wellness are designed to help strengthen the financial future of families and the communities in which they live by being available wherever they are. Digital apps such as QCash Financial’s recently released financial wellness app will help your CU members achieve financial stability and resilience by utilizing the principles of cognitive behavioral therapy and behavioral economics. The app provides real-time feedback and one-on-one financial coaching. For more information on QCash Financial’s lending and financial wellness app, click here or send an e-mail to email@example.com. We look forward to speaking with you and Happy New Year!