Financial Wellness, Member Engagement & Deposit Growth Remains Top of Mind for Credit Unions, But What Does That Look Like?

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Article originally published in Credit Union Business News.

Financial wellness tools, member engagement and deposit growth strategies continue to dominate discussions. Just flipping through industry news, you’ll see numerous stories centered on these trends – and this makes sense:

The National Credit Union Administration (NCUA) reports that loan demand is slowing while delinquencies are at an all time high. The savings rate is an all-time low while employment experiences concerning turbulence. Overall household debt just reached $17 trillion. As we inch closer to an election season, there remains tremendous uncertainty.

Meanwhile, the regulatory landscape remains rigorous. Regulators are focused on overdraft and NSF fee income and proposing radical changes to fee structures. There is even debate on giving consumers the option to use credit cards to avoid overdraft fees. At the same time, big banks are being hammered for extremely high interest rates on credit card products, regardless of the individual’s credit risk profile.

Ultimately, neither scenario is in the consumer’s best interest. And it’s not going to be in the credit union’s best interest either. Members are already navigating massive debt. Paying late or NSF fees or high interest on additional debt isn’t good for anyone.

Instead of debating which type of penalty is best, credit unions should focus on helping members better manage loan payments to minimize delinquencies and help them to strengthen their overall financial stability.

This is especially critical for younger generations like Millennials and Gen Z. By becoming an integral part of their financial success, credit unions can redefine themselves among these groups and live up to their mission of being relationship-centric versus transactional. They can also meet them where they are, which is primarily their phone. In fact, according to a recent Chase survey, 99% of Gen Z and 98% of Millennials use a mobile banking app for most financial tasks.

Engagement Platforms Can Support Financial Stability & Strengthen Competitiveness

With the right tools, credit unions can help drive member engagement through actionable solutions that automate savings, increase loan eligibility and improve overall financial health.

An ecosystem approach to member value, credit unions must focus on three key pillars of financial wellness automation: AI and automation tools, guidance and ongoing engagement. Credit unions can go beyond static financial literacy tools and offer members a way to automate better financial habits.

Through a conversational, dynamic personal financial advisor, credit unions can make reliable financial guidance accessible to their members. Credit unions can better assess members’ financial goals through interaction and the collection of relevant information, and then guide users to the appropriate actionable applications, such as a debt management solution, automated savings, or a loan officer to refinance existing loans.

Additionally, credit unions can empower members to make flexible, incremental payments by taking a single monthly loan payment and dividing it into two, three, or four debits throughout the month, or syncing with their payday. This allows members to ensure payment obligations are met without the struggles or added stress.

Credit unions should also apply this same approach to savings, allowing members to direct additional money to savings, such as towards a down payment on a home, emergency savings, or any other financial goal. Members can also opt to round up debit or credit card transactions to the nearest whole dollar. This helps members increase savings while also serving as a way for credit unions to boost deposits. By standing up a financial stability automation infrastructure, credit unions can attract and retain members, including those ready to forge a path to homeownership.

Ultimately, high levels of debt impacts members in numerous ways and hinders homeownership.

Consumers already owe trillions of dollars on credit cards, vehicles and student loans. Credit unions should therefore focus on solutions that support members by automating their ability to save, manage monthly cash flow, and build their credit score through timely bill payments. As a result, they can improve their financial health and performance, providing value for both the member and the credit union.

About Author:

Brian Gunn is Chief Revenue Officer of EarnUp, a financial wellness fintech company. EarnUp can be offered as a suite, individual components, or special programs. With a fast, easy onboarding process, the platform requires little to no technology resources. Credit unions can see an immediate, measurable impact that results in high satisfaction rates. Furthermore, it is appropriate for all ages, levels of financial literacy and life stage. 


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