Walking the Walk of a Minority-Minded Partner

Industry chatter around how to attract and retain membership is as deep as it is wide. The demand for a more modern banking experience is only growing more urgent and poignant, challenging credit unions to evoke their people-helping-people philosophy and community-centered values with every interaction, in-branch or digitally, and to every member segment. When it comes to supporting and understanding the financial needs of minority groups within their communities, credit unions are particularly well-suited to answer the call.

Technology doesn’t replace face-to-face interaction; instead, it helps credit unions better communicate, engage and – in the case of some members – restore trust. As the financial services industry modernizes, reaching members is about creating interactions that are useful as well as appropriately simple, relevant and seamless. It is about providing real value to each member at a moment of need and within the channel they choose.

There’s a California credit union that has embraced this philosophy, and its membership consists largely of Hispanic members, the second-fastest-growing racial/ethnic group in the country according to the U.S. Census Bureau. This institution has a student-led high school branch to teach financial education and foster relationships with this local underbanked population, one which has historically lacked trust in financial institutions. In fact, the latest figures available from the FDIC reported that 14% of Hispanic households were underbanked (in 2017). This credit union is working to improve its digital touchpoints and deepen the relationship with these members, and ultimately help restore trust for future generations. Part of this broader digital strategy involves creating a portal specific to its Hispanic members, housing important financial information in Spanish and providing its local Spanish-speaking community a safe, familiar way to engage with the credit union.

Despite any cultural differences and language barriers, this credit union is using technology to ensure this group feels understood, valued and confident, in areas ranging from addressing financial concerns and security to preparing for long-term success.

Or, take another credit union – located in the Deep South – that serves minority groups in more poverty-prevalent areas, using a combination of high-tech, high-touch to promote financial awareness within these communities. Headquartered in a region where in many counties the poverty rate has exceeded 20% for five decades, the credit union provides access to financial products and services designed to better the livelihood of its members. Out of its 29 branches, the credit union offers affordable homeownership and housing options, fosters asset development and strengthens infrastructure within local economies.

The credit union also understands lower-income households in its communities are replacing wired phones with smartphones. For example, Mississippi has the largest percentage of wireless households in the United States. In response, it has deployed a money management app to help these individuals plan, save and manage financial spending and habits. For instance, the credit union offers accounts to save and earn interest at the regular savings account rate with no monthly fee to avoid the financial stress of the holiday season. And like the first credit union example, this institution teaches children how to manage money at an early age to prepare for a better financial future with savings accounts and financial education programs; research shows children who have a modest savings account can increase the likelihood of reaching financial security and graduating from high school.

And finally, there’s a St. Louis, Mo., credit union that is reaching 98% of its city’s population within two miles of a branch, having full-service financial support in areas with little to no access to mainstream banking. This community development financial institution is a Low-Income Designated credit union and one of the largest minority depository institutions in the United States. As part of its overall giveback initiatives, the credit union offers specialized financial and credit-building products designed for the unbanked or underbanked members needing a second chance. Because the credit union has a complete view of a member’s financial information, it has been able to invest in those who need it most.

It offers checking services for members with past account management problems, including no minimum balance requirements. This second-chance account is equipped with checks, a debit card and direct deposit capabilities, without the added fees and expenses. There is also a loan alternative available with lower rates, longer terms and the ability to save money at the same time – while helping members avoid high-cost lenders. Many of these individuals have a poor credit score, so the credit union provides a service to inform members of where they stand financially and recommend tailored solutions. There is even a credit-building loan available to any member within the institution, making financial stability possible for everyone.

These are a few minority-minded credit unions that have chosen to take the time to understand their members and extend the proper tools and resources required to make a difference in their lives. Whether they come from different backgrounds, struggle to find financial stability or simply lack the finances needed to overcome adversity, every credit union member is part of a larger community filled with goals and aspirations. Credit unions can fulfill them by providing equal access to economic opportunities and the financial resources to succeed while preparing for future membership.

Ted Bilke is the President of Symitar. He can be reached at tbilke@jackhenry.com.