3 Ways to Rethink How Your Credit Union Supports Financial Wellness

With the potential for a recession looming, consumers are shifting their financial priorities. Two-thirds of U.S. adults say money is a “significant source of stress,” according to a survey by the American Psychological Association. Financial stress is even higher among younger adults ages 18 to 43, registering at 82% for ages 18 to 25 and 81% for ages 26 to 43.

Credit unions have a vested interest in helping their members build a stronger financial foundation. Financially healthy members become more engaged members. Increased engagement leads to increased revenue and the ability to cross-sell needed services. When their financial foundation is secure, they are more likely to use additional financial products, such as loans and investments.

Credit unions need to rethink the way they approach financial wellness. Instead of relying on the staid old approach of just sending age-based promotions or alerts about low balances, there are three steps to rethinking financial wellness engagement. Credit unions need to rethink their communication approach, provide members with more relevant data and offer them a financial roadmap.

Provide Better Data (and Context) for Your Member

Due to digital banking, members can easily access their transactional data. What credit unions need to do is put that data into context so they can make informed decisions about their finances. By doing this, the credit union can become a valuable resource for members to gain more insightful information regarding their financial health.

A common mistake is to assume that more data is always better. To truly help consumers understand and improve their financial wellness, credit unions should provide and package data that is easily digestible, relevant to their financial health and filled with insights regarding spending habits.

They should also provide context to the data. This context can help members understand if their spending habits indicate a need to focus on savings, accompanied by resources, products or strategies to increase savings. The credit union could even look at partnering with a bill-saving service or automating bill pay to avoid late fees.

Rethink How You Communicate

Credit unions are always communicating with their members. Whether through advertisements, app notifications or emails, it may seem like communication is already well covered. But all too often, these communications are not personal or ignore tried-and-true channels.

One overlooked tool for helping to build financial wellness is the required monthly statement. The statement started as a way to track the transactional data of an account, which gave members a record of transactions they could use to keep track of their finances. With the evolution of digital banking, members don’t rely on statements for that data, instead, they can see that information in real-time, online or on their credit union’s mobile app.

Since credit unions are still required to produce a statement, they should evolve their statements to serve the current member better. Credit unions can take the data they already have and provide members with a well-rounded view of their financial health.

Help Members Map Out Their Path

Once members have relevant, contextual data, and it’s being delivered in a way that is clear and convenient, the final step is for credit unions to help members map out their path. While this piece of a financial well-being strategy may require the most resources, the payoff could be very strong. According to BAI’s 2023 Banking Outlook research, a mere 44% of Gen Xers, 40% of millennials and 33% of Gen Zers have only one financial services organization.

The same survey found that the number one thing Gen Zers would like to make their digital banking experience better is personalized suggestions. All generations have listed, “Give me tools to customize my experience,” as a way to improve the digital experience.

Encouraging loyalty in an environment where consumers are becoming less and less loyal is important to remain profitable. Consumers are eager for financial direction and insights, and credit unions are doing a disservice to their members by not meeting that need. By offering tools to help them reach their goals – whether it’s savings, budgeting, investing or borrowing for a major purchase – credit unions can help their members grow their wealth, which will in turn help the credit union for decades to come.

Griffin McGahey is president at HC3, a Birmingham, Ala.-based company that manages complex data to help financial institutions communicate with customers.