CUs Embrace Family Banking to Attract a New Generation of Members

Recent findings from Cornerstone revealed a striking reality: The average age of credit union members surpasses the national average age by a decade. This widening age gap signals a significant challenge for credit unions: Attracting and retaining younger members.

However, there is a rapidly growing opportunity for credit unions to reverse this trend and attract the next generation of newer, younger members: By offering a family banking solution that allows parents to introduce their children to responsible financial habits.

Family Banking and Money Management

Family banking is a medium that allows parents to safely introduce financial literacy and responsible financial habits to their children in a safe and secure environment. This often entails using a family digital wallet, banking app or platform where children can spend, save, invest or donate – all under parental supervision. Introducing a family banking solution not only attracts parents to become new members to gain access to this capability – it also enables credit unions to introduce their brand to kids, with the potential to turn them into future members.

How Can Credit Unions Introduce Family Banking to Members?

Now that we’ve explored the high-level benefits of offering family banking, the natural next question is: How should credit unions introduce this concept to new and existing members?

Credit unions looking to introduce family banking to their members should consider a phased approach to ensure successful implementation and adoption among their members. Here are some steps they might consider:

1. Support parents with educational resources. According to Ipsos, over one in three American adults are not considered financially literate. A lack of financial literacy education can make it difficult for parents to teach their kids responsible financial habits. Credit unions should aim to be a resource by offering explainer blogs, worksheets and even interactive guides to aid in this process.

2. Encourage safe spending. Responsible financial habits do not begin and end with spending and saving – it’s important to mix financial education with financial experience to create a well-rounded financial literacy education. As such, credit unions that offer family banking services should aim to be a safe space where parents can educate their kids about safe and secure spending and saving, educated investing and charitable giving without worry.

3. Put parents in the driver’s seat. Per REGO’s latest survey, more than 80% of parents believe it’s important to have visibility and control over where and how their children are spending money. As children are still actively learning about responsible financial habits, it’s paramount that parents have visibility into how they are spending. Credit unions should aim to build a product that is not only child-friendly but also parent-controlled.

What Credit Unions Must Consider When Selecting a Family Banking Solution

As technology continues to advance at the speed of light, it remains true that credit unions often operate with limited technology resources and may not have the capacity to build and launch a new family banking platform.

However, by choosing a fully white-labeled solution, credit unions can integrate ‌a family digital wallet or other family banking solutions, while maintaining a cohesive and unified brand experience across all services and offerings.

When selecting a family banking platform, it’s also important to remember that there are laws, such as COPPA, that delegate how institutions can interact with children of a certain age. It should be top of mind for every credit union to create a platform that is both available to children of all ages and safe for children of all ages to avoid hefty child privacy law violation fines.

By implementing a strategic plan that encompasses education, compliance and effective parental control, credit unions and other financial institutions can effectively introduce family banking solutions to their members, attracting a younger audience while promoting financial literacy and responsibility.

James Peil is Head of Partnerships at Rego Payment Architectures, a Blue Bell, Pa.-based provider of a family-focused mobile banking solution.