HOBOKEN, N.J. — Credit unions are leading a savings revolutioncourtesy of Filene Research Institute's i3 team.
Across the country credit unions are offering savings challengesdesigned to help members improve their financial pictureparticularly during these tough economic times.
“We're so excited to see how this i3 innovation has grown,” saidFilene Chief Innovation Officer Denise Gabel. “When you look atthis effort and you contrast it with the branding issue wherecredit unions to date can't agree on everything from brand messageto colors, interestingly, credit unions can agree they are theinstitution consumers can count on to help improve their financiallives. Regardless of size, product lines or field of membership,all credit unions have a savings instrument and the potential todemonstrate just what is at the heart of credit unions.”
Gabel said the concept uses a mix of reality television, onlineinteraction and individual planning to encourage members to reducedebt, increase savings and get control of their financial lives.With a focus on making it easy for credit unions to customize tomeet their needs, Gabel added that all the tools have been providedto get the program up and running quickly.
The challenge itself is a reality-based event in which selectcredit union members compete to achieve specific savings and debtreduction goals. Selected participants then meet with a financialplanner who suggests a set of realistic yet ambitious financialgoals. They are then followed over a 10-12 month period and theirongoing progress is made publicly available via a television show,Web-video stream, a series of newspaper stories or even updates ina newsletter. At the end of the competition, one participant willwin a grand prize. The idea is to inspire consumers and othermembers to change their financial lives by setting their ownsavings and debt reduction goals and to stick to them with the aidof family, friends and community. According to Gabel the key isfinancial coaching.
“The savings challenge idea is born out of ethnographic researchthat found that consumers are looking for someone to lend them ahand and be a good money coach, not talk down to them or teach themfinancial literacy,” said Gabel. “That's the single most importantcomponent in making this a success and any incarnation should staytrue to it. People believe their way of managing money is the bestway so whatever their budget process, even if it's purchasing moneyorders, the challenge is not to say 'no you are wrong do it thisway' but rather work with them. No one wants to hear they don'tknow best.”
GECU in El Paso, Texas was the first credit union to launch the i3program in 2007, and it not only got two local news stations tofollow the competition closely with regular interviews broadcast inthe El Paso market and uploaded to the partner stations' Web sites,but it also helped GECU grow. Between Jan. 1, 2007 and July 31,2007, GECU opened 5,341 No Excuse Savers Club CDs and 10,057 shareaccounts, a growth rate of 60% and 6%, respectively, over the sameperiod in 2006. According to the credit union the accounts openedalso tended to be higher value, with account balances for newlyopened CDs and shares 30% and 17%, respectively, higher than theyear before. This growth in accounts and balances occurred in theabsence of any product-specific marketing. The credit union hascontinued the challenge, which is now in its third year.
Since then credit unions have taken the program and tried to makeit their own. For example Lenexa, Kansas-based CommunityAmericaCredit Union transformed the challenge into a financial makeoverand included a blogging component where the families selected talkabout their experience throughout the competition.
According to the CommunityAmerica CU Director of CorporateCommunications Barry Brakeville, the program was a natural fit forthe credit union.
“Our goals and objectives as a financial institution are all aboutadvancing the financial interests of our members, and this contesthas, by and large, the same goal of helping members break the cycleof debt,” said Brakeville.
He added that the blogging helped extend the “winners” beyond justthe four families selected to participate in the challenge toinclude every member and consumer by providing a place where theycould learn valuable financial tips and share their commonstruggles with money management. He said the site had tens ofthousands of hits and the credit union is gearing up for its 2009makeover contestants and is in the process of selecting four newmoney coaches.
Inspired by the success of other credit unions AMOCO Federal CreditUnion in Texas City, Texas has launched the “Earn or Burn” $20,000Challenge to help its members think smart about money and learn howto make better financial decisions. Members can track the fourfamilies' progress over the next 10 months online atwww.earnorburn2009.com. The site also offers viewers financial tipsthat can be implemented in their own lives.
“This just fit in great with our strategic goals for 2009,” saidAMOCO Marketing Director Tina Linquist, regarding financialliteracy. “So much of the financial education you see in the creditunion world is so geared toward younger people that we're missing abig group of individuals who are older or are taking care of theirparents and families who still don't have a good sense of money.The timing for something like this has never been better, and whobetter than credit unions to reach out and do what we can tohelp.”
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