More than half of adult consumers in the US are financially unhealthy, according to a study from the Center for Financial Services Innovation (CFSI). And of the 1 in 5 Americans who have no bank account, all of them often choose to use nonbank options rather than your member-centered credit union. So how do we increase access to credit union services in a way that captures this huge potential member audience?
Financial inclusion is a concept that is defined by many factors, but the main goal is to ensure that all communities, regardless of race, status, or financial education, have equal access to credit union services and opportunities.
Here are some ways you can foster financial inclusion at your credit union.
Create Digital Solutions
Your members should be from all walks of life. And digital tools are the best way to foster equality in terms of financial barriers to entry. Some of the main reasons people choose not to use banking or credit union services include things like the branch’s hours of operation not working for their schedule, and the inconvenience it causes them when they have to go out of their way and physically visit one of your locations.
Digital tools can help remove those barriers and create meaningful progress toward full financial inclusion.
These tools can be member-facing or in the background.
And these member-facing solutions are only as good as the digital infrastructure that supports them. That’s why it’s also important to use a leading provider of enterprise data protection like IMS to keep things running smoothly with solutions like compliance and IaaS.
Mobile solutions are also a growing sector within the digital banking realm. Accessibility in banking means meeting your members where it is most convenient for them, whether that’s in your lobby, in their home office, or in their phone screen.
Keep Up with Industry News
Recently, the House Financial Services Subcommittee on Diversity and Inclusion was created by Chairwoman Joyce Beatty (D-OH) and Ranking Member Ann Wagner (R-MO).
The goal of the committee is to foster diversity, equity, and inclusion in the financial and banking sectors. Part of the committee’s purpose is to introduce new legislation (called the Financial Access for Underserved Communities Act) that includes expanding classifications for credit unions as “low-income” credit unions. This would mean that if any area is more than 10 miles from the nearest branch of a financial institution, it would receive the “low-income” distinction.
The bill that includes this change would also allow federal credit unions to add these underserved communities to their field of membership.
Legislation is changing all the time, and another way to increase financial inclusion in your credit union and its practices is to keep your ear to the ground when it comes to developing initiatives. Using your credit union’s status and expertise to weigh in on and share important changes to the system can also help educate members and non-members alike.
Share the Importance of Moving Banked Dollars into CUs
Certain big businesses, like NerdWallet, have recently moved assets from big banks into CDs (Certificate of Deposit) in an effort to create more equity in communities that are disproportionately struggling due to the pandemic.
Investments made in order to bring assets to credit unions are a surefire way to help individuals and businesses in your CU’s community. You can encourage and ask bigger businesses with ties to your communities to help in these efforts.
Now, more consumers are holding big businesses accountable and asking that they show their commitment to the communities that support them by giving back to those communities.
Doing this through a credit union can help those individuals and businesses get the same financial opportunities given by big banks, and even get them at competitive rates.
Buy Now, Pay Later (BNPL) solutions are gaining popularity across the country as we work to decrease the number of unbanked and underbanked individuals. This practice allows
Credit unions can combat the need for prepaid cards in underserved communities by offering BNPL and other debit-forward options with no added fees. This allows you to create meaningful relationships with these communities. You can also use these products and services to boost financial inclusion in the communities your credit union serves.
Use Your Data to Create an Inclusive Future for Your CU
Your data is the gateway to help people access your credit union services. It’s also a way to foster membership growth, problem-solving and troubleshooting, and so much more. In order to promote financial inclusion, it’s important to create a digital atmosphere that can support all of your members’ diverse and unique needs.
The IMS DataArchiver saves up to 80% of primary storage costs and is scalable to manage unlimited file servers in a distributed environment with zero disruption to end-users.