This article originally appeared on CUinsight.
Some of their best ideas come to them after hours, when the halls of the credit union are quiet and they’re free to think beyond the day-to-day business of serving members. That’s precisely when Dustin Fuller and Deke Alexander, executives for Living in Fulfillment Everyday (LiFE) Federal Credit Union in Denton, Texas, began to wonder aloud about a credit union mission trip.
No strangers to the life-changing impact of church-sponsored mission trips, Fuller, LiFE’s CEO, and Alexander, the cooperative’s chief lending officer, envisioned immediate potential. Not only would a trip like that impact countless lives in poverty stricken countries, it could also create a completely immersive and fulfilling experience for both staff and the credit union’s members.
“Credit unions have an outstanding opportunity to change the employee experience that goes far beyond the 9-to-5,” said Alexander. “As employers, we’re often focused on tangible employee benefits, like dental and vision care or sales incentives and PTO. Yet, creating a culture that allows employees to improve lives in villages thousands of miles away – that’s hugely beneficial. You then transform everything. Suddenly a run-of-the-mill transaction at the teller window brings about the realization that serving this member allows our credit union to serve someone else in the third world.”
The Plan Takes Shape
That night, before the after-hours brainstorm had concluded, the two solidified a plan to coordinate two mission trips in two years. The first will take place in the Dominican Republic this November; the second in Mexico during 2018.
For each mission trip, LiFE will partner with area churches experienced in the local cultures and versed in the specific needs of the people. Their focus will be on helping villages gain access to clean drinking water. They will also work to develop longer-term relationships with the villagers, many of whom Alexander says have access to Facebook, affording LiFE staff the opportunity to maintain those connections once back in the states.
Engaging LiFE Members in the Mission
Beyond employees, Fuller and Alexander, both of whom have participated in several mission trips to the Dominican Republic, are also intent on bringing the credit union’s members into the initiative. After working with Coopera to learn more about the credit union’s Hispanic membership, LiFE executives learned a significant portion of the member base has ties to the Mexican culture. Therefore, Fuller and Alexander believe, the second of the planned mission trips will be particularly important to the membership.
“Our first mission to the Dominican Republic will include credit union members who know the trip and the culture extremely well,” said Alexander. “They will serve as guides to help train our staff, some of whom will actually lead the second trip to Mexico.
“We’d love to open up the trips to even more members in the future because we see it as a way to bond employees and members over something other than financial matters,” continued Alexander. “This will create a more intimate understanding of what can really happen when we put our hands and feet to work together. There’s a multiplying effect.”
To raise funds for the mission trips, LiFE is coordinating a golf outing called the Impact Life Golf Tournament Oct. 14, 2017 in McKinney, Texas. With the money raised, the credit union and its partner churches will buy the water filters they need to install once in the villages.
The Multiplying Effect of Living Our Purpose
“When you think about it, these trips strike right at the heart of what we do,” said Alexander. “For us, LiFE is about ‘Living in Fulfillment Every Day.’ A big piece of that is helping our employees see the fruits of their labor. We want to show our staff what it really means to make an impact, and to be a blessing to others.
“Our hope is this will inspire other small credit unions to think big,” said Alexander. “We want everyone in the movement to see it’s possible to get outside the 9-to-5, outside the SEG group, even outside their local communities. Let’s go on an adventure together, make lives better and come back changed people.”
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When I was a young girl in the U.S., my parents – both born in Mexico – visited the local U.S. Postal Service (USPS) office to do more than buy stamps and mail packages; they also bought money orders. Without a banking relationship in our community, my parents considered the post office to be a dependable and acceptable way for them to conduct these specific financial transactions.
Today, as an adult and a strong advocate of the credit union movement, I find myself reflecting on my family’s experience. My parents bought money orders at the post office because it was convenient, reasonably priced and they weren’t asked a lot of questions. Simply stated: The post office fulfilled a simple need.
What if the post office had offered other financial services? Services similar to those offered by today’s credit unions? Would they have chosen to use those services?
The changing landscape of financial services, coupled with struggles faced by the USPS, is creating what could be perceived by credit unions as an unsettling reality: Competition from post offices, especially among minority populations, is a real threat.
Consider the following:
Financial institutions have closed about 1,900 branches over the last few years, leaving many low-income neighborhoods without a place to conduct banking. As a result, non-traditional financial entities that levy huge fees, such as payday and cash lenders, have become go-to spots for many who live in these areas.
At the same time, the USPS delivers more mail to more addresses in a larger geographical area than any other post in the world. It handles 40 percent of the world’s mail volume to more than 151 million homes. But in the age of technology, it struggles to keep up. First-class mail volumes continue to drop, and billions of dollars in net loss just this year threaten the livelihood of this “national treasure.” Post offices in rural communities across the country have experienced closures and reduced hours in recent years.
To recalibrate and create relevancy, the USPS is considering various ideas to leverage interest and loyalty from financially underserved communities, which includes Hispanics, the youngest, fastest-growing minority group in the U.S. One of its ideas capitalizes on continuing interest in e-commerce. The other is centered on postal banking. Their goal is to make check-cashing and other basic financial services part of their product/service mix.
The very approach my parents relied on when I was a child is what may challenge the entire community financial institution industry.
The USPS may be able to offer financial services, such as electronic money orders, bill payments, surcharge-free ATMs and affordable microloans, at a lower cost than credit unions. It’s also well-positioned to serve those who are currently underserved for several reasons. Among them:
Once an idea is more thoroughly understood, it’s easier to take a proactive approach. Knowledge can be leveraged; ideas exchanged. Consider the following questions: Can credit unions compete if post offices transition into financial services locations? Can they effectively connect with and earn the trust of underserved communities? Is it feasible for credit unions to develop personalized products?
Without hesitation, I believe the answer is “Yes!” to all of the above. You may be wondering why I’m so optimistic.
Credit unions have long prided themselves on knowing their members and potential members. They already provide consumers an alternative financial route to traditional banks. So, targeting consumers who do not want a relationship with a “mega bank” is already in the wheelhouses of U.S. cooperatives.
Currently, more than 100 million Americans are using credit unions. According to the World Council of Credit Unions’ annual Statistical Report survey, global credit union membership grew by an additional 10 million people in 2014. Growth resulted for various reasons:
All that said, staying ahead of the competition requires getting creative. Three ideas comes to mind:
Without question, it’s preferable to be in a position to choose one’s response vs. being in reactionary mode. Keeping a watchful and curious eye out for what’s transpiring with the USPS will empower credit unions to be at the forefront of growth trends.
It’s said wisdom comes with age. I’ve come to understand that when acclimating to anything new (much like my parents did when they arrived in the U.S.), it’s liberating to have alternatives. Being limited to one way of accomplishing something feels constricting. I’m confident had a credit union been an option for my parents, they would’ve felt welcomed, connected and understood the endless possibilities that occur with strategic financial guidance.
Instinct and experience tells me there are hundreds, if not thousands, of other immigrants interested in achieving their definition of financial success. The benefit of a credit union partner that proactively asks questions so as to guide members along the path of their entire financial journey – from selecting what types of accounts to open to planning for significant milestones such as college or a new home – is priceless. So is the peace of mind that comes with it. I know. I’ve walked in those shoes.Leave a comment
The following case study is an excerpt from Coopera’s Iowa Hispanic Opportunity Report for the Iowa Credit Union League (ICUL). For more information, contact the ICUL at www.iowacreditunions.com.
At the time Ascentra Credit Union, headquartered in Bettendorf, Iowa, first attempted to reach out the Hispanic community, it had five branches, and of those, two were in cities that showed a Hispanic population growth rate higher than national averages. With corporate America already acknowledging the importance of tailoring its products and services to Hispanic consumers, Ascentra made the decision to follow suit.
“Hispanics are a very loyal, extremely young and fast-growing population shaping the future direction of business and commerce in our country,” said Alvaro Macias, Ascentra community development coordinator. “Unfortunately, it’s a population that is largely underserved in the financial services industry. As Ascentra began to realize the influence and impact Hispanics will have in the future, we knew it was not only right to help reach out to this underserved segment but it was a good business decision for our credit union to focus on growing our outreach.”
Ascentra took steps to make sure it’d be successful in its Hispanic outreach efforts. Management initially asked three bilingual employees for ideas on how to reach this segment of the population. Some advertising was purchased and small events that catered to the Hispanic population were sponsored, but there was no formal Hispanic outreach plan or goal.
Then, they hired Coopera, a leading expert in credit union service to Hispanics, to conduct a member analysis of their operations areas, as well as to provide guidance on Ascentra’s initiatives. These initiatives included things like product and services development and marketing campaign implementation. Coopera was also instrumental in training Ascentra’s staff on the credit union industry’s changing laws and regulations impacting service to Hispanic members.
The credit union then created Macias’ position in the company to make sure the credit union was focused on building a solid foundation in the Hispanic community. According to Macias, Ascentra also added more bilingual staff to the credit union, as well as translated a page on its website into Spanish. Today, 18 out of the credit union’s 123 employees are bilingual. And, the webpage www.ascentra.org/espanol includes the names, pictures and contact information for all bilingual lending officers and call center representatives within the company.
Ascentra formalized its Hispanic Outreach Program initiative, as well as created two advisory councils, one made up of staff members and another with local community members to provide input and insight into the credit union’s and the competitions’ efforts.
“Ascentra’s initial efforts with a formal plan may have started out as more of a business development initiative for the credit union,” said Macias. “But, most recently when the member analysis from Coopera showed that 63 percent of our new member growth in 2011-2012 was from the Hispanic segment, it confirmed in some of our minds that targeting this group was a key credit union-wide growth strategy.”
To better serve Hispanics’ unique financial needs, Ascentra has introduced several products and services tailored for this underserved demographic. These efforts included money wire services to Mexico, ITIN lending and Quinceañera loans. The credit union also launched its suite of “Préstamos Para Mi” or “Loans for Me”, which is a small signature loan product that is marketed as a way to pay for life events, such as applying for citizenship, traveling to home countries and making large purchases like furniture or electronics.
From a marketing perspective, the credit union also made some changes to its campaigns to better target potential Hispanic members. “We cut out billboard advertising, as its reach and messaging was too broad. We didn’t want to convey to prospective members that our membership was exclusive to Hispanics,” said Macias. “Also, we started listing some of Ascentra’s bilingual loan officers’ names and contact information in our advertisements so new-member prospects could call them directly. Our team started getting calls right away.”
Other marketing efforts consisted of bilingual advertising, collateral and branch signage. Macias explained, “Our advertising efforts included a mix of local Spanish/English newspapers, a college radio station that has Spanish programing several times a week and a TV commercial during a Hispanic show on a local TV station. We also began offering Spanish marketing collateral for Ascentra’s products and services, as well as have signage in our branches to announce to visitors that we accept matricula cards as a form of ID to open accounts or obtain loans.”
A big push in Ascentra’s Hispanic Outreach Program was to get more involved in its local communities. According to Macias, the credit union has become involved in the Mexican consulate’s mobile visits — events to help Mexican nationals living here obtain matricula cards and passports. At these events, Ascentra staff is on hand to talk about attendees’ financial needs, as well as to invite them to stop by the credit union to open accounts, obtain loans or plan for their futures.
Macias said the member response to these efforts has been phenomenal as after every event the last 2 years, people came to open accounts or obtain loans. “Hispanic members love that they can talk with someone in Spanish who understands their needs and can explain how Ascentra can help them,” said Macias. “But, it’s definitely about more than language. Our staff goes above and beyond to make each of our members feel welcome and valued.”
Ascentra is also a supporter of the Greater Quad Cities Hispanic Chamber of Commerce and was recently recognized by the Chamber as Corporation of the Year. Macias serves as a board member on the Greater Quad Cities Hispanic Chamber of Commerce and chairs the events and program committee. As part of his Community Development Coordinator role, Macias also has conducted financial education seminars on budgeting and planning, as well as building credit, in both English and Spanish at a local church and at a Casa Quad Cities event.
The results of these efforts demonstrate that Ascentra is on the right track with its Hispanic Outreach Program. In 2012, for example, the credit union processed 89 ITIN loan applications, resulting in 59 loans. These were all small loans under $2,500 which were generally used for consolidation, credit building, and “to get by.” Sixteen of those loan recipients became credit card members as well. Macias offered additional proof: “As of last October 2012, 7.7 percent of our membership is calculated to be of Hispanic heritage,” said Macias.
Macias added these final thoughts, “For credit unions interested in adding more Hispanics to their membership base, my advice is to perform solid due diligence to understand the culture and specific financial needs of this important segment. Embrace what you learn and make any necessary changes to your credit union’s culture to accommodate these members. It is so important that you go to them — don’t expect them to come to you. This includes being at events in the Hispanic community, talking with the people there and being genuine in your efforts to show them that you care.”
“Although Hispanic outreach efforts can take a long time to implement and yield measurable results, know it’s a marathon, not a sprint,” Macias concluded. “Overtime, the rewards become worth every bit of the effort.”Leave a comment