The i3 innovation teams from the Filene Research Institute premiere seven of their latest cooperative finance game-changers
By Andrew Downin, Innovation Director at Filene Research Institute
Collaboration and innovation are not new concepts within the financial services industry. In fact, in a 1936 speech Edward A. Filene, father of the U.S. credit union movement and namesake of Filene Research Institute, remarked on the importance of collaboration when he said “credit unions… each acting individually, could not possibly accomplish what they can now accomplish acting together.”
Now, 78 years on, the need for collaborative innovation within the credit union movement is more important than ever. We’ve all read about the forces at play. Disintermediation, non-traditional competitors, increased regulation, and more. But examples of successful collaborative innovation to address these forces are few and far between. One exception is Filene Research Institute’s i3 (Ideas, Innovation, and Implementation) program.
For the past ten years, concepts borne from i3 have helped change state laws, improved millions of consumers’ financial lives, and saved credit unions countless dollars. The program’s success has come in large part from its focus on collaboration, bringing together teams of credit union executives from across the United States and Canada to jointly work on solving the most pressing cooperative finance challenges.
The teams’ latest concepts were recently announced in Princeton, NJ and run the gamut from smartphone apps that leverage behavioral economics theories to improve consumer happiness to programs that attempt to help boost credit scores for new borrowers. Here’s a sample of what these teams recently unveiled.
Research shows that being presented with too many options can lead to a lower probability of purchase and decreased consumer satisfaction. Managing this choice overload during new account openings is critical. Otherwise, the member’s easiest decision may to be make no decision at all. Just4You enables credit union employees to open accounts for members that meet their individual financial needs. Based on responses to just six questions, it queues up personalized offerings of products and services for new members. Results of prototype tests indicate the system has positively impacted the acquisition rate of key products including checking account and credit cards.
According to a 2013 Fidelity survey of recent college grads, the average student accumulates $35,000 of debt upon graduation. And, not surprisingly, many students’ plans for debt management are vague. At the same time, credit unions are increasingly facing succession planning and staffing continuity issues as they look for the next generation of leaders. Credit Union Career Corps introduces recent college graduates to credit union careers. It’s a tuition reimbursement program, paid forward, that incentivizes recent graduates to explore full-time employment with credit unions.
Jokes about ‘retail therapy’ in popular culture testify to the idea that our spending habits tend to have significant emotional roots. In fact, a 2012 BMO report found that 59% of study participants made impulse purchases and over half regretted the elective spending they did. Centsus connects consumers, financial decisions, and their emotions to help them spend happier. Using a mobile app, consumers select emoticons to rank how they feel after spending, making them more aware of how financial decisions impact their emotions. Alerts are proactively sent to consumers once Centsus learns their spending patterns with reminders of how past financial decisions made them feel.
A person’s ability to obtain financing, rent an apartment, get a cell phone, and even get a job can hinge on his or her credit score. And, it’s actually easier to get a loan with a bad credit score than with no score at all. The Great Credit Race tackles this credit conundrum. The contest platform helps young adults establish and improve credit scores, motivating them through gaming techniques and supporting them with financial education.
Nearly one-third of young adults age 25 to 34 lived at home during recent years according to a Pew Research study. Economic stress, lack of employment, family ties, and parental expectations have all led to this trend. Relaunch is an online savings rewards program designed to help young adults living with their parents learn how to manage their finances and build a nest egg so they can move out. Each month, the adult child makes deposits into two accounts for future savings and to assist with household expenses. Ultimately, Relaunch helps the adult child leave the nest once again.
6.) Imminent Death
The majority of adult Americans don’t have a will, according to research from Harris Interactive and Martindale-Hubbell. Imminent Death is an interactive tool for credit union employees to introduce the importance of creating a basic will to their members.
7.) Social Cowboy
Social media has become an increasingly important window into trends, risks, and opportunities within the financial services marketplace. But, most credit unions are unable to provide tangible proof that their social media strategy is successful. Social Cowboy empowers credit unions to monitor, filter, and leverage conversations around financial topics and their brands across social networks. The tool also allows credit unions to tailor outbound communications in the social media realm before releasing the message.
Andrew Downin is the innovation director at Filene Research Institute and can be contacted at firstname.lastname@example.org. To learn more about Filene Research Institute’s i3 program, visit filene.org/community/i3.