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Five actions Credit Unions can take to OWN Affinity Banking

Affinity Banking, the intersection of a financial institution and a nonfinancial effort that consumers/members have an affinity, is not necessarily a new concept. Universities, sports franchises, and nonprofit organizations have partnered with credit card issues to offer affinity credit cards. What is new is the number of emerging challenger banks.

According to findings from Deloitte's 2022 banking survey, 66% of Americans surveyed believe banks are responsible for supporting diverse and underserved communities. Additionally, U.S. consumers are now 2.6x more likely to transact with banks associated with high humanity.

Here is a sample of a few affinity banks

Their goal is to create and support Eco-conscious communities. They offer the following ways for its customers to accomplish this:

  • Members' savings and debit card purchases will never be used to fund the oil or coal industries.

  • "Plant Your Change"—the ability to eliminate your carbon footprint by planting trees.

  • Automatic carbon dioxide offset from every gallon of gas purchased with their Aspiration Plus credit card.

They offer all-in-one mobile banking for Immigrants in the U.S.

"We are living in an era with more people moving across borders. Our company is founded on the principle that it should be easy to thrive and succeed in a new country. While immigrants come from many different places, they share similar problems - getting access to financial services and managing their cross-border life, all at a fair price. That's why we built a digital banking solution for immigrants." Says Magnus Larsson, Majority CEO

They focus on reducing the friction in banking for underrepresented and underserved small business owners.

According to Seke Balland, founder of BetaBank, "Small business owners deserve a better way to bank. BetaBank is committed to building a digital bank that provides small business owners an unbiased and efficient way to access the flexible capital their businesses need to thrive."

The OG in affinity banking is credit unions. They were created to serve a common bond. While the world has changed since most credit unions were established, caring about members has not.

Here are five actions credit unions can take to help regain the Affinity Banking position and create lifetime value for the market and members.

Properly aligning brand, purpose, and profit.

This is what credit unions do and have ALWAYS done - Time to formalize this and emphasize this history with proven proof points.

Adopting a multidimensional segmentation strategy.

Dig into your transaction data to understand what your members value. They will show you their values in their spending behavior. For example, gas and Groceries are key indicators of value. Some of your members may get both at the same retailer; others may choose differently. Segments can be created based on their values and how your credit union supports them.

Implementing features and rewards.

This is an easy one for credit unions. Align payment rewards (debit and credit cards ) to the retailers your members are already using. Offer the ability to turn those rewards into donations to their favorite charity. It is easier than turning it into money. And many already do that.

Designing human experiences.

This is all you credit unions! Start by reviewing the member experience and identifying the friction the member has doing business with you and working hard to reduce that.

Looking beyond banking

Diving deep into member needs will help identify new nonfinancial products, e.g., insurance - what could be added to existing offerings and health care products: prescription benefits or others.

As we head into 2023, think about leveraging your data to dive deeper into your member's needs to identify current and future value.


Looking for More?

We believe that data activation doesn't have to feel overwhelming or expensive to be impactful. After helping over 600 credit union leaders launch their data journeys, we have identified several consistent knowledge gaps. We have worked hard to fill these gaps with a variety of educational offerings:

There is something for everyone!

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