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How to Make the 'Credit Union Hug' 10 Times Better


Originally published 11.17.21 in the CU Times

Meet Shoal, a new digital platform that will allow UK savers the power to help fund the fight against climate change.

Launching in 2022, Shoal will invest exclusively in green and sustainable projects, giving savers the power to select the types of projects their money supports. In this way, Shoal will empower its community to channel their savings directly to their most important causes.

This also marks a massive moment in the UK banking world as it is the first collaboration between a British multinational Standard Charted bank, founded in 1969 and operates more than 1,200 branches in more than 70 countries, and challenger bank Starling. Starling, founded in 2014, offers best-in-class digital capabilities and Banking as a Service (BaaS) to over 2.5 million customers.

A challenger bank is typically a smaller bank that aims to compete with traditional banks by leveraging technology. Most challenger banks are digital or app-based without a physical branch system. This structure provides a considerable benefit to the challenger bank because they can avoid the high costs of running in-person branches and use the money saved to deliver better digital service and product innovation, resulting in lower costs to consumers. The apparent target of Challengers is those who embrace technology, primarily Millenials and Gen Z.

Because of their smooth digital and app experience, many challengers so a rather nice uptick in uses due to the pandemic. Challengers banks were able to process and deposit stimulus payments faster than traditional banks. This efficiency was appreciated by those who might have been living paycheck to paycheck or who lost a paycheck during the pandemic. To learn how credit unions can challenge challengers, please read the June 22 article.

While the collaboration between a traditional and a challenger bank is exciting, but more so is the purpose and potential impact of Shoal. Shoal taps into Millenials and Gen Z's desire to make a difference in their world and provides them the access to invest in efforts they support. Unlocking this much-needed retail capital gives savers the power to make good money while making money to do good.

What actions can Credit Unions also take to fill Millenials and Gen Z's desire?

During the pandemic, credit unions stepped in and stepped up their local outreach efforts, delivering The Credit Union Hug, credit unions' passion for their members. A prime example is the "Give Love Challenge" efforts of WV Central FCU. During the height of the pandemic, this triple-hit fundraiser quickly and easily infused $75,000 into the communities they serve in one day! This was accomplished with a buy local, matching and foodbank donation.

In a state-wide effort, the MN Credit Union Network hosts CU FORWARD®. This is one day when credit unions of all sizes committed to giving back to their communities in a cooperative effort by promoting volunteering opportunities, fundraising events, and participating in community service projects. This year's efforts impacted more than 540,000 people!

While these are incredible, the opportunity presented to credit unions is to formalize these efforts for maximized results. Here are five actions a credit union can take to 10 x their HUG.

1. Assess current giving efforts. Evaluate current efforts and determine what is most impactful for the least amount of effort.

2. Formalize the efforts. Take a moment to ensure these efforts have formal process documentation. Next, review the process for ways to reduce friction and improve efficiency. What can be automated? How can you leverage current technology, such as mobile apps? Who can you partner with (other credit unions/state associations/others)?

3. Quantify the impact. Make sure the bigger picture is being measured, for example, how many lives are being impacted by these efforts. What goals should you set? What other community benchmarks should you be attempting to achieve?

4. Formalize the process as an offering. This includes the following steps:

  • Set goals

  • Promote it as a product (devote the same level of promotional effort that you would for a typical credit union product)

  • Share stories

  • Leverage social media

5. Rinse and repeat.

While this may not be directly connected to climate change today, that doesn't mean it can be tomorrow. The point here is that credit unions have been connecting their members to the communities they serve for much longer than Starling and Standard Charter.


Now is the time to leverage the Credit Union HUG!

 

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