Walking Together: How Credit Unions Can Make Listening their Superpower and Solve Real-World Problems

During a severe winter storm in Michigan, I watched families flood into a hotel lobby, looking for a warm place to stay. Most of the area was without power due to the thick layers of ice covering everything- the same ice that had forced me to work from the hotel lobby that morning. I overheard the front desk explaining to a woman on the phone that they could not accept debit cards for hotel reservations, only credit cards.

This human was looking for a warm, safe place to take her family as they waited for the power to come back on, and she couldn’t solve this simple need for her family because of the type of payment option she utilized. Facepalm. The U.S. Banking System continues to fail consumers. I felt our credit union had to do something. Within the next hour, after a quick conversation with our executive team, we launched a no-credit-check $500 emergency credit card for existing members. Our contact center (internally referred to as our care center) stayed open late that night, issuing these new credit cards.

I can hear the protests of lending, risk, and collection professionals concerned about losses and fraud. But remember, Friedrich Raiffeisen famously said, "Not for profit, not for charity, but for service." My point: Before we dive right into heady analytic risk assessment, let’s remember the heart of our founding purpose.

In a world where digital disruption is reshaping the financial industry, credit unions have a unique opportunity to stand out by focusing on the real-world needs of their members. By leveraging a community-centric approach and member-focused mission, credit unions can create innovative solutions that address pressing societal issues. All we need to do is be attentive and listen. At Community Financial Credit Union, we refer to listening as our superpower.

While it’s important we are good stewards of our members' money and that we ensure we have strong capital and returns, it’s also vital we use those returns to create impact. We can have both strong financial performance and human-centered, heart-forward social impact. We can get back to creating solutions for the struggles we were hearing in the break room. The colleague who couldn’t get a loan to repair their furnace, or for the mom who couldn’t make a hotel reservation because she only had a debit card. Let us not use the cushy capital to get soft in our mission but stronger.

The Power of Human-Need Product Development

One effective strategy for credit unions to evolve and win is adopting a holistic- human-problem-driven approach to product development. This means starting by identifying and addressing the pain points that humans experience in their daily lives. By deeply understanding members' needs, credit unions can create human-centered design solutions that deliver genuine value.

Five Ways Community Financial is Uniquely Evolving for Members:

1. Powerful Partnerships—We seek partnerships that actively engage with us to imagine how we can do better by dreaming boldly. In our partnership with Mantl, we’ve created account-opening workflows to seamlessly open hundreds of accounts for kindergarten and fifth-grade students in collaboration with a local school district.
2. Making Impossible Dreams Possible - Develop products that address specific needs, such as affordable housing loans. At Community Financial Credit Union, this was brought to life through our H-OPE! mortgage for first-time buyers who have thin or sometimes no credit history.
3. Not Ignoring Dark Moments- Life isn’t just about retiring and buying a vineyard. Death, sickness, and uncoupling are all major life transitions with profound financial impacts. In our work with Andy Janning, we’re using tools we already have to assist members affected by cancer and ensuring we’re able to alleviate their financial burdens so they can concentrate on their treatment and recovery.
4. Choose The Bear?- By leveraging our listening superpower and partnering with local community organizations such as First Step, we’re delivering tools and products that help those affected by domestic violence and economic abuse by providing not only products that serve those affected but environments that help keep them safe. We’ve added “fast exit” technology on our website, incorporated IVR workflows, and added options for gender preference within our appointment scheduling software so we can meet members and potential members where they feel most comfortable.
5. Liquidity and Cash Flow Management- We’ve frequently heard during our listening panels with members, especially moms, their day-to-day budgets are particularly challenged, and we see that in our transactional data. By creating products like our CloseEnuff? account, we’re leveraging services like Early Pay and Buy Now, Pay Later alongside no minimum balance requirements and reduced overdraft fees to save our members a projected $1.2 million this year. My colleague, Blake Woods, vp of innovation, insights, and impact, explained this product and aligned services articulately in an article he published on LinkedIn.

What unexplored winning ideas could be ignited by close listening and problem-solving within your unique communities?

As credit unions, we have the unique opportunity to positively impact our communities by focusing on solving for human needs. By walking alongside our members and addressing their needs, our industry can truly make a difference. This could also give us even more stories to share that allow us to no longer be the best-kept secret in North America.

Finally, some stats for those curious lending, risk, and collection professionals: during the ice storm, we issued 165 emergency credit cards. While 17% of those cards were charged off, an additional thirty-three deposit shares and 19 additional loans were opened by these members within 90 days of the card issuance. Not a huge positive profit, but the positive social- and community impact is a return on investment that will far outweigh our non-material losses.

?

The Choose The Bear? Initiative: A powerful example of a credit union

addressing a pressing social is Community Financial’s Choose The Bear? campaign. By raising awareness about domestic violence and economic abuse, this initiative aims to financially empower women to break free from harmful situations.

?

?