Financial Empowerment Is a Moral and Business Obligation


By Kathryn J. Davis, President/CEO, BALANCE

By any measure, the U.S. economy appears to be on a roll. With employment rates on the increase, housing prices at an all-time high, and bankruptcy filings down, it makes sense that today’s consumer financial health is doing great, right? Not so fast.

When you look past the data and statistics, you’ll see a very different story. While unemployment has decreased, median household income has not caught up to pre-2000 wages. Consumers still struggle to pay bills on time. Most telling, according to the Federal Reserve, 47% of Americans could not come up with $400 if a financial emergency arose. 

This is not the profile of a financially healthy America.

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For credit unions, this should be a wake-up call for mobilization. As an industry, credit unions are uniquely positioned to make a difference in the financial lives of their members. And if we can help make a difference – help a member pay off debt, prepare for a financial milestone, or increase their credit score, we not only create a loyal member, we are doing business in the most personal way possible.

At BALANCE, our financial counselors hear hundreds of stories weekly, each with a unique financial problem someone is trying to solve, or goal someone is trying to reach. When that outcome is achieved, the gratitude we receive from our clients is one of sheer joy. Words simply cannot express what one feels when someone tells you that you changed their life. This is an impact that transcends what other businesses can do. Yes, it’s a great business decision, but it’s more than that. It’s what being a credit union is all about.

What does it take to build this into your business model? Invest in meaningful financial education and empowerment – this isn’t hosting a workshop or having a slick website with the latest educational videos. What impact are you making after a member comes to a workshop? How do you change their lives? If your member watches an educational video what happens? Does anything change for that member and their family? If your answer is no then you’re missing an opportunity to deliver impact. Build financial education and incorporate it into your products and your employee interactions with members.

"47% of Americans could not come up with $400 if a financial emergency arose."

What about our fintech friends? If you look at their products and approach to delivery, what could we learn from them? Find out what financial products consumers are gravitating toward, and figure out ways to help them avoid money mistakes. For instance, as a cashless society emerges, it puts space between young consumers and money becomes more of a concept and less of a tangible item that has real value. How do we deal with ever-evolving concepts of money? Financial education!

We also must train staff to recognize financial problems and provide them with the tools to deal compassionately with these sensitive issues. The topic of money is still taboo for many consumers, and getting them to talk about financial difficulties requires an emotionally mature frontline staff. Is your staffed equipped to deal with these situations on a daily basis? Build a culture of compassionate guidance and give your employees the training to have these conversations. Unfortunately, if you look close, your employees aren’t financially well either, and they work in financial services! Your own employees could use some financial education help from you, too.

Some of these issues are more radical than others, but we’re faced with a moral obligation, as well as a business opportunity to help consumers who are falling through the cracks. Fortunately, credit unions, as an industry have the trust of consumers on our side. As long as we extend a helping hand, we have a high likelihood of having someone reach out and ask for help. Will you and your staff be prepared?