Credit unions across the country are using member data in new ways. What was once the realm of chief financial officers and financial analysts is now being explored by marketing and other “softer” departments as financial institutions turn to member data for insight into how to attract, retain, and build lifelong relationships.
Segmenting membership provides a new way to look at member potential, and credit unions are slicing and dicing member information to create segments that are proving useful for not only profitability tracking but also product development and marketing. With the right focus, credit unions can offer thoughtful products and services that are relevant to their members and demonstrate the institution is aware of its members’ needs.
Such is the case with Veridian Credit Union ($2.0B, Waterloo, IA). Since 2005, Veridian has measured its success in growing its Latino membership. The credit union even includes a growth goal in its balanced scorecard strategy. At the end of 2011, Veridian launched a branded suite of products that helps its Latino members plan and financially prepare for the quinceañera, a milestone fifteenth birthday in the lives of Latino women that celebrates their entrance into adulthood.
“Every year we focus on different products and services to attract Latino members,” says Shelly Carrasco, manger of member services at Veridian. “For the quinceañera account, we looked at existing products that would meet the needs [of a family preparing for a quinceañera] and named the account in a way that would appeal to Latinos.”
The suite includes several products to help members fund the celebratory party, including a savings account, a checking account, and a certificate of deposit as well as two credit cards and a home equity loan.
“When people get married, they have a lot of resources for how to do it,” Carrasco says. “We wanted to take that approach with the quinceañera product.”
The credit union offers a brochure that breaks down expenses into specific line items – such as invitations, ceremony, reception, and photographer – and provides tracking for the budget and actual cost. The credit union even suggests a timeline for when party planners should book a hall or reception location and start shopping for dress.
“This ties into our initiative for financial education and how to budget and save for things,” says Doug Gilbertson, Veridian’s senior vice president of operations.
Anyone can open a quinceañera account, and although the credit union hasn’t yet marketed the product, it has high hopes the account will lead to a deeper relationship with its Latino members, who are Iowa’s largest ethnic minority and fastest-growing segment of the population. According to the U.S. Census Bureau, Iowa’s Hispanic population increased more than 80% from 2000-2010; Hispanics now comprise 3-5% of Iowa’s population. In Waterloo, the Hispanic population increased more than twofold during that timeframe.
“The whole goal behind this is to increase the number of Latino members we have,” Gilbertson says. “The Latino market is an opportunity, so we are very much interested in attracting this market. It is a long-term strategy.”
If the credit union’s overall performance in pulling members into other products holds true for its Latino members, the credit union will be in good shape. At year-end 2011, Veridian members held 3.39 loan or share accounts per member compared to 2.53 for Iowa credit unions and 2.53 for all credit unions with more than $1 million in assets.
Veridian’s strategic Latino outreach could have far-reaching positive implications for a segment of the population that doesn’t always access – or have access to – mainstream financial services. According to a study by the Hispanic Institute, in 2006 30-50% of Hispanics had an existing relationship with a bank.
“If they are unbanked and using services that are more costly, we want to provide them similar products and services at a reasonable cost,” Gilbertson says. “We partner with members to ensure successful futures. That’s part of who we are.”