Credit unions often times try new and innovative approaches to address specific aspects of their operations and don’t think much about it until others hear about them and wonder, “Why didn’t we think of that before?”
One such example is the Mexico, Maine based Oxford Federal Credit Union that had $113 million in assets as of September 2006. A few years back, Oxford FCU was faced with the dual challenges of low share and low membership growth and was looking for ways to revive them both when it saw an opportunity in debit cards.
In 2001, debit cards contributed only 8% to the total non-interest income. One of the low-cost strategies Oxford FCU adopted was to actively partner with area schools to impart basic financial education to high school seniors and juniors. This initiative, coupled with a well-executed campaign targeting college-bound students and families paid off handsomely for the credit union as membership, shares and debit card usage are all up.
For 2006, debit card income has jumped to 24% of the total non-interest income and debit penetration is at 81%.
The emphasis of their marketing campaign was to attract college-bound students in the area to the credit union by educating them on financial decision-making and saving for the future. This resulted in many students opening accounts with the credit union and then taking their debit card to college.
To educate them on financial realities, students were asked to participate in a budgeting exercise that tied their career aspirations with their expected salary levels upon graduation and then asked them to go on a shopping spree with mock FICO scores. The intent was to make students realize how their career choices and FICO scores affect their lifestyles and future saving capacities. You can watch a short 3 minute video of this initiative by clicking here.
Oxford FCU presented on the webinar, ‘Strategies for Driving Debit Card Usage’ hosted by Callahan & Associates and sponsored by PSCU Financial Services. To learn more about this even, click here.