5 minutes
Accounts ‘Grow Up’ With Kids
Just as children’s interests and preferences evolve with each passing year, the new Discovery Youth Accounts launched by First Service Credit Union are designed to offer progressive themes, features and options as young members grow up.
The youth accounts are offered in three tiers: Adventurer for children through age 10, Voyager for ages 11 to 14, and Navigator for ages 15 to 18. Accountholders “level up” automatically. All accounts offer free online and mobile access so children and teens, rather than their parents, can set their own savings goals and make deposits.
A new feature to be added this year will give Voyager accountholders the option to set up webpages to seek contributions for savings goals from family and friends. And Navigator members have the option to open a checking account with a debit card, with special safeguards that prohibit overdrafts.
The $600 million/56,000-member Houston credit union previously sponsored a youth savings program with online content from a vendor offering rewards in the form of prizes. First Service CU decided to design its own program to more effectively appeal to young members across the age spectrum and incentivize behaviors that could make a positive difference in their futures rather than just awarding movie tickets after a certain number of deposits, says CUES member Mike McWethy, executive vice president of the CU.
The decision to reward young members for earning good grades with deposits to their accounts has been a hit with both kids and parents, McWethy notes. “We know that getting good grades benefits everyone, and this focus encourages discussions between parents and children about the importance of education,” he adds.
Other account features will also encourage family conversations, including the decision of teenagers to open a checking account with their parents’ permission and the option for Voyager accountholders to set up funding requests. “They’re going to have to think it through and work for it, and the CU will be part of that discussion,” McWethy says.
First Service CU’s marketing department conducted research to help design the tiered program, gathering input from children across the age spectrum from member families and their own family and friends.
“This program is an investment in sustainability for long-term member relationships,” McWethy says. “We want to be the CU that gave them their first debit card and, down the road, their first credit card, their first auto loan, and their first mortgage.”
Align Culture & Success Drivers
Jamie Notter defines culture as the collection of words, actions, thoughts and “stuff” that clarify and reinforce what is truly valued inside your organization. A strong culture is one that aligns what is valued with what drives the success of the enterprise, he told attendees at CUES Symposium: A CEO Chairman Exchange.
To make progress toward creating a strong culture at your CU, you must:
- Know where you are now. Gather data, conduct research, ask questions, read reviews. You need a system that is constantly monitoring itself, Notter said.
- Know where you need to be. Define what drives your organization’s success and get clear on what’s important to drive future success. “It’s a deep and complicated answer,” he warned. “Don’t look at what you believe to be obvious.”
- Know how you will move from here to there skillfully. “To do this you need to do these two things: Make it real. Make it permanent. Choose to make changes to concrete processes that everyone sees,” Notter advised.
Meetings are Notter’s favorite recommendation for a visible process to change right away. He challenged attendees to make a change to get the impact they’re after: transparency, efficiency, engagement, etc. This could mean changing the meeting structure, shifting the location or altering the number of people in the meeting—whatever is needed to make the desired cultural impact.
Letters to the Editor
Setting CD Rates
“CFO Focus: Spotlight on Certificate Specials” poses some interesting points. That said, money is only being valued in economic benefit in funding a loan. There is MUCH more in CDs. … CDs drive traffic and if the sales team is worth their weight it often transitions into longer relationships. I was surprised not to see CD rates tied to primary checking/direct deposit etc. These build the cooperative and reward members who give more in terms of business … and drive new faces in to cross-sell relationships.
CUES member Todd Link
SVP/Risk Management/Remote
$1.29 billion Dupaco Community CU
Dubuque, Iowa
Author response:
I agree with every point. ... Indeed, the customized maturity accounts described in the article offer advantageous pricing typically available only to members who have or are establishing a broader relationship. … We also advocate timing and defining specials to attract depositor attention without the excessive cost of perpetual promotions. If you really want to drive new faces, offer to refinance deposits as interest rates rise. Every time-deposit customer is interested in escaping low yielding accounts.
Neil Stanley
CEO/Founder
The CorePoint
Interest Rates on the Rise
I was interested to read the January issue article, “Lending Outlook for 2016”.
Credit unions are consumer lenders. In most cases they have more rate-sensitive liabilities than rate-sensitive assets. In addition, the duration of their RSAs is typically longer than the duration of their RSLs. Liability-sensitive credit unions would experience a decline in interest income and potentially net income when interest rates rise, not an increase as the article suggests. Credit unions should use their ALM models to determine the effect a rise in interest rates would have on them.
William J. (Bill) Rissel
Retired CUES member
(formerly president/CEO of Fort Knox FCU)
Punta Gorda, Fla.
Corrections
In our March issue article, “Verifying Online IDs”, online account opening solution OpenAnyware and its provider, Bluepoint Solutions, a CUES Supplier member based in Hendersen, Nev., were incorrectly identified. CUES regrets the error.
In another March article “The Right Questions,” we incorrectly referred to the Customer Contact Council as the author of a study, when it should have been CEB.
