As credit unions continue to compete with big fintechs and “challenger” banks, it’s critical that they develop new growth strategies to strengthen their member portfolio.
According to a recent Cornerstone report, the average credit union member is ten years older than the average age of the US population – meaning credit unions are having difficulty retaining existing or attracting new young members at the rate they need to continue growing.
There are two possible reasons behind this shift:
1. Younger populations are moving to more urban areas and away from rural communities, where credit unions tend to thrive.
2. Credit unions have been slow to adopt modern technologies—like digital banking or digital account opening—that younger demographics demand. And for credit unions with a small team, implementing new digital products and managing the risks associated can be challenging.
There is a growing opportunity for credit unions to reverse this trend and attract a newer, younger demographic and turn them into lifelong members: By offering a family banking product that introduces them to responsible financial habits.
What is Family Banking?
Family banking allows parents to teach their kids financial literacy and responsible financial habits in a safe, parent-controlled environment. This style of banking often includes the use of a family digital wallet, or a banking app or platform where kids can make transactions, save money, invest, or donate—all under the supervision of their parents.
By offering a family banking product, credit unions can reach new members and increase their deposits in two ways: they can attract parents to become new members by offering an in-demand capability that improves their kids’ financial literacy, and it also enables them to introduce their brand to younger audiences with the potential to turn them into future members.
Here are 4 ways credit unions can introduce family banking to their app or platform.
1. Offer educational resources: A major hurdle for parents teaching their children responsible financial habits is a lack of educational resources. Providing blogs, downloadable worksheets, and interactive guides with tips and tricks can be helpful for parents when beginning their children’s financial journey.
2. Encourage safe spending, saving, investing, donating: Teaching children safe financial habits doesn’t begin and end with saving. To round-out a child’s financial journey and prepare them to navigate finances as an adult, parents should have a space to teach their kids about secure saving, safe spending, educated investing, and charitable donating.
3. Build a parent-controlled platform: According to one of REGO’s latest surveys, more than 80% of parents feel it’s important for them to have visibility and control over where their children spend their money. Parents want visibility into their children’s spending habits while they’re still learning about finances. Make sure that your family banking platform is kid-friendly but parent-controlled.
4. Engage kids of all ages while complying with state and federal regulations: When building your family banking platform, you’ll want to ensure it’s both available for kids of all ages AND safe for kids of all ages to avoid paying hefty fines due to child privacy law violations.
Integrate a White-Label Family Digital Wallet
The issue still remains that credit unions often operate with limited technology resources and may not have the capacity to build and launch a new family banking platform. Fortunately, REGO has built the only white-labeled and fully integrated family digital wallet for credit unions. With the ability to integrate a white-label family digital wallet that already considers educational resources, the entire financial journey, and children’s privacy regulations, credit unions could introduce this offering to members.
REGO’s family digital wallet can integrate into credit unions’ existing platform or banking app, or credit unions can customize REGO’s standalone, white-label app with their union’s branding. Whichever option credit unions choose, each transaction is safe and parent-controlled.
To start offering family banking to your members, set up a demo with the REGO team.