ICYMI is our way of sharing the best of those “Did you see this?!” news and tidbits that we usually send to each other. If you like this kind of thing (or don’t), feel free to let us know or join the conversation. In the meantime, here’s what we’ve seen lately:
CEOs are getting younger every year
Cross a lemonade stand with Shopify and what do you get? 3,000 CEOs that are also kids, selling hats, stickers and totes that they design themselves. Co-founded by a Dad (Ben Goldhirsh, founder of GOOD magazine) who was looking for a way to teach his daughters about business plans, capital and marketing, Mighty is an attractive ecommerce option for young entrepreneurs. Investors seem to like it as well, since it recently brought in $6.5M in seed funding. As of now, all of the pieces designed by these Kid CEOs have to be produced by Mighty’s manufacturing partner, Printful, or come from Novica, a global artisans shop – but pushback is building from budding tycoons that also want to sell their own homemade items.
Q1 Takeaways: DQs down, ALL up, Big/Small WTF
In Three takeaways from the Q1 NCUA data, Dinny Lechman points out delinquencies (DQ) and charge-offs are down and far lower than expected, but CUs are still beefing up their Allowance for Loan Losses (ALL), perhaps out of a feeling that we’re not out of the woods just yet (and maybe it’s a use for all that excess capital?). My thought: how has underwriting been affected? Marketing needs to know if it’s tougher to get approved, or if you’re now able to lend to folks with a few credit bruises. This profoundly affects audience and message.
It was also interesting to see the big/small CU split in auto loan growth. Member experience matters A LOT, probably more than rate, and even large CUs can get it wrong. Again, get marketing involved in the member journey and experience. To put it another way, CUs compete against other lenders and factory financing using mostly speed and convenience; rate isn’t nearly enough.
Why didn’t CUs bet on this one?
Someone has come up with the idea to combine a lottery with savings accounts. For every $25 deposited, you get a ticket in the drawing, with a potential grand prize of $10m. Of course, most of the prizes are lower, and they include a scroll across their homepage that highlights those winnings. Even if you don’t win, you get a higher interest rate on your savings than most bank/CU savings accounts. The kicker? This idea isn’t even new. It was inspired by Premium Bonds, a bonds program started in 1956 by NS&I in the UK.
As if writers need more “people” picking at their prose
Now you can have anything you write, post or tweet analyzed for its Tone by IBM’s Watson. Watson scans your wording, then highlights and ranks sentences and phrases by various qualities – analytical, anger, confident, joy, fear, sadness, and tentative.
Of course our writers aren’t too sure what to make of this tool: “Linguistically, we know different groups use different registers and strategies. Plus women tend to use more hedging language even when they have high levels of confidence.” and “If you go too far down the route of pleasing the machines, then you’ll lose a lot of the appeal to people. Sarcasm, humor, snark, odd word choices, and other types of human “flavor” in print are very difficult for machines to grasp.”
So there has to be a balance. The software can point out some things to consider, and the human writer can decide what to do with that information.
Pride + CUs BFFs 4EVA
Linda Bodie’s heartfelt article “The gay agenda still matters” is a must-read on how much the CU core ethos has in common with all kinds of social justice.
On a personal note, I remember reading the employee handbook on my first day at Purdue Federal Credit Union right out of college many years ago. I was astonished and overjoyed to find that they extended spousal benefits to same-sex domestic partners. No fuss, no fanfare, just quietly doing the right thing decades before it was accepted practice. That was a key moment in my CU career; I wanted to work for ethical organizations like this.
Chime goes “Klunk”
There are several somewhat unsettling things to unpack in this article on trouble at Chime, from Propublica. Chime is a fintech offering mobile banking, and they’ve seen explosive growth. But lately they’re sounding some sour notes.
For one, there’s the whole issue of who they really are and who is regulating them. Chime says in the headlines that they do “banking”, but in the fine print, explain that they’re not a bank. You can’t have it both ways, but apparently you can? Chime is supposedly a vendor for the real banks backing Chime, but itself is not a bank.
This tactic is nothing new; PayPal and many other fintechs have carefully (and not so carefully) skirted this line to avoid regulation for years, leaving consumers without important protections – and without clear information on what they’re giving up. There are way too many complaints to ignore, and many seem to boil down to lack of communication, transparency or recourse, and often with very slow or no resolution or explanation. Chime is blaming widespread fraud and increased security measures, but is not explaining why they’re not communicating or dealing with mistakes quickly.
I feel a little twinge when Chime refers to their customers as “members”. That doesn’t seem right at all. Language matters. However, they’re also one of the first to find a viable replacement for the term “Checking Account”; they use “Spending Account”. Interesting.
All the above said, Chime is profitably serving a huge population of the underserved, including millions of younger people. Clearly, there’s a demand and an opportunity here that CUs weren’t filling. That’s worth thinking about.
Everyone wants 100% Remote Account Opening. EVERYONE.
In the department of things-we-all-know-but-probably-need-to-pay-more-attention-to… yes, pretty much all people, not just young people, want an easy, fast online account opening process that works on a mobile device. And yes, lots of credit unions already have online account opening.
But have you, personally, tried it out with a phone to make sure it actually works and takes less than five minutes? Could your Mom or your kid use it? Be sure to eat your own dog food: if there are barriers, you need to know about them.
Are you prioritizing potential members on your website? Sometimes one of the answers to “why aren’t we getting more online account apps?” is as simple as “uh, there’s no big shiny ‘Open an Account’ button”.
Plus, make sure you explain the process clearly before people get started. How long will it take, and what information will they need to gather? What will happen afterwards, and how quickly? Make sure this is the first thing people see before they jump in.
Above all, keep it simple. Incredibly simple. Every nosy question slashes response rate. Yes, perhaps asking about shoe size reduces fraud risk somehow, but it also greatly increases the risk they won’t finish the app. Get your mitts on abandonment data, and lead the charge to simplify.