Financial education: A key credit union differentiator

Increasingly nuanced consumers are looking for increasingly unique financial products, but developing and delivering those solutions is just half the battle. Credit unions still need to ensure their members have the financial education and understanding to use them effectively.

Picture the scene: You’re perusing the menu at a restaurant and your server approaches. “Ready to order?” they ask, but you’re indecisive. “I’m thinking… salad?” You shrug, squinting at the menu’s veritable cornucopia of salad options. The following exchange could go a few different ways. “OK, I’ll come back,” the server might say, wandering away, leaving you to wallow in your analysis paralysis. Conversely, that same server could reply, “Do you like Greek salad? Our Parthenon Bowl is amazing. The feta is sourced from the same farm as the greens. And our house Greek dressing is tops. There’s fresh oregano from the chef’s garden and freshly squeezed lemon juice! You’re going to love it.”

The best servers know that being engaging and educational—letting the customer in on those juicy, freshly squeezed lemon details—is critical for market differentiation. Anyone can serve up a salad, but there’s a reason secret sauce recipes are stored in vaults.

So as another National Financial Capability Month comes to an end, now’s a good time to hit refresh on your credit union’s approach to financial wellness and education—a key and often-underutilized differentiator for credit unions seeking ways to balance mission and margin at the intersection of services and solutions.

Speak to the human experience

“We live in an age where anybody can look up the technicalities of finances—the names, terms, product specifics etc. but information on deeper, more personal nuances are still somewhat inaccessible to the general public,” said Marshall Moore, a former high school teacher turned credit union financial educator.

“Credit unions can transform the member experience by committing to truly member-centric financial education.

“By taking the time to guide members to financial solutions that resonate with their particular psychology, lifestyle and needs, credit unions can differentiate themselves. It’s a tangible example of the Credit Union Difference.

“Just asking open-ended questions can help,” Moore added. “By facilitating a conversation where the member begins to answer some of their own questions, it helps connect them, personally, to the solution.”  

Moore’s sentiment is further emphasized by Cara Macksoud, CEO of the financial behavioral finance organization, Money Habitudes.

"Your financial behaviors are absolutely intertwined with your lived experiences,” said Macksoud. “Credit unions have to approach financial education with an understanding that each member's financial decisions are influenced by their unique background, challenges, and successes. Generational behaviors and cultural influences shape our financial behaviors much more than any off-the-shelf financial education program ever could. Augmenting those financial education programs to understand and account for that level of individuality is critical.”

Cut through the noise

Like Macksoud, Moore also agrees that augmentation or enhancement of traditional financial education can help credit unions cut through the noise. 

In his role as a community development advocate at Colorado’s On Tap Credit Union, Moore has focused on developing financial education programs for specific member demographics, including the much-mooted Gen Z. “By making money relatable, we can shift the perspective of budgeting and financial literacy from dutiful and systemic to individual and even joyous.”

Moore referenced studies like this one that emphasize Gen Z’s penchant for sticking with trusted brands (think Big Old Bank) as a barrier that education can overcome. “It’s really that old credit union phrase: ‘Not for profit, not for charity, but for service.’ That’s what we can lean into,” said Moore. “That is a place where credit unions can differentiate themselves”. 

Audra Pettus, director of community engagement & financial wellness at Johns Hopkins Federal Credit Union, is quick to build on Moore’s point.

“I've worked at both banks and credit unions,” said Pettus.

“In fact, I came up in the banking world. In truth, both institutions deliver financial education but a difference I see in credit unions is their commitment to member-centric financial education.

“The Community Reinvestment Act places an obligation on banks to deliver some financial education, and a number of them certainly go beyond just ticking a box but it’s still not necessarily institutional. What differentiates credit unions is the philosophical, emotional component. Credit unions are strategically committed to providing core financial education, and then adapting or enhancing it to meet the exact needs of an individual member. That takes a special kind of commitment.”

Leverage the cooperative principles 

Pettus also observes that big banks and neobanks are often competitors, while the cooperative principles encourage a shared learning approach across the credit union system.

“Credit unions collaborate. We’re not worried about encroaching on territory. Instead, we share our best practices. We say, ‘Hey, this is working in my community. Why don't you try it in your back yard?’ It’s a cooperative system, coming together, sharing resources and best practices.”

This cooperative, collaborative approach to financial education was something Macksoud was quick to adopt when she took over Money Habitudes in 2022.

“We can’t help credit unions at scale if our product is being used, with lessons learned, in isolation,” Macksoud explained.

“We’ve really focused on building an internal community through Monye Habitudes, too. It’s an opportunity for financial education practitioners to connect with us and others, to ask questions, to poke holes, to identify opportunities—and then we, as a partner for credit unions, can aggregate that knowledge, those insights, and infuse it into the ongoing training and support we provide. It turns what could be a static financial education product into a more organic, responsive, evolving support system for credit unions.”

Mission meets moment

It’s clear, there’s an opportunity—and a roadmap—for credit unions to go beyond traditional, fundamental financial education, and deliver more refined, focused programs that meet members where they are on both cultural and socioeconomic axis.

“Credit unions were founded to provide financial services for communities that the traditional ones weren’t providing,” said Pettus. “Nuanced, focused, member-centric financial education remains an underdelivered community resource, so we have an obligation to provide it. And when we do, we see the dividends. We see the member loyalty, brand awareness, and even uncover relevant data to inform what comes next.”

If you’re looking to rethink your strategy, make financial literacy a more prominent part of your brand, or just up your game when providing financial capability and financial education resources, reach out— we’re here to help.