Building a Stronger Community: The Power of Financial Inclusion in Credit Unions
Credit unions play a vital role in championing financial inclusion by providing affordable and accessible financial services to all members of their community. Unlike traditional banks, credit unions are uniquely positioned to promote financial inclusion, especially in underserved communities, because of their member-ownership models. Not only is the core principle of financial inclusion good for the member, but it also benefits the credit union through improved decision making, a more expansive membership pool, and improved member loyalty - all driving toward an improved bottom line. So how can credit unions ensure inclusivity is a priority in all service lines and strategies? We recommend a three pronged equity and inclusion strategy to ensure lasting credit union success - member inclusion, employee inclusion, and board inclusion.
Member Strategy
When crafting your member inclusion strategy, start by asking: Which members of our community do we need to work harder at including? What obstacles are currently preventing potential members from accessing our services? How can we anticipate the evolution of member needs and proactively work to accommodate those future needs?
For certain communities, offering free or low cost checking and savings accounts, low-interest loans, and second-chance checking accounts for individuals with poor credit history is a great way to meet member needs. Other members require seamless integration with an investment platform. Offering a variety of financial literacy programs can also help members learn about budgeting, saving, investing, and feel more empowered and included. It's also crucial to recognize that a member's financial needs and knowledge evolve over time. The products and educational resources that attract them initially might not be sufficient to maintain their engagement or support their long-term financial well-being
Credit unions must also recognize the barriers some members face in accessing services. Many communities may lack convenient access to branches and traditional business hours may not align with members' schedules. Consider expanding online and mobile banking offerings to be inclusive of your members. In addition to physical accessibility, it’s important to consider methods of communication, potential language barriers, and other unconscious biases that may hinder member inclusion and experience. Credit unions should regularly audit their lending practices to find ways to eliminate bias. Proper data collection and analysis can go a long way toward building bias free practices and a healthier community.
Additionally, Credit unions can partner with community organizations to provide financial services and education to underserved populations. This can help to break down barriers and build trust within the community while also providing a meaningful community reinvestment vehicle that may position the credit union competitively to cope with potential future regulations. Outreach to underserved communities is critical in expanding the definition of community and creating a more financially inclusive society.
Continuous member education and a diverse range of products with a tailored approach to service delivery gives Credit Unions the power to meet member needs, while building a reputation for community inclusion. Inclusive products and practices foster long-term member loyalty, contributing to the financial well-being of both individuals and the credit union itself.
Talent Strategy
Building a team that reflects the community you serve is a powerful step towards inclusion and equity. Start by asking: Is our organization reflective of the community we serve? How can we attract and retain talented employees who represent their needs and backgrounds?
Instead of relying solely on traditional job boards and professional networks, expand your access to the talent pool by building relationships with local community organizations and educational institutions serving underrepresented groups. Consider non-traditional pathways to employment and remember that diverse teams are proven to perform better. Every opportunity to engage with the community is an opportunity to find the talent of tomorrow, so make sure to build meaningful partnerships and build your brand as the employer of choice. Through expanded partnerships, you'll gain access to a wider range of qualified candidates and create a more representative workforce. Don't hesitate to celebrate your successes and highlight the values you share with your community. Articulate what makes your credit union exceptional, particularly how you nurture and promote talent from within – it strengthens your connection with members and reinforces your commitment to their success
A meaningful inclusion strategy is not just beneficial, but essential for attracting and retaining the talent of tomorrow. Employees need to feel a sense of belonging and alignment with organizational values as well as envisioning themselves as the future leaders of your credit union. Consider talent development, internship, and mentorship programs that can engage and elevate the voices of your employees and by extension the community.
Board Strategy
Planning a board approach to equity and inclusion requires more than just including community members. Credit Unions need to carefully consider how to truly elevate the voices of the members they serve and ensure they have a meaningful impact.
Credit unions can increase board diversity and inclusion by making a commitment in their governance policies and expanding their development and nominations practices. One way for a credit union to demonstrate commitment to financial inclusion is to create a board committee designed to further the organization’s efforts. This might include training the board, mentoring diverse staff, or developing board succession plans through outreach to underrepresented communities. Attending community events, networking with professional organizations, and preparing those individuals for board service is critical to ensuring a pipeline of representative talent. The board can also ensure more balanced community representation by instituting term limits and staggering terms to ensure more frequent opportunities to join the board. Instituting a policy of self-nomination can also encourage members of diverse backgrounds to serve. In addition to expanding the talent pool for board members, the nominating or executive committee should establish clear metrics and scorecards to ensure candidates with the right qualifications are considered regardless of their background or potential lack of connection to the existing board. Regularly audit the board practices and track your efforts over time so that you know which efforts are having an impact and which efforts need to be abandoned in favor of something new. We know that diverse groups perform better, so a diverse and representative board is critical to ensuring a stronger credit union and exceptional member experience.
Credit unions make a significant difference in the lives of millions of people by providing them with access to affordable and accessible financial services. By promoting inclusion and representation, credit unions are prioritizing their own long term sustainability while also helping to build stronger communities and create a more equitable financial system where everyone has the opportunity to succeed.