nicole haverly 2016 cues next top credit union exec presentation
TRANSCRIPT
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Nicole HaverlySenior Portfolio Manager Affinity Plus Federal Credit Union ($1,839M) Saint Paul, Minnesota
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"A penny saved is a penny earned:" Savings Accelerator Program
2016 CUES NTCUE Competition
Nicole Haverly - Senior Portfolio Manager October 24, 2016
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• Past Inspiration to Current Motivation
• Evidence through Data
• Concept and Strategy of Program
• Quantitative Statistics
• Impact: Employees, Members, Organization as a whole
• Looking Ahead
Overview
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Past Inspiration to Current Motivation
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Past Inspiration: Goal to Reality
"Develop your dreams. Advertise your goals. Execute your plan. Close the sale."
Michael Dooley
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Traditional Strategy vs. Strategic Innovation
Current Motivation
• Where to Play: Member needs and experience • How to Play: What we offer is a win-win-win • How to Win: Value all around
Sniukas, M., Lee, P., Morasky, M. (2016). The Art of Opportunity. Hoboken: Wiley.
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Evidence through Data
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Survey Results
Google Consumer Surveys Sample: National adult Internet population
Are you satisfied with the amount of money you save each month? [Results for all respondents]
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Survey Results
Google Consumer Surveys Sample: National adult Internet population
Are you satisfied with the amount of money you save each month? [Results for 25-34 yr olds]
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Survey Results
Google Consumer Surveys Sample: National adult Internet population
What percentage of your income do you put into savings in an average month? [Results for all respondents]
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Survey Results
Google Consumer Surveys Sample: National adult Internet population
What percentage of your income do you put into savings in an average month? [Results for 25-34 yr olds]
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Survey Results
Google Consumer Surveys Sample: National adult Internet population
If your bank or credit union built in an automatic savings plan with your regular car payments, would you choose this product as a way to grow your savings?
[Results for 25-34 yr olds]
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Survey Results
In general, how secure do you think your members feel with their current savings balance?
Do you feel that a lack of adequate savings account balances contribute to auto loan delinquencies and
defaults at your credit union?
SurveyMonkey Sample: CU employees and executives
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Concept and Strategy of Program
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Savings Accelerator: Program of interlocking gears
Large accumulation of savings once you pay your loan off
Reduced rate on
your new auto loan
Increased rate in your new savings
account
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Interlocking gears
Up to $2000 = 1.0% APY
1) Increased rate on your new savings
• Unknown savings rates on own accounts
• Millennials have not experienced the magnitude of compound interest
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Interlocking gears
2) Reduced rate on your new auto loan
• Thrifty and Frugal: Groupon, Cartwheel, Airbnb, etc.
• No layered products gimmicks
0.00%
0.05%
0.10%
0.15%
0.20%
0.25%
0.30%
0.35%
0.40%
0.45%
0.50%
< 620 FICO 620-669 FICO & NoScore Borrowers
≥ 670 FICO
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Interlocking gears
3) Large accumulation of savings when loan is paid off
• The "unexpected expenses"
• Laying the foundation with $1000
• Your sinking fund
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Quantitative Statistics
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Statistics of Savings Accelerator loans
$13,612 Average loan amount
WA FICO: 665 Range: 497 - 850
WA DTI: 30% Range: 10% - 82%
WA LTV: 95% Range: 40% - 141%
WA Term: 61 months Range: 24 - 84 months
WA Rate: 5.40% Range: 1.94% - 11.99%
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Goal: Millennials
4%
42%
19%
22%
10%
3% 1%
< 20
20 to <30
30 to <40
40 to <50
50 to <60
60 to <70
>= 70
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Goal: Attract new borrowers
9
1
4 2
4
1 2
1 3
1
6
12 13 13
8
13
20
0
5
10
15
20
25
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Quantitative Measures
27
71
114
140
0
20
40
60
80
100
120
140
160
June 2016 July 2016 August 2016 September 2016
Loans Originated
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Quantitative Measures
$2k
$8k
$12k
$14k
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
June 2016 July 2016 August 2016 September 2016
Interest Saved
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Quantitative Measures
$14k
$20k
$32k
$43k
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
$50,000
June 2016 July 2016 August 2016 September 2016
Savings Accumulated
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Impact: Employees, Members,
Organization as a whole
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Employee Experience: Corinne Loe
• Champions the concept
• Every member matters; no one left behind
• Passion to create change and imbeds optimism
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Member Experience: Ce'Airra T.
• 26 yr old millennial
• "Able to save for certain things, but struggles if not tied to something specific"
• "This forces me to save, regardless of a thought out plan"
• Music career: CiCi Bella http://www.cicibella.com
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Organization: Core Values
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Organization: Financial Soundness
• Potential of reduced interest income and increase in interest expense
• Offset with reduced probability of charge off and credit union's added protection in event of default
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Looking Ahead
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CFPB Study
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Exposure
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Importance of Future Actions
• Provide accessible, robust resources
• Get ahead of the payoff to provide impactful financial advice
• Concept is scalable and relevant
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Thank You!
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Q&A with
Nicole