Group Proposes 'Breakthrough Innovations'

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Looking for some outside-of-the-box ideas? How about five of them?

The Filene Institute's i3 group met here and five of its teams unveiled details on the innovative projects they have been exploring.

The i3 group was created to bring together credit union executives identified as creative thinkers interested in developing and pursuing innovative ideas.

The group's original 26 members have recently added 13 more people to their ranks, applicants, the Filene Institute said, "underwent rigorous tests of their interpersonal, intellectual, and creative and leadership skills to join the i3 group."

"The ideas from the i3 group at the Austin meeting demonstrate the power of creativity, cooperation and collaboration," said Mark Meyer, Director of Innovation for the madison, Wis.-based Filene Research Institute. "It is evident that there is a high probability that in the future this group will bring forth a breakthrough innovation that will not only transform the credit union industry, but the entire financial services arena."

One Account

Imagine having just "One Account"-comparable to a product offered by The Royal Bank of Scotland since 1997-which pools a member's mortgage, income, savings, loan and credit balances into a single account similar to a large-adjustable home equity loan.

By offsetting a member's saving and income against his mortgage and other loans, the One Account charges a lower interest rate to a lower level of net borrowings than paid on member's individual loans.

Contract Job

Move over Amway! A second group presented Moneyworks-a program designed to allow independent contractors, or "advocates" to market and sell credit union services to families and friends, providing a low-cost delivery channel for credit unions. Following the lead of other multi-level marketing organizations such as Amway, advocates undergo training and hold events where they provide information about the credit union's services, products and special promotions.

Wider Channels

A third team identified the need to change the way mortgages are offered. Credit unions hold just 2.4% of the mortgage market, according to a 2002 Forrester survey. The team proposes to "widen the channel" by making it possible for small- to mid-size credit unions to offer full-service mortgages. This has already been tested with Affinity Plus CU, St. Paul Minnesota; and Chevron-West FCU in Salt Lake City. Affinity CU helps Chevron CU by providing access to its server, software and back office technology. Chevron FCU makes the initial contact and maintains the all-important relationship with the member.

Reward Offered

Build savings by spending money? Another group is reviewing how credit unions can differentiate themselves with "rewards" and loyalty programs. One proposal takes a percentage from a member's purchases at a retailer and directs the funds into a special tax-deferred education savings vehicle. Funds earned are then invested into a long-term tuition fund for the member's children. Family members can also sign up to help the children's college fund.

No Kidding

The Youth Savings Account offers a response to the low savings rate of Americans and young people. According to the team working on the project, the lack of savings is a national emergency-the U.S. savings rate fell to near zero in 2004 and 25% of American households are asset poor.

The Youth Savings Account will offer a $2.50 to $5 a month matching savings deposit as long as a parent maintains at least four accounts with the credit union.

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