Oklahoma credit union relies on data to shape financial wellness tools

When TTCU Federal Credit Union in Tulsa, Oklahoma, began exploring ways to help members manage their credit scores and improve their overall financial health a few years ago, it turned to a fintech for answers.

The credit union deployed its first real-time scoring product in 2019 through a partnership with SavvyMoney, a Dublin, California, financial technology firm that specializes in providing financial institutions with an analytics platform for reviewing member account data and assisting in launching tailored marketing campaigns.

"Credit scores are a vital component of our members' financial lives. … Providing them the means to track their scores and proactively work towards improving their scores directly contributes to our members' overall financial health," said Jeff Baenziger, vice president of digital strategies for the $2.7 billion-asset TTCU.

By employing key data from members who opted in to using the product — including recent card payments and borrowing activity — TTCU originated more than 611 loans totaling $13.6 million. Though that was a relatively small portion of its overall $1.7 billion lending portfolio last year, the loans satisfied a niche need that otherwise would have gone overlooked.

Wealth tools such as the scoring product can help the credit union better understand the spending habits of its members and develop pre-approved offers for financial products that deepen its relationship with members, Baenziger explained. That ability furthers its "financial wellness strategy for educating and empowering our members to have control over their financial lives," he said.

Solid financial planning is vital for younger consumers, many of whom are quickly defaulting on credit card payments as interest rates and inflation continue to rise. To help them, many credit unions have launched tailored financial planning programs and other products for millennials and Generation Z.

JB Orecchia, president and chief executive of SavvyMoney, emphasized how integral credit scoring is when determining how fast a consumer is able to address accumulated debt and those who continually manage their accounts are more likely to stay on top of scheduled payments.

"It's so important to build a good credit history and to establish yourself when you're starting out in credit, because it's going to be the cost of borrowing money. … Over time, the higher interest rates are going to keep you from building wealth," Orecchia said. 

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Despite recession worries and the implementation of the Financial Accounting Standards Board's accounting standard on current expected credit loss, or CECL, credit union leaders and national trade organizations are optimistic that last year's strong growth in loan balances will continue through 2023.

The collapses of Silicon Valley Bank and Signature Bank have made many consumers more mindful of their accounts and fueled credit unions' appetite for growth, says Curt Long, chief economist and vice president of research for the National Association of Federally-Insured Credit Unions.

"In the current environment, households are a lot more sensitive and aware of what they're earning on their savings, so I think credit unions sort of can compete in that dimension, where previously it was a bit all on the loan side," Long said.