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CU Snapshot

 Apr '18Mar '18
# of CUs5,7245,727
Total Assets
($ billions)
Total Savings
($ billions)
Net Cap.
Loans to Savings82.9%81.5%
Loan Delinq.0.8%0.8%

         Credit Union Indicators

Reach the 'Financially Unengaged'

Tips for bringing individuals into the financial mainstream.

A lack of engagement with a traditional financial institution not only leads to poor financial choices, but it also leads to severe vulnerability for those who are suddenly faced with a financial shock, according to the Center for Financial Services Innovation (CFSI).

That's especially concerning, as 39 million—or 16%—of Americans fall into what the CFSI calls the "Financially Unengaged" category, meaning they have either very little or no relationship with a financial institution.

In addition to leaving themselves vulnerable to financial crises, those found in the Financially Unengaged category face a variety of financial challenges, such as low levels of savings, poor budgeting habits, and an overall lack of confidence in financial skills. Other factors for this group:

Only one in three plans ahead for large, irregular expenses;

62% don't know how long they could make ends meet in the event of a sudden drop in income;

Only 22% have a regular savings habit; and

Less then one-third believe they have the knowledge and skills to manage their finances properly.

CFSI also finds that individuals who are financially unengaged are the least likely to have a checking account (more than a quarter don't), a savings account (50% don't), or a credit card (55% don't).

Credit unions can make a connection with this group, CFSI says.

First, partner with organizations that already have relationships with these consumers, such as schools, service organizations, or faith-based organizations.

Next, increase awareness about products that meet the group's needs to show the benefits of engaging with the credit union.

And finally, offering credit-building products and credit counseling services to make a deep impression on the typical financially unengaged consumer that has demonstrated a general misunderstanding or apathy toward their credit situation.

This article is part of a four-part series highlighting analysis of American financial health by the Center for Financial Services Innovation (CFSI). To read more, visit news.cuna.org.