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It was a week ago today that I sat in a classroom at the Illinois Credit Union League with 20+ other finance professionals from across the industry at BarCampBank Chicago.

What is a BarCampBank you ask?

A BarCamp is an ad-hoc gathering (an “un-conference”) born from the desire for people interested in to share and learn in an open environment. It is an intense event with discussions, presentations, and interaction from participants interested in finance, innovation and/or technology. The aim of BarCampBank is to foster innovations and the creation of new business models in the world of banking and finance.

The agenda is set by participants the day of the event. What do you want to discuss? Learn more about? Give a session or lead a discussion on? BarCampBanks are devoted to sharing and learning in an open environment – all participant driven. This allows people to more easily connect with those who have similar interests.

Sounds cool huh? That’s what I thought. I attended a BarCamp proper (focused primarily on technology) last year and have been intrigued by the concept more and more after reading of other’s adventures with BarCampBanks across the movement. Last week was my first BarCampBank.

I’m a little late to the after-party – there have already been some great postings on last week’s event here, here and here. Here are a few of my take-aways:

1. Having no agenda beforehand actually can be productive. This was the part of the event that scared me the most because I tend to overprepare for everything. Also we plan all of the council conferences’ agendas months in advance. So staring at the blank board below was a little intimidating at the beginning of the day! But it worked. We went around the room initially and carved out topics people wanted to talk about…and then we discussed them. And the discussions never lagged – I was envisioning some sessions tapering off or dying mid-stream, but every session could have went over its allotted time (because everyone there was smart, thoughtful and not shy which helped too). I also learned something in every session.
2. Social media is still scary. We kicked off the day with a ninety-minute discussion of social media dividing the room into two separate discussions – the novices and the more advanced users. I led the “intro to social media” group with Carla Day and it’s always eye-opening to see how little some people know about social media what it is, how it works, etc, (not the attendees per se, but their tales of their colleagues, boards, IT dept, etc). I don’t know whether it’s because I’m immersed in it everyday, but there still seems an ignorance out there by some – I’m not saying every credit union needs to be on Twitter, I’m just saying your marketing department and others should at least know what Twitter is.
3. Deep dish pizza is still good. Lunch. ‘Nuff said.
4. Board relations can be improved. In one of the sessions, I was surprised to hear how little staff at some credit unions interact with their board of directors. Most information is funneled through the CEO. Not good if you are trying to get backing for new ideas. Maybe cajole a short appearance and/or presentation at the next board meeting?
5. Generation Y is still relevant to credit unions. One of the morning sessions I was in focussed on marketing to young adults and there was a general feeling that with the economic crisis and CU corporate issues in the last year, this issue was put on the backburner of many’s strategic plans. In 2010, expect to see this issue highlighted again – as it should be.
6. Anything is possible. After the BarCamp I attended in Madison last year, I wanted to hold a BarCampBank in Madison somehow. I got a group together to plan it, but it never got off the ground – months later I put something out on Twitter and it got the ear of friends Stacy Dugan and Carla Day. “Let’s do it in Chicago instead!” “How can I help?” Boom. We talked. We emailed. Six weeks later we were standing at the event with 20+ others from credit unions, leagues, CUNA, vendors and even one lone community banker. Sometimes all it takes for your idea to take shape is to say it out loud.

   

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It’s been a while huh? It’s been a long, busy year and didn’t want to think I forgot about you loyal YES readers (hi mom!).

Anyway, I’m posting today with an exciting announcement – the launch of a neat new site: www.cuwatercooler.com. It’s the brainchild of Matt Davis (aka Credit Union Warrior) and the premise is simple – assemble a team of editors to “bubble up” the most interesting articles around social media and credit unions. What are people talking about? What is worth talking about? Visit the CU Water Cooler.

I’m honored to be one of the inaugural editors and already I’ve been impressed with the breadth and depth of links posted on the site by others.

So check it out – Read. Add your thoughts. Connect. And keep on moving forward.

> CU Water Cooler
> CU Warrior’s blog post for more background on the site

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Time and time again throughout the last few days, YES Summit attendees heard the importance of parents on young adults’ financial decisions – whether it be in areas such as student loans, establishing a banking relationship, savings habits, and sharing advice.

Susan Follick, Segment Marketing Director at PSCU Financial Services, says you have allies in your attempts to get through to young adults—their parents. “This generation looks to their parents for advice. Leverage the relationship your credit union has with its members who are parents of Gen Y.”

Who cares? We should – Recent high school seniors’ test scores on finances are falling from previous years. With school system’s budgets strained, credit unions have a great opportunity to step up to the plate (banks already are – see Wells Fargo’s popular Stagecoach Island as one example).

How?
Provide financial education material to engage parents – some examples:

• Giveme20.com – website to educate 12-22 year olds
• “Parents” section on website

Financial products positioned as teaching/learning tools to teach financial life lessons, such as:

• Savings programs
• Reloadable prepaid cards
• Checking accounts w/debit cards
• Online banking
• Credit cards – age appropriate

Susan shared a few related best practices in product packages from credit unions across the country (click links for details of each):

• Apple FCU – Fairfax, VA: eXtras Student Checking
• Oregon Community CU – Eugene, OR: Remarkable Checking
• Pacific Service CU – Walnut Creek, CA: FirstStep Checking
• City-County FCU – Minneapolis, MN: boom! (Budgeting Our Own Money)
• CFE Federal Credit Union – Orlando, FL: Innovators Account for ages 15 – 17 & Horizons Account 18 – 22

Susan also said via email before the summit that one of the greatest challenges credit unions face in serving 18-to-30 year olds centers on new media. Sure, you need to be familiar with what’s hot online, but you have to be there yourself. Susan wants to change the thinking within credit unions on the importance of using new media tactics to reach Gen Y. She says, you have to get “over the fear of jumping in and trying it.”

>It is important to know what the major needs of the demographic are, and how credit unions are successfully meeting those needs. But it is equally important to stay on top of what is going on within credit union land so you can draw upon current information and knowledge to further develop effective programs for young adults. In the spirit of YES Summit sessions such as yesterday’s on Young & Free, as well as tomorrow’s session on NCUA’s 2020 initiative, this session provided another opportunity for attendees to learn about another way the movement is tackling the issue of better serving and attracting young adults.

Jeremy Presta, CEO of Parkside Federal Credit Union, led a session on 30 Under 30 – a program initiated by the Filene Research Institute to bring 30 young credit union professionals under the age of 30 from across the country together to develop solutions for credit unions to better serve young adults.

After giving an overview of the last year of the 30 under 30 program and all of the resulting projects from the group, Jeremy spoke about his own group’s project – iAdvancecu.com (actual site under construction):

A mounting talent shortage affecting all industries is projected to peak by 2010. This war for talent will make it even harder to retain top talent and credit unions alone – large or small – will not be able to compete. Combine this shortage with the reality that Generation Y will not only change jobs but careers numerous times, and it’s inevitable that this generation of employees will likely leave your credit union within 2-3 years. iAdvancecu.com, is a website that unites credit union opportunities, showcases our expeditious career-paths and provides testimonials of relevant Gen Y employees that will serve as a recruiting tool for credit unions. (this overview taken from Filene’s website)

> Click here for the full iAdvancecu.com Business Plan

Before he presented, I asked Jeremy what he thought the biggest challenges were facing credit unions in serving young adults:

1. Changing the mindset of not only employees and management, but also convincing the board of directors that we need to focus on this generation.
2. Generally speaking a member early on in the financial life cycle is an unprofitable member. There needs to be some foresight and see the big picture that down the road these members will become profitable, and be the members that we all want.
3. Typically credit union employees including management and board members themselves are of the older generations and they don’t understand and in some cases don’t care to ever understand or serve this generation.
4. Credit unions need to realize that simply setting up a Facebook/Myspace page is serving these individuals or connecting with them where they are.

At the end of the session, Josh Jones also talked a little about the transition of the 30 under 30 program from Filene to CUNA. In early 2009, CUNA will start the application process for the “new class.” I’m looking forward to continuing to be involved with the program in some capacity.

PS – I’d be remiss if I didn’t give a shameless plug for my 30 under 30 group’s project: “Win-Win Savings.” Read the full business plan here.

Resource Links:
CU Tomorrow Blog
Filene Research Institute
Overview & Links to all 30 under 30 group business plans

>In Wednesday’s late interactive session, attendees worked together in groups to create an “award winning financial education program.” The moderators judged all of the entries and have narrowed them down to the top three.

Voting is now closed and the winner will be posted shortly.

> Click here to view all the entries

>Sarah Shirley, Military Saves Director at the Consumer Federation of America, provided her perspective on the credit worthiness needs of a specific group within the demographic – young adults in the military. Even though the discussion was geared toward this specific group of young adults, there were broader ideas about saving and credit that apply to young adults in various life stages and situations.

Sarah’s key points:

• Patriotism is important to many young people
• Just because we know young people are interested in their credit scores doesn’t mean they are incapable of being interested in their net worth
• Helping others can be motivating to young people

My take:
(note that I lost a longer post on this session because my blogger account timed out before I posted – lesson to future live-bloggers: do everything in Word first.)

Where was Military Saves when I was in the service? It sounds really cool and is much needed.

When I was in the Army right after high school (’96-’99), I only knew how to balance my checkbook…nothing about money management, asset building, credit worthiness, or debt management. I was eager to do something more with my money, but didn’t know where to go for guidance (I also was too busy to dig too hard). My only big transaction was someone sold me a bad life insurance policy, which somehow sounded good at the time (all those graphs with my money getting bigger). Naturally, it was a waste of my money (I already had a $200,000 Army life insurance…and I was single with no dependents!), but I didn’t realize it for about five years and by that time, it was too late – the monthly payments I had put in didn’t add up to much.

I was an “untapped market” for sure. I wish someone led me into the credit union on base instead during those three years!

Now if I only invested that money…

Resource Links:
www.MilitarySaves.org
www.AmericaSaves.org
www.AmericaSavesWeek.org

>Unfortunately, when some think about young adults’ work habits, tired stereotypes come to mind – “lazy, inexperienced, un-motivated, naive…” Naturally this makes it harder to land a job they are qualified for, no matter what the resume says.

Philip Crocker, Director of Financial Literacy at Resource One Credit Union, like many young adults exemplifies the exact opposite of these stereotypes. He shared his experiences climbing the credit union ladder as a young adult and how he personally has had an impact at Resource One Credit Union. He also talked about Resource One’s financial education program and gave advice on creating financial education programs targeting young adults.

Key insights from Philip’s presentation:

• Ordinary People “Can Do” Extraordinary Things
• Believe in Your Staff – No Matter What Their Age or Tenure
• Cultivate – Plant – Nurture – Empower
• Realize that today’s Gen Y Employee may have different self-fulfillment needs than other generations of employees.
• Find the right person for the position – discover the person who has the desired characteristics, everything else can be taught.
• Create a Financial Education Plan that Works with Your Strategic Vision
• Do not re-create the wheel…
• United We Stand – “There is Plenty to Go Around”
• Create a Network and Use It – “Stay Involved”

Earlier, I asked Philip what he thought the greatest challenge is facing credit unions in serving 18-to-30 year olds. Here is his response:

Glad, you asked for my opinion. I certainly do not have all the right answers. Here is what I see as great challenges for my credit union as well as most others. I will answer this in two parts.

The first part is that the whole credit union movement has got to get better at courting and retaining this age group of consumers. Every credible article or information source that I read seems to suggest that this age group is at risk for flight. There seems to be a loyalty issue with this age group. In my opinion, I do not think that it is a loyalty issue. I just think that all of their options have been laid before them. These options are in their face through many different delivery channels. This age group can be influenced by so many more delivery channels than were previous generations. While every age group is susceptible to these same delivery channels, I think that this age group has embraced all forms of media for gathering information. This age group wants to make up their own minds and may not easily fall into the ranks with the way they conduct their personal finances. To many it appears to be a loyalty problem, but I challenge the industry to stay relevant and in their face. Which leads to my second part…

The second part is that we have to stay relevant to their needs. We have got to get away from throwing out a bunch of features and tying them into a bow and calling this “new product line” a Gen Y friendly alternative. How long or how far will an insincere attempt to try and grab this market really get a Credit Union? As a credit union or a “movement” we need to stay relevant with this age group and really pinpoint our product offerings, levels of service, and ease of doing business to meet their needs and not a business plan.

So in summary we need to gain their interest, keep their interest, “be relevant” or they will go somewhere else. There are still many choices out there, even though our landscape has changed lately.

>To kick things off for our first “official” session, attendees examined the personal finance attitudes & behaviors of young adults. This is important because it directly influences how people manage money and debt, their credit worthiness, and to what degree they are able to build assets. This is a good jumping off point for more focused sessions over the next few days – it lays the groundwork for in-depth discussions and specific areas of focus.

Mark Schwanhausser, Research Analyst of Javelin Strategy and Research, led the first data driven session – “Analysis of the Demographic: Personal Finance Attitudes & Behaviors. “

Key insights from Mark’s presentation:

Gen Y has growing economic clout.

• Will comprise 29% of population by 2017, outnumbering Boomers (77 million) and Gen X (88 million).

Gen Y: Two definitions of mobility.

• They move because they’re still establishing their lives.
• They will be the first generation of Americans to embrace the idea that their mobile devices will become a irreplaceable banking tool – a mobile wallet.

Gen Y consumers are not content with one channel or one payment method.

• They have stronger preferences for online channels and debit-card transactions, but they expect to have options and use them where they see fit.

Gen Y consumers want tools to help them manage and monitor their money.

• Gen Y use online- and mobile-banking alerts, personal finance management tools and education to help them stay on top of their finances.

It’s important to invest now to hook Gen Y.

• They are more likely to stick with the institutions they know and trust since they were children. Many will follow their parents’ guidance, with many starting out with credit union accounts.

My take:

Hard to argue with the numbers – great baseline for the rest of the conference. It’s important to get the facts because there are so many generalizations and assumptions regarding 18-to-30 year olds. What stood out to me is the fact that young adults prefer everything online – an assumption that is heard so often (Facebook! Mobile Banking! Twitter! And so on…). Instead, they prefer these options, but still expect to be able to visit a branch and do “normal” banking.

>I was delighted to read recently that layaway plans at retailers are making a comeback:

Layaway grew out of the Great Depression, where consumers could set aside goods they wanted and make regular installments until the debt was paid and they got to take the goods home.

The concept got shoved to the back of the storeroom in the 1980s, as easy credit begot a get-it-now, pay-later consumer culture. In recent years, retailers have put gift cards and their own profitable credit card rewards programs at center stage, turning layaway into an expensive, space-hogging, antiquated service.

> Read the full article here.

Layaway is good – unlike credit cards, you are working forward financially towards a goal instead of backwards. There is also less temptation to buy something now and think about how you are going to pay for it later. For young adults, this could be a whole new paradigm.

One thing that really excited me in the article was this new online development:

More than 1,200 merchants have turned to eLayaway, including Brookstone, Gap, Dell, HP, Apple Store and Bass Pro Shops. Two as-yet unnamed big-box retailers will become part of eLayaway’s virtual mall “very soon,” said Michael Bilello, senior vice-president of business development of the Tallahassee, Fla.-based technology company.

Like traditional in-store layaways — which have fees and cancellation penalties — customers of eLayaway pay a 1.9 percent transaction charge. Shoppers can stretch payments for three months to a year. Payments are automatically withdrawn electronically, and once the item is paid off, it’s shipped to the customer’s home.

If you check out the eLayaway site, they have a pretty attractive line on the homepage – “Debt-free credit building at its best!” And if you click around, you’ll see pretty much anything and everything.

What does this mean for credit unions? Consider a “layaway loan” to members - basically a loan in reverse. For loans for relatively small sums of cash, this could be a way to curb rising debt and boost responsible money management.

Out of curiousity, I did a quick Google Search for “layaway loan” and naturally there are already a few credit unions doing something similar (no banks…):

• Section 705 Credit Union
• Monroe Telco Credit Union (use scroll bar to scroll down for info)

Think about it – in these economic times, this is another way for credit unions to leverage their difference by offering something….different.

>About a month or so ago, Heather H. Harris– CU Enthusiast in Michigan, posed an interesting question to the DE list serve. She was looking for an alternative word for ‘Home Banking’ -

I know, I know…it’s a common word that most consumers understand and can relate to … however every time I type that “b” word I shudder — and cannot finish typing it!

I relate it to eating potato chips — once you open the bag, it’s hard to stop. And, I am personally very afraid to start using that “b” word because this “credit union enthusiast” believes in the power of words and their message.

I advocate “keeping purpose constant” and protecting credit union uniqueness — and if this consummate credit union enthusiast caves, what next?!

Help me get past it and over it — or remind me to stand firm.

The responses to her question were undoubtedly interesting and polar. The following were suggested alternatives and some reactions:

• Online Access
• CU’r money on line ; CU’r money on line
• Internet Branch
• Online bill pay
• Online account access
• e-Branch
• Online Branch
• Online transactions
• Visit your credit union online
• CU Online
• E-account; e-share
• E-member
• online finances
• financials
• Online branching
• Home branch
• Online member access
• CU Acce$$

“Online banking is a verb and the way people refer to the act. Trying to use something else will confuse your current and potential members and they will avoid the product because they won’t understand what it is. Don’t let the word hang you up. Your job is to grow the credit union, make it stronger and make sure it is there for future generations.”

“I’ve dabbled in the use of “b” word from time to time but only when there was no other alternative and then I’ve gone back to more comfortable phrasing. While it is true that banking is a word with strong identity so is anything that references accessing your finances via PCs or other devices. Stay “b” free if possible.

“…And with the image of banks today, I believe we should establish this as the generic verbiage for credit unions like on-line banking is the 4 letter word. Let’s separate credit unions from those guys!”

“This issue of terminology seems to be endemic to CU land, dividing the cooperative purists from those who say – let’s get with it and use current financial services terminology. …It’s hard to fight the trend.”

“We’re only going to marginalize ourselves if we don’t use the common language. Like a trout swimming upstream all year long!”

“The problem is not with the B word. The word “banking” is defined as the business of a bank. That must mean that we need to define what the business of a credit union is…”

“It’s dangerous for credit unions to continue to straddle the fence … you’re either a bank or you’re a credit union. We need to stop blurring the lines because their failures become ours in the mind of the consumer.”

What do you think?