The results of a National Credit Union Foundation research grant are in—and show that statistically significant improvements are within reach for all credit unions.
As the nation continues to navigate the ongoing economic repercussions of the pandemic, record inflation and a cost-of-living crisis, it’s no wonder credit union employees are as financially vulnerable as the 126 million members they serve.
Credit union leaders are increasingly conscious of this, and are actively implementing support systems for their Financial First Responders.
Now, a study from the National Credit Union Foundation shows that even a simple email can have measurable impact on an employee’s financial well-being.
Start at home
Launched in mid-2020, the Foundation’s Start at Home grant project sought to determine if encouraging employees to split their paycheck—i.e., send part of their earnings directly to savings—could establish positive savings behaviors.
Alabama Credit Union (ACU), Credit Human and Educational Employees Credit Union (EECU) participated, with research leaders at Duke University’s Common Cents Lab and the University of Southern California designing the study and overseeing the effort. And after several months of analysis, the results are in.
Simple steps make a difference
The project execution was relatively simple. Employees not already splitting their direct deposit were randomly assigned to a Control (business as usual) or Treatment (intervention) group.
The Control group received two emails including financial health tips. Treatment participants received the same information while also being encouraged to put a specific portion of their direct deposit into savings.
Across the three credit unions, there was a 7.5 percent uptick in Treatment employees who chose to split their direct deposit during the study. Less than two percent of the Control group did.
“Generally speaking, if something isn’t mandatory for our employees, we don’t get a lot of buy-in,” said Mike Jones, member education director at EECU. “When we saw we had nearly a six percent response, we were really excited.”
Ted Coy, Director of Innovation at ACU echoed Jones’ statement. “We had three to four percent uptake. That might sound modest but if those results had been for an auto loan campaign, we’d be throwing a party.”
What you say matters
Credit Human saw almost an 11 percent increase within their Treatment group. The organization’s Chief Governance Officer, Evelyn Fedako, believes the high uptake could have been the result of extensive—coincidental—internal conversations about improving financial health.
“Our intervention emails ran shortly after extensive conversations about Credit Human’s efforts to increase financial slack for members and employees,” Fedako said. “Financial slack is about helping our members and employees access additional resources for unexpected expenses. This is a key element of our mission and I believe the coincidental timing may have helped with uptake.”
The report also shows that while there’s an understandable reluctance to tell employees what to do, especially when it comes to money, it can actually have positive outcomes. The treatment emails were very specific, and even spelled out what percentage of their paycheck employees should consider depositing into emergency savings. The data shows employees had a positive response to that distinct direction.
Action leads to improvement
At EECU, 81 employees took the Financial Health Network’s FinHealth Score® Survey before and after the email intervention launched. The results were eye-opening: When responses are compared from before and after the study, the project’s research leads estimated that treatment increased EECU employees’ FinHealth scores by eight percent. Even more impressive, in a sub-score that specifically addressed savings, scores increased by roughly 20 percent.
“This is an exciting finding that comes with an asterisk because the population was so small,” said Mariel Beasley, co-founder of Common Cents Lab and one of the research partners. “However, this is extremely promising and I’d like to see it replicated with a larger group.”
Cost effective for any credit union
The three participating credit unions have all expressed interest in continuing or scaling this intervention—and the Foundation’s grant report provides all the information for other credit unions to follow suit.
“This project had a relatively small sample, but we saw quite encouraging results,” said Jeremy Burke, senior economist at the Center for Economic and Social Research, University of Southern California.
“The approach needs to be repeated and validated at scale, but the directional evidence demonstrated through Start at Home—and the minimal cost required to implement a similar intervention elsewhere—should be encouraging for other credit unions.”