Top 15 Post: Rob Carabelli

Too often, members are placed into banking products that aren’t the right fit. They’re sold a mortgage when perhaps a home equity loan is a better option. Or, they’re sold the freedom of a credit card without being informed of penalty APRs and an above-market interest rate. The mental and physical toll of a mismanaged financial situation can have drastic repercussions on an individual and their family. At McGraw-Hill Federal Credit Union, we’re proving that what’s perfect for the member is perfect for the institution, not the other way around. That fundamental principle is the basis for my project, The Financial Wellness Rating.

The project started simply – establish a Sales Team on-boarding process that provides a roadmap for the products and services a member should open within their first 90 days of joining the credit union. The objective was to grow share-of-wallet and tout our remote delivery platform. At the time, it appeared easy.

What transpired shortly thereafter could ultimately transform our sales and marketing culture. Utilizing MCIF data, I’ve developed a scoring system that assigns a cumulative point value to an employees’ interaction with members and rewards them for selling products and services based on the members’ propensity to purchase said products. For example, our demographic data shows retirees with low household income are not prime candidates for a mortgage refinance, but are traditionally rate shoppers who look for the best deals on deposits or auto refinances. To that end, employees are rewarded (via a proprietary, weighted formula) for selling these individuals a share certificate or a used auto loan to help them reduce their monthly payments or interest expense.

The Financial Wellness Rating is truly unique because it takes the ambiguity out of the sales process. It’s a direct line-of-sight to an end-goal that helps the credit union realize loan and deposit growth, as well as reduce the mental strain a member experiences when being sold a product that wasn’t right for them. It’s become a bit of a caricature in popular culture – the shifty used car dealer sells the family man a slightly used sports car when he knows full well that man needs a reliable vehicle to take his daughters to soccer practice every day. The dealer knows the car isn’t a fit, but he sells it anyway because it has a significant margin for the dealership and he’s awarded a month-end bonus when he closes the deal. This exact scenario is what The Financial Wellness Rating eliminates. The employee is still awarded points for selling products outside of the prescribed path, but the true reward comes from doing what’s right for the member.

With respect to where I am at with the progress of this project – we’re more than half way to getting this powerful tool into the hands of our sales team. An additional layer of this metric is the feasibility to incorporate it into our core system as well as make it user-friendly and visually attractive to the team. To ingratiate this tool into our culture, it needs to look and feel like a program that anyone can open and operate. Often, technology breeds apprehension - we want to dispel that notion immediately. Also, the scoring system itself needs fine tuning. The beauty of this formula is that it’s scalable to fit any financial institution. Credit unions can award points in a weighted manner that’s to their liking. Making the decision on how and when to award points may require a high level of organizational (and at the very least, departmental) strategic planning.

The Financial Wellness Rating has the potential to impact much more than an organization’s bottom line. It has the potential to transform a credit union’s culture if senior leadership embraces the power of financial wellness and the impact it has on consumers. Often, credit unions tout the tangible benefits of the business – lower interest rates on loans, higher rates on deposits. But ultimately, there’s an intangible benefit of financial wellness as well. Members who have the support of a financial partner that provides straightforward, honest counsel have one less worry, one less headache, and hopefully, one less reason to be sold a product that doesn’t fit their current life situation – like a slightly used sports car.