Greenlight Financial Technology, which developed a family banking app to help parents teach their children about healthy spending and savings practices, has debuted its inaugural credit union service organization.
The CUSO is aimed at credit unions interested in adopting the Atlanta firm's Greenlight for Credit Unions product. The launch was backed by the strategic investment capital firm Curql.
After Greenlight introduced its offerings for
"As we talked to a lot of industry experts, what we kept coming back to was that there's no better way to support the credit union industry and signal that you are a collaborator than by launching a CUSO," said Matt Wolf, senior vice president of business development for Greenlight.
Members of partnering institutions can register their children for the Greenlight app and accompanying debit card, which offer automated allowance disbursements, real-time transaction notifications, chore tracking, flexible spending controls and more. Funds are insured by the Federal Deposit Insurance Corp. while kept on the app but can be transferred into an account with a participating credit union with backing by the National Credit Union Administration.
The app also includes the "Level Up" game launched in January, which offers tailored challenges and minigames that seek to teach kids basic banking concepts. This, Wolf said, is key for fueling future membership growth and keeping consumers captivated.
"This isn't really a huge play for short-term deposit growth because an 11-year-old typically doesn't have a lot of money in their savings account. … It's really more about how you as a financial institution engage with and acquire those next generations of members," Wolf said.
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One such institution is South Bay Credit Union in Redondo Beach, California, which began working with Greenlight in
The $153.4 million-asset South Bay offered minor accounts to members long before its partnership with Greenlight, but "were missing the practical application for financial education for those accounts" and needed "an innovative way to promote fiscal education and responsible money management" to younger members, said Paris Chevalier, president and chief executive of South Bay.
"I'm a big believer in our 'people helping people' ethos, and financial education and wellness are essential for credit unions because they align with our mission of serving members and communities while also ensuring financial stability and growth," Chevalier said.
South Bay executives say the credit union experienced its highest influx of new members in more than a year shortly after it began offering the Greenlight app.
As part of the growing emphasis placed on financial literacy and wellness, banks and credit unions alike have worked with firms like Greenlight to strengthen internal offerings.
The $548 billion-asset
Others include the $7.7 billion-asset
"When we think about helping people reduce spending, it's not necessarily about looking at the different categories and figuring out where can you cut back or where can you add. … Sometimes it's just about being more conscious when making spending decisions," said Rachel Lauren, co-founder and chief operating officer of Debbie.
Experts with Stanford University's Institute for Economic Policy Research said that in addition to the benefits these tools provide consumers, financial institutions gain more financially savvy clients who can better manage their debt and deposit more money.
"We see that more financially literate people are more likely to use financial advisors, so financial literacy is not a substitute but a complement to financial advice, and yet again the financial sector can benefit from more financial education," said Annamaria Lusardi, a senior fellow at the institute.
For banks and credit unions struggling to adopt modern technology, partners can help.
"CUSOs are crucial for sustaining and growing the credit union industry by providing scale, expertise, risk-sharing and fostering innovation," said Nick Evens, president and CEO of Curql.
