Fintech for the single parent

In the credit union industry, there is a lot of discussion about the member’s journey and being their financial partner on that ride. We’re there to help them through significant financial crossroads in their lives, such as getting married, buying a home, or helping save for college.

A demographic that is often overlooked – and often underserved – are single parents. According to the U.S. Census Bureau in December 2011, there were approximately 13.7 million single parents in the United States, and those parents are responsible for raising 22 million children.

When one person has taken on the role of two parents that single parent now has a schedule stretched to the breaking point. In a typical day there usually isn’t time between family and work obligations to set aside significant time to get really in-depth with finances. Keeping up with the bills and regular expenses can be challenging enough, not to mention the vagaries of child support and/or alimony payments.

That is why single parents are an extremely important group to think about if you are truly interested in being a financial partner. By using personalization, data and predictive analytics, credit unions are now better armed to create retail banking experiences that focus on these members. The ability to pinpoint members’ needs and deliver on them will enhance satisfaction while connecting the credit union with every possible customer opportunity.

As a single parent myself, my time is an important commodity and having a partner in my financial life would be a huge help. Since I don’t have a physical partner to share a financial life with, I need my financial institution to be that for me.

For years I have done my banking at a very large regional bank and at a local credit union. Neither has offered me the range of financial service options I need to manage my financial life, so I’ve figured out some ways to make my financial life easier to manage on my own. In short, traditional banking has let me down and missed a significant lifecycle management opportunity.

So, what are the core needs of single parents and how can you fit in?

Take the Chore Out of Bill Management

It is important, especially on a tight budget, to plan when to pay bills and how much to pay. Missed payments due to lack of planning not only damage credit ratings, they can put someone behind in a way that never seems to allow them to catch up. This can be disastrous if the overdue bills affect basic life needs.

Credit unions are already offering bill pay options that make it easier for members to organize and pay bills.

Stop thinking just in terms of bill payment and start thinking broader, in terms of managing bills. Make bill management part of online banking through automatic bill tracking, due date notifications, and easy bill pay options.

I only get paid a few times a month but there are bills coming due all the time. One of my mobile banking options offers eBills and Bill Pay. I set it up to receive electronic versions of my bills online instead of in my mailbox, and I manage them securely in one place with one password.

I’m able to aggregate my accounts and bills in one place for a complete picture. Then it gives me the ability to pay those bills directly. When a new bill comes in I receive an email then I just open the app, and either pay right away or schedule a payment for later (maybe once a paycheck hits my account).

Credit unions have gradually realized that members want to handle all of their banking business via mobile tools. Better bill management is an opportunity for credit unions to nurture relationships by finding ways to be there when you need them.

A comprehensive mobile banking experience that lets me do more than just check my balances and make transfers is a must for members and if you have an awesome mobile experience for single parents you might just have a member for life.

Cash Flow Management Is a Must

As a single parent, budgeting is a challenge. When there’s only one income to work with, there’s nothing else to fall back on, so budgeting is a must. Even single parent with a good solid income and financial knowledge sometimes finds themself staring at their bank account, wondering which bills they can get away with paying late – and still give their kids a decent life. Offering a digital financial management product – especially one that can show cash flow trends –  to your members allows single parents to set up budgets and track spending.

Online personal financial management (PFM) tools provide your account holders with real advantages that few competitors can offer, and they’ll enjoy the convenience of being able to manage all of their financial relationships on one screen.

PFM tools help credit unions deepen relationships with consumers and differentiate financial institutions by making it easier for members to keep track of their financial picture. Members won’t be satisfied with basic budgeting and transaction analysis.

They want robust analytics, proactive recommendations and even interactive gaming tools to help them improve their overall financial health.

Providing a comprehensive PFM tool will position you as a true advocate for customers financial well-being—and that is something that helps single parents sleep soundly at night!

Saving Is Not an Option

For many single parents thinking about saving or investing can be scary. More often than not, setting aside extra money isn’t always possible. One reason I haven’t been that aggressive with investments is I thought if I set aside money outside of my regular savings, my money would be tied up in an emergency. Little did I know that wasn’t the case – but no one was there to guide me.  

Recently I started using Betterment, a robo-advisor that helps take the stress and guesswork out of investing. Because my income is tight, I just contribute a little at a time, but using a robo-advisor has been a huge help.

I signed up, chose the type of account I wanted, then set a goal and a risk level. It automatically transfers a small amount each month and the robo-advisor does the rest by managing my portfolio and reinvesting dividends on my behalf. I simply check in every month or so to see how things are going and I have peace of mind knowing I’m saving for my future without having to worry about all the tricky stuff.

Credit unions have a huge opportunity here to reach out to members about their brokerage services. Credit union investment representatives are there to talk with members about goals and take into consideration a complete financial picture, but being able to mix that personal service with technology that allows a single parent

No Time For The Branch

Credit unions already know that mobile banking drives operating efficiencies and creates new revenue opportunities. It also makes for stickier relationships. That is why a strong mobile presence mixed with great in-branch relationship building is imperative to add value to members’ lives.

Mobile deposit allows single parents to deposit checks without physically going to the bank – no need to mail in checks or make a trip to the branch during banking hours. They just take a picture of the check, submit it to their credit union, and the check is processed and deposited into their account quickly.

Numerous studies indicate that mobile banking customers use more products than do branch-only customers and are less likely to leave a bank for another provider.

Single parents love mobile deposit for the following reasons:

• They can receive funds 48-72 hours faster than with traditional check deposit
• Checks can be processed 24/7
• No time at the branch waiting in line
• Less time spent processing checks
• No money spent on gas

Credit unions that provide an excellent mobile deposit app have a markedly higher customer adoption. Single parents are among the busiest people I know and they appreciate the convenience of making remote deposits, saving trips to branches and ultimately enhancing the relationship they have with your credit union.

Credit Quality Is Crucial

I’ve learned as a single mom I need to be more diligent about building and maintaining a strong credit score in case I need access to credit. I keep an app on my phone that lets me monitor my credit reports and scores. It is essential for me to keep an eye on my credit report and review all the details. Having an app at my fingertips makes this process less stressful than it had been in the past for me.

A lot of credit unions offer credit monitoring, but are you also making it easily accessible any day or time? If your credit union is providing members free access to their FICO® scores and can make it easy through an app or online banking you will definitely win over the hearts and business of many single parents.

Make Mobile Payments Easier

Mobile payment apps are making it a lot easier to give friends or family cash, whether it’s to split a restaurant bill, offer a gift, or settle a bet.

Giving consumers the ability to make fast person-to-person (P2P) payments directly from their online banking sites and mobile banking apps is a huge time saver especially for single parents who may not have the time to be face-to-face with someone they need to pay or get paid by.

It is a life-saver for when you want to go in with a group of friends to purchase flowers for someone’s birthday, pay a friend back for covering a new swim cap since the team only took cash, or you receive a bonus for rocking something awesome at work.

Sending and receiving money digitally is fast, safe and easy, and it makes this single mom’s life a lot easier than writing checks or having to make a stop at the ATM.

Offering solutions to common problems single parents have is a win/win solution for your credit union and for the single parent. Think about how your products or services can address the needs that this group has, and then show how you can support the need of this huge market segment. Meeting this group’s unique needs and relieving elements of their pain points are key to a successful connection with single parents.

This market is growing. If you don’t address their needs, some fintech company or challenger, certainly will.