The history of banking stretches back to antiquity; records show that temples in Greece, Rome, Egypt, and Ancient Babylon not only safeguarded currency, they also were responsible for loaning it out. Much of the same attitudes about banks that we hold today were seen in ancient times. Banks were alternately revered and feared (depending on which side of the loan you were on) as citizens were introduced to the concepts of interest, loan sharks, GDP, creditors, usury, underwriting, and everything else that makes the financial world go around.
One thing that will never change, however, is the fact that banks are just as essential today as they were centuries ago. However, today, some banks are shifting the focus from pleasing the profit line to uplifting the people that use their services.
Cashco Financial, in the past, was known as the institution that would provide short-term loans to those that would not otherwise qualify for assistance. Through programs and education, Cashco has helped to lift many of the underbanked to a place of greater financial security. Now the institution is working towards the extinction of financial exclusion. Vice President of Marketing and Communications, Courtney Nicole Johnston-Naumann, explains.
“The premise of what we are trying to accomplish with our BHAG (Big Hairy Audacious Goal) has evolved from previous years. The evolution of the BHAG is to ‘end financial exclusion.’ What that means is, we work with approximately 5 million underbanked Canadians, they would identify as being on the lower half of the credit ladder, and we address the challenges they always have with accessibility to products and services. Because we had a previous relationship with clients from a lending perspective, we’ve been able to connect with them both online and with a physical presence nationally.
“The evolution of our BHAG created the absolute need to change our organization from a mono-product offering to a multi-product portfolio. That meant introducing new products and services that already exist but are not currently right sized for the market we serve. We were able to right size those products and connect with the community. We know their paychecks run out before the month – so what do they need in order to get through?”
She continues, “Our process included soliciting and analyzing feedback. We learned that our clients want to be alerted to damaging financial things like identity theft or fraudulent charges on their credit cards. They also needed to understand their credit more.”
Cashco considers itself to be a disruptor – focused on bringing truth and understanding to a very misunderstood space. Understanding will come from connecting with the demographic they serve in meaningful ways, how, when, and where the client needs to be served. Cashco sees its role in the sector as an adjustor, bringing a version of traditional services to those that could not previously access them.
“Some of what we do originated in space of short-term lending, but our conversations are always about ‘how do we support the working poor,’ Johnston-Naumann points out. “We look to support the ones that are trying to make ends meet. Most banks don’t have a plan or a system in place for that – or for them. From that perspective we consider ourselves to be on the leading edge because it challenges a lot of the norms of banking today. We don’t believe banking is suitably built for everyone. It’s excluding people from important financial services. For us, financial products are a right, not a privilege.”
Cashco knows that the privilege of banking comes with responsibility on all sides.
“A big part of the shift that has happened for us in the last 12 months is working towards our financial wellness framework,” Johnston-Naumann notes. “We are looking at the whole person, not just parts. At one time clients faced challenges and we provided short term relief (loans); now we look at how they can thrive in the long-term with hope for tomorrow, not just endure short-term survival.
“Building on our financial wellness framework, we’ve recently launched our Cashco Scholars program, which introduces financial literacy concepts to K – 9 students and enables and promotes financial dialogue in the home. We knew if we could get into the school programs around our branches (which are located demographically for ease of access for our clients) we could create those connections at home.”
To date, Cashco has created partnerships with three schools and is actively seeking to bring their program to many more.
Cashco is not the only bank innovating in financial services. The ATB Entrepreneur Centre supports startups, craft breweries, artists, and other small business ventures that can sometimes struggle to find financial footing. Four Directions Financial, empowered by ATB, uses biometric technology, a simplified process, and low fees to support the underserved population in Edmonton that typically does not have the means to access traditional banking.
Servus Credit Union is another banking institution taking a proactive and modern stance for its members.
“Our noble purpose is to help shape member financial fitness. We want our members to feel good about their money, so everything we do aligns to that,” Chief Marketing and Digital Officer Michelle Belland notes. “As a credit union, our members are owners and we underline our commitment to them by sharing as much of our profits with them as possible. It’s a key differentiator for us in the financial institution sector, and one that can have a big impact on our members.”
Again, however, the focus is not on money, but on the responsible use of it.
“It’s not just about giving our members money,” Belland stresses. “It’s about a holistic financial relationship built on financial wellness — a member that does more business with us earns more from our profit share program and gives us a fuller financial picture to work together with them. This is where our differentiation comes to life, in the rich conversations about Albertans’ financial goals and how to reach them.”
To help reach this goal, Servus introduced a contest.
“We launched the Servus Big Share contest at the beginning of 2019,” Belland informs. “The contest gave $1 million of our profits to a single winner. To be eligible, members earned entries through what they’d earned in our annual profit share payout and for every additional $500 they were able to save between January 1 and April 30. This was hugely impactful for Servus and our members. Essentially, this contest motivated Albertans to save more than $363 million in just four months, compared to $176 million in 2018. Since this was so successful, we’ll be running the contest again in the new year. We are looking forward to having even more impact on the financial fitness of our members and Albertans overall.”
Servus also has a very progressive outlook on what was once billed as a threat to traditional banking: crowd sourcing and industry ‘disruptors.’
“We can’t think of disruptors as threats,” says Belland. “Our sector and the environment we work within is evolving at a rapid rate. By ignoring trends and disruptions we run the risk of not being a workable option for our members and we’re asking ourselves some hard questions so that we can set ourselves up for an exciting future. Not only is keeping up critically important, but there’s also a great opportunity for us to be innovators in this space.”
She concludes, “Our purpose of shaping member financial fitness puts us in a unique position to have a significant impact on Albertans, and technology gives us a lot of options to work with. To add to that, digitization and other trends that enable disruption can also give us opportunities to deliver on our business plan, so it’s also important for us to be looking ahead and thinking of disruption as an opportunity instead of a threat. Disruptors and alternative banking options will always be present in one form or another, which is why we have focused on our own disruptive opportunities rooted in financial fitness and helping Albertans feel good about their money.”
Banking is as old as humanity, but the way banking is accessed continues to change. With a big push for financial literacy, inclusion, technology and small business support, today’s modern institutions are poised to take banking to an even better future.
