Helping to drive financial inclusion – Credit Unions can now give account access via TV & smartphone apps.

It's a hard fact that it costs more to be poor. Budgeting on a day-to-day basis makes it difficult to achieve cost savings through bulk purchasing or discounts from pre-paying. Bills are often paid on a daily or weekly basis, which is usually more expensive than longer term payments. Lack of access to mainstream financial services exposes people to higher, sometimes exorbitant interest rates, or means that they can?t secure savings for example through direct debiting or electronic services. There is strong evidence that the effect of low income and poverty can be multiplied when combined with other factors such as worklessness, disability or ill health. Digital exclusion is one such multiplying factor and time and time again it is found that financial exclusion overlaps social exclusion and digital exclusion; poverty and low income are inextricably linked to lack of Internet use.

Digital exclusion is greatest for the poorest socio-demographic classifications (specifically C2, D and E) and it is those people with the highest social and economic needs that have no access at all.

Credit Unions are key players in the financial exclusion arena offering low rate loans and affordable access to financial services. Looking Local has recently finished a programme of work focused on attempting to level the playing field in terms of access to personal accounts and credit union information, by allowing people to safely use the TV to manage their credit union accounts and access services.

Funded by the CLG's Digital Inclusion Unit, Looking Local piloted credit union services on TV (and the other channels we support) with Hull & East Yorkshire Credit Union (HEYCU) during 2010. This work allowed us to assess the benefits for both the credit union and savers.

Hull & East Yorkshire Credit Union says:

"Lots of our members do not have computers at home or ready access to the internet. We needed to find another way of contacting these people and allowing them, once they become members, to access their accounts. TV for most people is a very everyday thing, they don't need to learn any new skills, they can just pick up a remote and use it and their information is there."

From the outset, a key objective was to deliver a nationally scalable, fit for purpose financial inclusion service, Looking Local worked with Progress System's credit union software to deliver HEYCU customers free 24/7 access. Having integrated with their software, we are now in a position to deliver these same services to all credit unions using the Progress technology; everything from introductory information and leaflets to personal account management.

The aims of this project were to:

• Explore how digital technology, particularly the Looking Local service, can help to tackle financial exclusion
• Widen access to financial services
• Improve financial literacy
• Reduce doorstep loans

The pilot giving HEYCU savers TV access ran for six months (June-Dec 2010) and the resulting business case identifies a range of people and organisations that can benefit by credit unions giving wider access to their services; frontline workers, a range of excluded groups including the unemployed, rurally deprived and low income families, deprived communities, the regional economy and of course the individual themselves.

HEYCU's Service on Looking Local via TV & Smartphone

Headlines from the pilot include:

1. Providing a multi-channel approach can stimulate users to self serve, therefore saving time and money for both the customer and the credit union;
2. Despite having access to the internet, people said they would use digital TV and mobile phones as additional channels to access financial information in the future;
3. The overall opinion was that a Digital Credit Union service would be beneficial for the Digitally Excluded;
4. The service is fit for purpose and easy to use;
5. Integration with other public services (e.g.: council) makes for a more useful, citizen focused service.

The pilot programme was assessed with a business case model which was designed by CLG and approved by HM Treasury. The primary objective was to grow the business whilst reducing costs. Giving access to credit union accounts, information and services on alternative channels (TV, mobile and smartphones) was measured against other options including 'Do Nothing' and 'Using traditional marketing methods'. It was found that giving access via Looking Local allowed a credit union to: 'take advantage of widely available digital TV channels at no extra cost to the user and in a cost effective way to the credit union'.

Problems with maintaining the status quo meant that digital channels were not exploited, opportunities were missed and the credit union was not able to push members towards self service options that were available to them. Issues with increasing marketing methods included increased costs without definite returns and the inability to move people to cheaper self service channels.

Project Analysis based on a range of factors and indicators showed a definite opportunity for all credit unions by making services available on additional channels.

The full report can be requested from here.

As part of the project a video was created speaking with HEYCU management and a user as to why they needed to extend access, how it helped their business and what the user thought of the TV access.