Oregon Employees FCU Piloting Prize-Linked Savings Alternative

Oregon Employees Federal Credit Union is one of fewer than 20 credit unions from 15 different states piloting a savings incentive program called SaveUp, a legal alternative to prize-linked savings programs launched by the Filene Research Institute.

“This program’s goal is to encourage Americans to save money, pay down debts and make positive changes to their financial behavior,” said Denise Gabel, chief finance and strategy officer for Filene. “SaveUp can integrate into your existing rewards programs or comprise an entirely new program. The product is targeted toward the young-adult market, a segment credit unions are struggling to engage with.”

SaveUp offers prizes and financial literacy incentives, and every chance to win is free. The cost of the prizes is being underwritten by sponsors and financial partners. The Filene Research Institute reports the pilot program will also be free to selected credit unions for a six-month period. The pilot group will be part of a national research study to determine whether the product has a positive result on consumers’ financial behavior and whether it drives business for credit unions.

As part of the pilot, Oregon Employees FCU will distribute its own customized version of SaveUp directly to its members. Filene will then work with SaveUp and the credit unions to track usage, monitor feedback, and compile research results.

Otto Radke, Director of Information Technology for Oregon Employees FCU, said that he learned about the program through a Filene webinar and was able to get the credit union involved because SaveUp’s technological requirements matched up with the credit union’s online banking capabilities.

“I thought it was just a really good program,” Radke said. “Something that would really encourage members to either save some money or pay down some of their existing debt while earning essentially some points they could spend on prizes. So it kind of really fit the credit union model of helping members.”

“Our research shows that when financial institutions find ways to make saving fun, consumers save,” said Filene Research Institute CEO Mark Meyer. “As Americans start rebuilding their financial lives from the Great Recession, we are excited to help credit unions explore new ways of facilitating and encouraging positive financial behaviors.”

Original plans were to include 15 credit unions, but SaveUp was able to expand that number to accommodate high demand.

Radke said that a board member and several of the credit union’s employees have already enrolled in SaveUp and have raved about it. He also said that individual credit unions are able to personalize the program and offer their own rewards eligible only to their own members.

SaveUp rewards users for a number of positive financial decisions, including each time they contribute to a savings or retirement account, pay down a credit card or other loans, or take advantage of SaveUp’s financial education content. Members earn credits that can be redeemed for the opportunity to win prizes of varying significance, everything from $50 cash to brand-specific rewards to vacation packages.

Radke explained the steps needed to get involved, beginning with creating a SaveUp account.

“One it’s created and I’ve validated that it’s my account, I then go and attach my credit union account to it,” Radke said. “Then I give it my online banking credentials, and when you set up a new online account, they give you 200 tokens you can use.”

Tokens are essentially like online game pieces, and users can use them to play up to three times per day, which has the subtle positive effect of encouraging users to check their accounts on a regular basis, ensuring more consistent awareness of account balances and debts.

The larger appeal of the program is the lottery-style prize, a monthly chance to win a $2 million jackpot. Radke said that because the program is still in its infancy, no user had yet matched up all the numbers to win the jackpot.

“I think it’s just a matter of once they have more users,” he said. “They’ll probably hit that jackpot at some point.”

Radke explained that in addition to simply encouraging members to save and facilitating financial education, the program also allows his credit union to improve its own initiatives, giving specific information on the exact prizes that are eliciting results.

“Are they more interested in saving, or are they more interested in paying down their debt? We might be able to tailor some of our products and services to fit their needs.”

Many credit union members whose credit union is not part of the pilot program are still eligible to register and take part in SaveUp. Visit www.SaveUp.com for more information.

 

Questions or Concerns? Contact Matt Halvorson, Anthem Editor: mhalvorson@nwcua.org.

Posted in Industry Insight.