Tech CU’s Family Banking account had inside advocate
Name: Technology CU
Assets: $2.4 billion
Location: San Jose, Calif.
Category: Family Banking
Nominated by: Technology Credit Union
They say necessity is the mother of invention, and Todd Harris had a necessity.
Harris, the CEO of $2.4 billion Technology Credit Union, San Jose, Calif., wanted a better way to interact financially with his kids. He also was aware of a study by Doughmain that found 81 percent of parents feel it is their responsibility to teach kids about money and saving. However, the same study revealed only 63 percent say their kids have a savings account and a mere 27 percent actually bring their kids along when performing a financial transaction.
With that in mind, Tech CU developed Family Banking, which launched in May 2016. The product is designed to simplify financial transactions between family members by allowing both a parent and child to link their accounts, transfer money, track balances and monitor transactions – all at no charge.
“Given the importance of developing long-term financial skills, Family Banking is a tool for parents to teach their children about money,” the credit union explained.
Because Family Banking allows for instant deposits and reimbursements, the product eliminates the need for parents to have the correct amount of cash on hand each week for allowances or to get reimbursed for items their kids promised to buy themselves. A child can easily pay back a parent while waiting in a checkout line or shopping online.
Designed to be as similar to the real world as possible, the Family Banking product aims to help kids truly experience what it is like to manage their money. Tech CU hopes Family Banking will open a channel for parents to have an honest dialogue with their children about budgeting, saving, financial goals and financial planning.
Family Banking allows members to:
- Give a child his/her own account — providing an early sense of responsibility and ownership.
- Issue a debit card to their child, allowing flexibility and independence, as well as the ability to take advantage of services such as Apple Pay.
- Monitor and track their child’s spending and saving through online or mobile banking.
- Receive alerts if funds in the child’s account are low or transactions exceed a certain limit set by the parent. The child’s account is set up so it cannot be overdrawn.
- Deposit money quickly via account transfers, which automatically connect both the parent’s and child’s account.
Tech CU pointed out the tool has broader applications, such as helping an adult child monitor and manage an elderly parent’s account. It also can enable parents to pay for their college-aged children’s living expenses.
For children ages 13 and older, parents can open an account online or in a branch. Accounts for children ages 10-12 must be opened at a Tech CU branch. Family Banking is not available to children under 10 years of age.
In the first six months, Tech CU members opened more than 275 accounts, which was 37.5% above Tech CU’s original marketing goal. Since then, signups have grown at a “steady pace,” nearly doubling since the end of 2016.
“We are so happy to be recognized for our Family Banking product,” Harris told Credit Union Journal. “As a parent, I know how tough it can be to have cash on hand for allowance, remember to get reimbursed or have a financial conversation with my sons. In fact, I purposely built the functions surrounding Family Banking with the specific intent of using it with my boys. If they want expensive shoes, they have to use their own money. I also wanted the product to be as similar to the real world as possible, so they could truly experience what it is like to manage their money. Every family I know of that has used Family Banking loves it.”
Those efforts earned Tech CU a 2017 Best Practices Award from Credit Union Journal.