Jumiya: There's a Direct Link Between Health and Finances

Project advises CUs to look at members' financial behavior from a more holistic perspective.

April 8, 2014

A Florida-based credit union is putting into practice some insights from a recent discovery: Consumers' health and finances are intimately linked.

“We have a lot of retirees in Florida, but we also have a very young, fit population as well,” says Joe Brancucci, CEO $1.6 billion asset GTE Financial Credit Union in Tampa, Fla. “In California, you have similar positives. People want to be fit and healthy, especially baby boomers. There’s a whole culture around it.”

In January, GTE Financial implemented a pilot project that was originally conceived by Singularity University researchers and tested with credit unions in Texas, Washington, Iowa, and Canada.

The team was commissioned by CUNA’s National Credit Union Roundtable in 2012 to help develop a forward-looking roadmap for increasing credit unions’ value to society. Filene Research Institute in Madison, Wis., managed the project, named “Jumiya,” which means “union” in Swahili.

Funded by 46 credit unions and five state credit union leagues, the study’s results show that when individuals are healthier, they’re less likely to slide into delinquency, default, or bankruptcy.

What Jumiya Revealed to CUs

  • Healthy behavior leads to good financial outcomes.
  • Nonhealthy behavior leads to poor financial outcomes.
  • 62% of consumer bankruptcies are linked to medical debts.
  • CUs have “massive amounts of rich, untapped data lodes,” which holds promise for creating new self-service tools and personalized financial recommendations.
  • There’s an 80% level of certainty regarding a consumer’s financial health that the Jumiya team could predict based on medical health data.

“This could be attractive for a number of credit unions, but it would probably have to fit within a credit union’s overall alignment and strategy,” says Nader Moghaddam. He’s CEO of $860 million asset Financial Partners Credit Union in Downey, Calif., and chairman of National Credit Union Roundtable, a group of the largest U.S. credit unions that spearheaded the project’s inception. “At our credit union, we’re certainly exploring possible implementation.”

He says a national announcement with specifics on how credit unions can apply the Jumiya concept will come sometime in 2014.

Keeping financial difficulties at bay is at the heart of GTE Financial’s “Get Fit” program. Members can use a smartphone app to track how much they walk every day, merging the results into their account online.

They can redeem “steps” for rewards, such as special coupons to local businesses or cash.

“In January and February, our members logged 78.7 million steps, or about 39,350 miles,” Brancucci says. “We’re also trying to attract a younger set of members with this. So far, they think it’s the coolest thing since sliced bread.”

Although “Get Fit” was created to add value to current members, the program is attracting new members almost daily.

As of March, GTE Financial was the nation’s only credit union that officially rolled out a customized version for its members with the help of Walkmore, a team of Silicon Valley technologists led by Singularity University student and entrepreneur Eli Mohamad.

An original member of the Jumiya research team, he’s now looking to execute the concept for credit unions and community banks.

Mohamad says the initial study proved more than a link between a member’s physical and financial health.

“It was also proof that a significant impact on a credit union’s bottom line can be achieved with basic data analytics using transactional data—something large banks have been doing for 40 years,” he says, but not most credit unions.

Mohamed says credit unions must become more “data driven” to serve members better.

“We’re correlating members’ physical activity and transactional data to produce highly accurate predictions of behavior,” he says. “Credit unions will see retention of existing members and creation of new leads, particularly Gen Y.”

This correlation could be the tip of the iceberg. The Walkmore team is also investigating how sleep, diet, mood, social behavior, and stress levels are related to financial behavior.

“It’s time for credit unions to stop thinking of their members’ financial behavior as an isolated aspect, and start looking at them from a more holistic perspective,” Mohamad says. “With new digital entrants, credit unions will have to fight to retain and attract members—openly and very hard.”

Even so, there’s a “Wild West” undercurrent to data analysis, especially with consumers getting antsy about sharing their information, says George Hofheimer, chief research and innovation officer for the Filene Research Institute.

He says some credit unions who participated in a recent data analytics project with Filene were apprehensive. They weren’t sure how much member information they could share, which shows the cautionary stance the industry is taking.

“Credit unions don’t generally have the expertise to do data analytics,” Hofheimer says. “Some struggle with the idea of it. If you ask credit union executives, they’ll say they have a lot of info that’s valuable, but quite honestly they don’t know how to act on it.”

The Jumiya concept “may turn into something huge, or it might not,” he says. “But it provides credit unions an opportunity to learn and complete testing at a level that many organizations aren’t equipped to carry out.”

Brancucci said programs similar to “Get Fit” have the potential to change how credit unions engage members in the future. GTE Financial’s “Get Fit” pilot program ends in September.

“In the long run, our goal is to continue to promote and facilitate the impact of financial and physical fitness on individuals,” Brancucci says. “This makes us a better credit union for our members, and supports the betterment of our community.”

MATT WRYE is associate editor of Credit Union Digest. Reprinted with permission by the California and Nevada Credit Union Leagues.