The largest fintech in Latin America is only six years old but already it has more than 12 million customers—70% of which are under 36 years of age.
If that doesn’t scare you, it should.
Financial cooperatives need to take a serious look at the crisis of relevance they face with the next generation of members.
When David Velez looked at the banking system in his home country of Brazil in the beginning of this decade, he found it to be very bureaucratic and inefficient. Velez saw long lines at branches, confusion instead of solutions, hidden costs and high service fees. He also saw an opportunity to give control back to people when it came to their financial lives.
In 2013, Velez created NuBank and a simple product—a no-fee credit card that people could manage through a digital app.
NuBank began a financial revolution—encouraging competition and increasing transparency. New products are now available—digital savings accounts, personal loans and even digital accounts for SMEs. And now NuBank is expanding from Brazil to Argentina, where 51 % of the adult population lacks a transaction account, and to Mexico with an unbanked population of 42 million.
Survey results from the Global Fintech Adoption Index 2019 indicate that 68% of consumers would consider a nonfinancial services company for financial services. FinTech’s like NuBank are multiplying every day in the financial services’ space—and they’re connecting with young people.
It’s time for credit unions to confront a simple reality: they face a crisis of relevance with young members who feel no connection to them.
We all recognize the importance of technology for remaining relevant, but we need to do much more if credit unions are going to change their relationship with young people. But the good news is—there are inspirational examples from credit unions in Brazil that are doing just that!
The Sicredi Youth Committee Model
In May 2019, World Council’s Global Classroom organized the first Young Professional Exchange in Curitiba, Brazil, bringing together WOCCU’s Young Credit Union Professional Program (WYCUP) and Sicredi—a credit union system that serves more than four million members at 116 affiliated credit unions throughout Brazil. During the Exchange, Sicredi also hosted its 2nd Annual Youth Summit—bringing young credit union professionals from throughout the western hemisphere together with their peers and the young members who make up Sicredi’s Youth Committees.
The Youth Committees are formed by individual credit unions, bringing together a group of young members (generally 16-30 years old) to empower them by putting them in charge of creating and implementing community development projects. The initiative supports young members’ professional development at a key time in their lives. It builds awareness of financial cooperatives among this important demographic and strengthens the relationship between the two by:
- stimulating a culture of volunteering and encouraging social responsibility.
- providing professional development resources and support.
- encouraging entrepreneurship and cooperativism as tools for social and economic development.
The exchange program highlighted several community development projects there were launched through Sicredi’s Youth Committees—turning young credit union members into ambassadors. These dedicated young people have inspired us to take on the challenge of replicating the Sicredi model globally and networking youth committees through the World Council.
Back to Brazil, then on to the UK
In January 2020, World Council’s Global Classroom will return to Brazil to bring together a delegation of advocates for YP initiatives and do a deep-dive into the Sicredi Youth Committee model and structure. The international delegation will visit Youth Committees and see their development projects in several rural communities. Our team of YP advocates will then be tasked with taking the experience and creating a toolkit to help credit union systems around the world replicate the model.
The toolkit will be launched in March during our Global Youth Summit 2020 in the United Kingdom (London and Manchester). Young credit union professionals gathered from around the world will utilize that toolkit to replicate youth committees at their own credit unions.
This entirely new professional development resource has the potential to redefine the relationship between young people and their credit union. It’s already happening in Brazil. It could be soon at your credit union too!