Six teams from Wisconsin universities and historically black colleges and universities came together Thursday at the FOCUSS Idea Competition at CUNA Mutual Group headquarters in Madison to offer their ideas for ways credit unions could diversify their membership and offer more services to communities of color, with an idea for an alternative credit program developed by Romaine Knight of Prairie View A&M University taking the top prize of $5,000 and a team of sophomore finance majors from UW-Whitewater taking second.
Knight, a junior finance major, developed a software platform to “to capture individuals who don’t have access to traditional lending. The platform that we have, the credit union uses alternative data, beyond the traditional FICO score, to be more inclusive in lending while not increasing prejudice.”
That alternative data could include everything from rent and Netflix payment history to demographic data and mobile transaction history.
“We have a mock up that we’re using right now, but research shows that using alternative data enables even FICO themselves to capture 50% more individuals just using rent,” Knight said. “And so having the understanding that there are relevant data out there, that captures these individuals, is an immense opportunity for credit unions to help and have social impact while still being sustainable and generating profit.”
The team of Dyquan Gipson, Joshua Williams and Maricela Castillo, all sophomores at UW-Whitewater, took second place with a whole suite of product ideas.
“We basically created a credit union geared toward the multi-racial and multi-generational consumer,” Williams said. “We created a few products to ensure that our members are on a path towards financial security. It includes a more flexible payment plan, training credit card for first time credit users, our recovery credit program for those members that who have that rough financial past, and a loyalty program for appreciation for our members.”
These products are important to diversify credit union membership, the team said.
“They’re important in order to gain access to these demographics specifically because these are things that are lacking in areas where they don’t really fit the mold of a typical US citizen or US consumer when it comes to credit unions and banks,” Castillo said. “They need something that’s gonna be a little bit different, a little bit more tailored to an individual, in order to feel comfortable and have trust within a credit union.”
The top two teams also got a surprise when CUNA Mutual announced that they’d get to attend the African American Credit Union Coalition conference in Atlanta this summer, where they’ll get the chance to network with many credit union CEOs and executives from around the country.
“I think it means, I get another chance to present and work on myself,” Gipson said. “My skillset, my public speaking, my networking ability, because this is a great opportunity, we came here only to present but now we got a chance to go to Atlanta and in front of a bigger crowd. In front of decision makers, like she said, so that’s really just building my career, getting my name out there, and help me move around.”
“Creating our product, we weren’t thinking were gonna show this to real people in like the global world,” Williams said. “But getting this opportunity, I’m glad we put in the time to create what we did and how impactful it may possibly be.”
CUNA Mutual sales and marketing representative Alicia Chaney said the event is important for the students involved as well as the credit union community, helping broaden the thinking about reaching new members in communities of color.
“I think, as I reflect back on each presentation, the amount of innovation, the amount of research, the amount of preparation is amazing,” she said. “And this opportunity prepares each of these students to leave here and to go out into the world and to be successful. Not having more diverse people in the credit union, in our workplaces, in our colleges, I think is a problem. But I also think that there is a solution to that. And today we heard a lot of things, a lot of solutions to problems that we see everyday. I think it was amazing the ideas we heard today.”
This is the third year CUNA Mutual has hosted the FOCUSS Competition though it has run for several years at other locations. In addition to Prairie View A&M and UW-Whitewater, teams represented HBCUs Alabama State and North Carolina A&T State as well as UW-Madison and UW-Milwaukee.
