MatriMoney®: Project Summary
The Market Need
Timing is the most important element in reaching consumers with financial education and an evaluation of financial products. The best time to reach these consumers is during major life decision and event moments, such as buying a home, having a baby or getting married. Consumers are marrying at older ages than their parents – 25 to 27 is now the average age for first-time brides and grooms – newlyweds are more prime for the timing of financial education than ever. The average age of the U.S. population in general is increasing as well, making consumers in their prime borrowing years an ever-more valuable commodity. And, older brides and grooms are closer, if not into, these prime borrowing years.
Today the average cost of a wedding is over $20,000, and lately newlyweds prefer the white beaches of Hawaii for a honeymoon. Since the average bride or groom has lived on his or her own and accumulated the appliances their household needs, today’s newlyweds want cash, not toasters. They prefer cash gifts to help defray wedding costs, pay for that honeymoon, collect for a down payment on a new home, or to pay off student loans.
The good news is cash seems to be what most wedding guests want to give. In an i3 survey of 917 consumers nationwide, 78 percent said they prefer to give cash as a wedding gift. The struggle is that cultural stigmas still call cash giving “tacky,” so most guests opt for items from gift registries.
The Solution
The MatriMoney account solves the cash-giving dilemma, and develops a product that can help credit unions reach and build relationships with younger consumers by capitalizing on credit unions’ key inventory (cash). MatriMoney also provides the credit union entrance ticket into the $19 billion per year bridal gift registry market. Credit unions are not the only businesses entering the marketplace with a cash registry; however, most others – including such cash registries as HoneyLuna and The Big Day – focus on saving for one particular thing, such as the honeymoon or wedding expenses. The MatriMoney account is different. It allows funds to be collected for any reason(s) the couple decides.
Implementation: The MatriMoney registry is being piloted at North Island Credit Union in San Diego, California. Couples learn about the cash registry through creative marketing to the general public and to members. Couples must be or become credit union members to register for a MatriMoney wedding savings account. Once the account is opened, couples send announcements – using credit union-supplied announcement cards – to their guests, notifying them that they are registered at the credit union and would appreciate deposits into the account as gifts.
Givers can deposit gifts at multiple points – in person or online - and receive an elegant gift fulfillment card to present the couple at the wedding. Unlike similar cash registry programs, the credit union charges no fee. In fact, it offers a $100 matching gift to the couple, paid into the account once $100 in gifts are collected. (If the wedding is cancelled, the couple forfeits the credit union gift.) Couples open a MatriMoney account with a $200 required deposit at least 90 days prior to the wedding date. When the account is opened, the couple receives the Budget Blueprint from the Credit Union National Association as well as other financial education information. The account, which at North Island CU produces a 1.25% annual percentage yield, is then locked (no withdrawals allowed) until after the wedding date.
Once the wedding date has passed, the couple receives an account statement with a list of contributors to facilitate thank you notes. Critical marketing and financial education follow-ups from the credit union ensure that the young consumers who started their lives together with the credit union will continue with the credit union.
North Island CU averaged two wedding registry accounts per week during the first half of the pilot phase. It expected to open at least 100 MatriMoney accounts during the entire pilot program. Forecasts predict the average MatriMoney account will have an average balance of $3,000 and cost approximately $150 each to market and open, including the $100 gift incentive. Additionally, the credit union reports new checking, loan, and savings account cross sells resulting from MatriMoney accounts.
Credit unions could also develop this account into a nationally recognized, branded program in which credit unions can opt to participate. A technology partner with the ability to interface with key credit union host system providers could help launch a national online fulfillment site for the MatriMoney registry. Combined with national marketing, this has the potential to drive significant dollars from the retail gift registry sector into the cash registry savings accounts of credit unions.
The Benefits
MatriMoney identifies an important time in the life of a member or potential member and gives a credit union an “in” with financial education and relationship building materials. The MatriMoney account welcomes new members and enhances existing younger member relationships by celebrating a key life event. It also offers a credit union an opportunity to build core deposits through new regular share accounts, gather key CRM data for future needs, and provide young consumers with important financial information and product cross selling.
There is a great deal of value in developing a long-term relationship that starts with a couple’s wedding registry. These households are just entering prime borrowing years and will need mortgages, automobile financing, credit cards, and checking accounts in the near future. A young household can be profitable for a credit union to the tune of $800 per year, depending upon the number and type of services they use.
Meanwhile, MatriMoney provides newlyweds with a more elegant way to ask guests for the gift they really want and need — cash. When the wedding bells dim, the couple has an extra $100 gift incentive to encourage opening a joint account at the credit union. And, they receive the financial information they need to get their new life together started on solid financial footing, at the credit union that gave them that start.
The First Step
To propose the start of a lasting financial relationship to younger members, discover the details of the MatriMoney program – including a business plan and marketing ideas – in the i3 section of this Web site or by calling 608.231.8550. Receive additional updates on this and other i3 innovations by becoming a Filene Research Institute member.
