Transcription:
Find Your Force of Good: Building a Brand Via Social Responsibility

Bill Klaproth (Announcer): When you've been searching for the right insight, advice and information on financial marketing, you know where to go, the Speakeasy. The exclusive source for financial marketing insights with the shot of human, starring Kelly Hellickson and Hillary Reed from EmpowerFi. Strategy infused, data-driven marketing solutions for financial institutions nationwide. And on this episode, Hillary Reed welcomes Rui Domingos, President and CEO of MIT Federal Credit Union, as they'll be talking about finding your force of good, building a brand via social responsibility. Now here's your host, Hillary Reed.

Hilary Reed (Host): Hi, Rui. Thank you for being with us.

Rui Domingos (Guest): Hi, Hillary. Thanks for having me on your podcast.

Host: Yeah, it's good to talk to you again, we talked a couple of weeks ago. Rui is the CEO of MIT Federal Credit Union. And we had a conversation a couple of weeks ago and it really got me thinking, and I was like, this would be a great podcast topic for our listeners, talking about social responsibility, creating an impact and really going beyond the bottom line.

And I just thought it was such a neat subject that I wanted to expand upon it. And Rui is the perfect person to talk to about it. Rui, can you give a little bit of your background coming to MIT, what, right before the pandemic in 2020?

Rui: Yeah, I've been in the credit industry for about 30 years. My prior credit union was Naveo Credit Union, which was a Community Credit Union based out of Somerville in Cambridge, was about $175 million. We did a lot of community outreach. And that was really well connected into the what we call a niche, in the Cambridge and Somerville areas of just outside of Boston.

Host: Okay. Wonderful. So it was technically a SEG based credit union you came from?

Rui: Yeah, predominantly. The credit union was a Portuguese community-based, initially. And then, over the years we changed the credit union to be more inclusive because our neighborhoods have changed and there was less and less Portuguese and less and less need for a Portuguese speaking, tellers and MSRs and that sort of thing.

So we transformed the credit union into more of a community credit union, but still with a niche into the Portuguese community. And obviously all the newer people that moved into our neighborhoods, we opened the doors to them as well in a very unique way because of our immigrant background.

Host: Gotcha. So yeah, communities have always been really important to you. I know that, and that sort of led you to this next role here at MIT, which is way different than the Portuguese community, I'm sure. But still has that niche. So, what drew you to MIT and how are you doing things a little differently now?

Rui: Well, MIT was obviously a global name, and obviously having a credit union within the MIT community is something very unique. So, I was kind of drawn by that and the opportunity to serve a community people that is somewhat different than the general open community credit union. But yet it was still serving people. At the end of the day, these are the owners of the credit union, regardless if they're part of a SEG or they're part of a community, in general. The credit union is, has a lot of potential, I think by realigning a lot of the things that we already doing well and to putting a different spin, if you will, and how we engage with the MIT community. It was something that really caught my attention and then given my background of being able to transform a, not only just a credit union, but a brand and a field of membership, that this would be a good fit to me. And obviously it's a much larger credit, even though it has, obviously the resources to be able to do some of the things that, I think from a strategic standpoint are, great for the credit union.

Host: Yeah. And so speaking of that, can you give our listeners a little bit of background on the size of MIT? The number of members and the asset size?

Rui: Sure. That's the credit union is $760 million in assets. It has about 36,000 members. We have three branches, one within the campus, one outside of campus of MIT, another one actually within the lab of MIT completely outside of the other campu. And we also have the branch set up as VT with a lot of VTMs.

So the virtual teller machines is what we use to interact with our members. We are cashless branches and we interact with our members in a very different way. We also have what I like to refer to as our virtual branch. So we do a lot of stuff online and engage the member using a lot of virtual tools.

Host: Awesome. Thank you for that. And so being a single sponsor credit union, I think a lot of other credit unions are like, well, what can I really do in the community? I mean, we're a single sponsor unless it's something involved with the sponsor, but I think that credit unions need to think outside the box a little bit with this.

And that's why I'm excited to talk to you about it because it goes beyond just MIT employees. It goes beyond the, what's the bottom line, what's our profit. It's about creating relationships, whether it's, you know, within this SEG sponsor group or without and making a bigger impact all around.

So, talk to us a little bit about how you want to see this credit union go beyond the bottom line, how you go beyond the bottom line and expanding the credit union's role as a force for good in your community.

Rui: I think in general, the credit union industry has a great opportunity given the times that we live in, to kind of, I wouldn't wanna use the word exploit who we are because we are by nature of our structure, by nature of our industry, already socially responsible industry. So, I say that because I think there's a greater opportunity for us to highlight who we are and take quote, unquote, advantage of this opportunity, the times that we live in, where social responsibility is more important than the a nice checking account with a great rate or a great mortgage rate.

And talking to the different people, the different ones within our community, whether it's students, whether it's the faculty, whether it's employees at MIT, it's clear that their associations to the credit union has to be in a different way. When you talk to a student, when you talk to somebody here, and if you talk to them about the credit union products and services, they have probably very little to no interest in talking to you about it.

But if you engage with them in terms of what is going on in the world from a social responsibility standpoint, so they look at your brand and they see, what are you doing as a credit union and all that aligns with their own values, and what's important to them; then the conversation is different.

And I think the level of engagement we get from people is very different. From my perspective, I think for MITFCU, we have to realign our branding. We have to realign how we are portraying ourselves and how we are promoting ourselves to our members because that big ad or that big, the email that goes out with the 2.99% rate on a car loan is not going to be sufficient to attract somebody to bank with us. The other aspect of this is having conversations with even when my own son who is 23 years old he, how he relates to a financial institution is very different than I did in the past and my parents did in the past.

So getting that understanding, is it going to force us to change the way we promote the credit union to our members and obviously how we are perceived by them.

Host: Yeah, social responsibility can, I believe it can really be a great differentiator for credit unions. I mean, not only from banks, but from the Fintech companies and just from the companies, all the companies around, being a force for good and believing in something and showing your members what you believe in and backing that, can be a really great brand differentiator.

Rui: I think in general, I think for most of us the credit union brand does not truly reflect who we are, and you know, much less than nature of our structure. And the fact that we, I believe we are a socially responsible organization by the nature of our structure and what we do. And so if we take an advantage of that and put our efforts into redoing our brand, reframing who we are and then presenting ourselves that way to the general public, in this case, the MIT community, I think, would be a huge improvement into how we connect with them and how people relate to us because, as you know, banking has become a commodity and it hard to distinguish ourselves.

You've mentioned Fintechs. Fintechs quite honestly, have done a better job than we have as credit unions to engage with the younger generations, the gen Zs, the millennials, for that matter. For me, it's a very important aspect of our strategic initiatives going forward, that we need to align ourselves with the Fintechs.

We certainly don't have the resource to create our own products or any Fintech products, but we need to align ourselves with organizations that are already engaged with our members fintechs are engaging with our members. That will help us grow our business and grow the credit union and therefore give back to the community that we're a part of.

Host: Yeah, absolutely. And I know you guys have a big focus on the various generations, gen X, Y, and Z. You know, we work alongside MIT Federal Credit Union, with data quite a bit. And I think one of the ways, if you're saying to yourself, how do I create social responsibility? What do we put ourselves behind?

I mean, take a look at the data first and foremost. You can ask your members for one, what social responsibility things mean to them? What, the most important things that they'd like to focus on are in their personal lives, but taking a look at the data will help too in determining, you know, what percentage of gen X, Y, and Z do you have?

What percentage of baby boomers do you have in your membership? And, going beyond that and like we're doing, using artificial intelligence to look at their behaviors. And, are they pet lovers? Are they Amazon centric shoppers? I mean, what really matters to them? So take a look at the data if you have nowhere else to turn and start there. Start looking at the data of your members. So, Rui, what do you think this means to credit unions in general? You talked about what it means to MIT. But how can community credit unions utilize social responsibility as a differentiator or create a bigger impact as well?

Rui: I think credit needs need to be able to communicate better on their mission and purpose, and then utilizing every channel available to them to do so. I think we don't have to reinvent ourselves. We are who we are as an industry. And I think we do a phenomenal job and it's been proven for the last a hundred years. Right? And I think there has never been a great opportunity to do that now. Just to kind of change your shift, your focus from a marketing perspective, outreach in the community, establishing partnerships with relevant organizations within the community that align with the values of the credit union and allow them to be your advocate.

Right? A lot of these partnerships that we form, we just give them a donation of a thousand dollars or $10,000, $20,000. We'll take a nice picture with a check. It doesn't go beyond that. So what I would propose, I think as being a way to enhance that is to have some really genuine partnerships that those organizations would become advocates by helping you promote your brand, by aligning your values of that organization with the values of that credit union. I've been able to be out in the community and promote who we are as a credit union and what we stand for. Because of that's really important to the younger generations in many different ways. Again, I think marketing has a lot to do, you touched on the data right and information that we have, and the data we have on our members and that's extremely important that we understand that before we even move forward, right. Understand who you are before you try to become somebody, something else, or try to promote something. So to me, it is extremely important to have a good understanding of who our members are right now.

Host: That's really key. I think you hit on something really important. Determine who you are before you go out and tell everybody who you are, or try to tell everybody who you are. So, if you don't have value proposition or something that your credit union stands for, start there. You can also use the data, but start there because you can't convince somebody outside, of who you are, if you don't know who you are to begin with. But I love the idea of, you know, not only your, your value proposition, but aligning a social responsibility value proposition, along with that, that aligns with the credit union's value. So, the example that I saw, I can't think of what the company was, but, you know, for example, their entire value proposition around social responsibility was creating clean drinking water for southern Africa. It's very broad, but if a credit union can take on a broad social responsibility umbrella, then everything that you do, if you're donating a thousand dollars, you're donating a thousand dollars towards making this greater cause happen. And overall gives you a bigger brand impact.

Rui: I think quite honestly, as an industry and I speak for myself, I've been in this industry for many, many, many years. I don't think we do a good job at letting everyone else, letting the world, letting the communities in general, know what we do. That's a big problem. I think we tell a good story to each other.

We kind of know each other through the leagues and the associations at CUNA, that kind of thing, that the type of products that we're doing. But we don't really utilize that to our advantage by letting others know that that's what we do. That's what we stand for. These are the products that we provide, whether it's solar loans or electric car loans, those types of things that are part of this global change that we are trying to see to enhance the environment that we live in and we just don't do a good job at promoting that and letting people know we here, we are part of that change. So to me, there's a huge potential there to do something in that space, and again, to demonstrate that we are socially responsible organizations that care about the environment, that care about all these different things. We tend to kind of focus on just the banking side of things and doing loans and helping them, that kind of thing.

But, this social aspect of it, I think has a tremendous amount of potential. And I don't think there's other industry, the banking industry or some other industry that is better aligned, better prepared to take advantage of this particular point in time. So to me, it's important that credit unions really align their strategic initiatives to include the whole social responsibility aspect of it, because it's not just something that sounds good. I think from a business standpoint, I think it will make economic sense to do that as well.

Host: Yeah, it's a, it's a big piece that's missing, I think from a lot of strategic plans out there with credit unions. I mean, if I had to guess, I'd say 10% of credit unions even have a social responsibility value at all. I mean they think they do, but they probably don't. And then Rui, my final question is going to be, and this is a really hard one. It's like when somebody asks me how to quantify branding, and it's really difficult, but, how does creating social impact and social responsibility, force for good. How does that translate to bottom line growth for the credit union?

Rui: It depends. If you embed that into the strategies that the credit union has. So, from a strategic standpoint, you make sure that the social responsibility aspect is embedded within it, then I think it's, the potential is enormous. Right? But if you just create a website that says that you are a social responsible, you create a website that has a bunch of these products and services that are good for the environment or the green products or they call them; that is probably not sufficient. Right? So everything that we do internally, from a strategic standpoint, discussions with the board, discussions with employees, to me, that it has to be embraced by everyone within the organization to be able to be successful. The MIT, we can say that MIT Federal Credit Union is a great brand, well recognized that people know MIT.

Well, that's a university, right? That's a global university. For MIT Federal Credit Union I think we need to go beyond that. And I see the social responsibility aspect of it as being part of a strategy for us to be able to connect with our community, connect in a meaningful way, in a genuine way to be able to attract members that want to bank with us because of who we are and not because of what we offer.

Host: Yeah, that's a really great way of putting it, making it part of your behavior internally. It's just part of who you are and ultimately it will turn into loyalty and loyalty is, pretty easily quantified these days, for credit unions.

Rui: Yeah. And I think loyalty goes beyond the loyalty of just the members. Right? I think it goes to the loyalty of our employees as well. As we look into attract new talent and looking to differentiate ourselves from the banker up the street, this is, could be the differentiator, that a young person who's coming in out of college or was a professional already, all things equal and a great location, great organization, the social aspect, I think is what's going to draw them in. They kind of have a sense of purpose. They don't have a sense of belonging to an organization that's relevant in the community and is making a difference. So even from an employment perspective, I think this could be a huge benefit for credit unions.

Host: That's a great point. Having a purpose is really, really important. We, you know, work with a lot of credit unions and a couple credit unions they're successful and they're big and they're growing, but then they hit a little bit of a slump and they can't figure out what's stalling them. And, we go in and we end up talking to the staff and we find that the staff is just begging for a purpose.

And they're asking for something to, just to be led, to be led in a, in a direction. And if that tiny piece of the puzzle can be fixed, then the credit union's unstoppable. And so it really is a gap sometimes in growth for a credit union, if the employees don't feel purpose either.

Rui: Correct. In general, as, as human beings, we all want to be part of a good thing. Right? So few are part of an organization that are doing great stuff in the community, and are social responsible from an employee perspective. I mean, you want to stay with that organization. You want to grow. Obviously all, all things equal, like you gotta get paid and all that stuff and have a good salary. But beyond that, it's become, this is the differentiator. So to me, that is a huge aspect of what we are trying to do at MIT is create an organizational culture that's aligned with the purpose and the purpose that serves the needs of our members, but not so much, on the, from the financial perspective, in terms of the product and services from a social responsibility perspective that they want to take their next mortgage with us, they want to help us, have their own list of values then you reinvest back into the community and contribute to the partnership we just formed with a local organization that is doing great things in the community, helping to better the communities that we serve.

Host: Yep. And it helps with culture and culture helps absolutely with, with bottom line thank you so much, Rui.

Rui: You're welcome. You're welcome. It was a pleasure to talk to you.

Host: Yeah, is there anything else that you think is really important for our audience to hear about social responsibility and growth?

Rui: Yeah, I think it's kind of what I said earlier in terms of, I think credit unions taking some time to think about their social responsibility from a business perspective and that makes business sense. And also just being part of a movement where credit unions can play a huge role, because we don't have to pretend to be something. We are who we are, and we are socially responsible by nature. And I think we need to make that more obvious to everyone. So, everyone can see that credit unions, how they are. They just, they're not reinventing themselves to take advantage of the current environment to be able get into the next one. Right? So I think that's kind of the message I would leave.

Host: Amazing. Thank you. That was a great way to wrap up. I really appreciate it Rui. So great talking with you and thanks.

Rui: Same here. I love it. Thank you so much. Appreciate the time.

Bill Klaproth (Announcer): And thank you for joining us and to connect with Hillary or Kelly to simplify your credit union marketing needs with EmpowerFi's full service marketing and design support, please visit empowerfi.org. You can also email info@empowerfi.org for more information. And if you found this podcast helpful, please share it on your social channels and check out the full podcast library for topics of interest to you. This is the Speakeasy Financial Marketing podcast. Thanks for listening.