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What’s Up With This Apple Savings Account?

This started as a LinkedIn post. However, as I kept adding explanations, it became obvious…this is an article. As an industry, credit unions need to understand what is and isn’t going on with Apple’s upcoming savings account. And what that means for all of us.

I Speak Apple

Two silhouette heads with iPhone and piggy bank inside with speech bubbles
My typical credit union conversation.

If you’ve spent any time here, follow my Twitter handle, or spoken to me, you’ll know I’m really into Apple. If you have a question about a product, historical factoid, version release schedule, or even specs, I can tell you straight from memory. (There’s even a security fix credited to me!)

Why do I share that? Because I want you to realize that I’m possibly the most qualified person in our industry to talk about the “doings of Apple”. I’ve connected Apple to credit union insights in 49 separate articles (making this one the big 5-0!).

In 2019 I claimed that Apple reinvented (improved) the credit card. Back in 2017, I started the conversation on Apple Pay Cash (now Apple Cash), their first foray into a “savings account”, and warned that they became the face of your institution for members.

Last year when Apple Music added both Lossless and Dolby Atmos to their service, I asked credit unions if they were delivering hi-res value to members. Just having music, I mean, checking accounts, was no longer enough.

When others start talking about Apple’s banking intentions, I listen. And now we’re here to clear up any misconceptions, while also highlighting the enormous challenges (and opportunities) this adds for your institution.

ApplePay & Your Credit Union

Mobile Payment Cash Exchange Future
The future of payments.

Suffice it to say, Apple is big enough that when they do something, or even just hint at it, industries react. ApplePay was introduced in 2014. By January of 2015, I was warning that it was the new standard.

If someone had a good experience with that service, they would prefer to not go backwards in technology and convenience. (“Luckily” for credit unions, it wasn’t always a good experience yet because of point-of-sale incompatibility and untrained staff. Not anymore.)

At the time, I was impressed by how fast many credit unions stepped up and made their cards ApplePay compatible. In some ways, it was laying the groundwork for handing your member’s PFI over to someone else (that’s just a nod to the cleverness of Apple’s slow, deliberate, and integrated approach to things), but, ah well.

Despite these risks, ensuring your cards can be added to mobile wallets is necessary.

The Apple Savings Account (they’re just going to call it Savings) has both nothing and everything to do with this history.

Savings. By Apple.

Innovation - Mindshare - Profits: This is the (Apple) Way
This is the way.

A recent article in CUToday implores credit union executives to “pay attention” to Apple’s banking intentions. It has many great points about the merging of savings and checking accounts, the ease of digital account opening, instantaneous access to rewards, and more.

“[I]t’s the full spectrum,” Richard Crone explains. He’s right. Apple strategically creates products and services which start out as separate initiatives, but then slowly (and sometimes unnoticed) merge together. Before you know it, they just took over an industry.

Apple plays the long game, and their end-goal isn’t market domination. It’s mindshare. With a huge profit margin no one else can match. While other companies sell far more phones, Apple rakes in over 90% of the profits for the entire industry. Can you name 5 other smartphones?

You can bet this is their approach to banking, too.

The Pre and Post Apple Effect

Old and New Computers - Before and After Apple
Remember boring beige computers?

Apple also redefines traditional categories. There were computers, but then came the Macintosh. There were music players, but then arrived the iPod. We had plenty of smartphones, but we didn’t have an iPhone.

AirPods revolutionized what we thought headphones could be. The Apple Watch made a smartwatch practical, fun, and a crucial tool in monitoring and improving your health.

Now take a step back: All of these products complement each other, with subscription services to overlay. AirPods auto-switch between every Apple device you own. iCloud+ (starting at $0.99/month) links data from Apple TV (have you tried AppleTV+?) to your Mac, while adding privacy protection and more.

Apple Wallet is their “life” hub. It’s a banking app, but it’s also a platform, where you can access cards from other institutions, including your credit union, plus employee badges, mass transit passes, Disney World Magic Bands, even your car keys and ID.

And you just noticed that Apple is slowly replacing your physical wallet. No way you’ll go anywhere without your iDevices now!

Apple & Your Credit Union: Bringing Clarity

Magnifying Glass on Crystal
Crystal-clear. Because it’s a crys…

There are a lot of similar-sounding services, platforms, and even physical cards. So let’s clear up any misconceptions (including in that above-linked article):

  1. There is no Apple Card Savings Account…yet. It’s almost definitely going to launch soon (they missed the expected release with iOS 16.2). So you’re not competing directly for at least a few more days (as of writing).
  2. Apple’s savings account will be limited (initially) to users of the Apple Card, which is credit. Can’t qualify for the credit card? You don’t get a savings account. This will likely evolve over time, but for now, they want the tie-in, which makes sense.
  3. To be clear, Apple isn’t a bank. These accounts and services are through a partnership with Goldman Sachs. This should remind you of a past article. There’s more, but that’s for the next section.
  4. A lot of different and related services are mentioned.
    1. ApplePay is the platform that lets you digitize debit and credit cards (like the ones at your #creditunion) and use them from your iPhone, iPad, Mac, or Watch.
    2. Apple Cash (formerly called Apple Pay Cash) is the virtual account powered by Discover and Green Dot Bank where your Daily Cash (rewards) go.
    3. Wallet is the app, but also the platform, and it requires an iPhone.
  5. “Supporting” Apple Wallet at your credit union should already be done and just lets members pay with your cards through their iDevices. This has absolutely nothing to do with their savings account or the Apple Card. Consider this your lifeline to digital audiences, nothing more.

Even more simplified:

  • Apple Savings. A huge threat to your debit usage.
  • Apple Card. A credit card that makes yours look old.

Digital, Sure. Also, App-Based.

Wallet App - Cards and Keys
There’s an app for that. Wallet.

All of this, of course, works through a single app, Wallet. As Crone explained, “the enrollment happens online”. In fact, everything happens digitally, on a single screen. When credit unions talk about simplifying applications or streamlining account openings, it has to be this easy.

You can’t do it alone. And that’s ok. I’ve discussed how to address this before. My company even has some ideas.

To Succeed: Be A Credit Union

Diverse People and Heart
You know this part.

Bottom line: You can’t beat Apple at their own game.

But that’s ok, because offering credit cards and checking/savings accounts has never just been what your credit union is about…right?

Compete by living your mission.

Earn loyalty by standing up for members.

Keep it simple by offering the best available digital services.

Market the difference, not the similarities.

Apple and other companies will continue to innovate simplicity and creep into more industries. The path for survival, and potentially even great success, is in knowing your why. Remember, Apple doesn’t need to be the first, nor the largest. They just want to be the best for their customers.

And isn’t that a pretty credit union-esque thing to be?

Your Credit Union Members Want Simple

I Love Choices

I’m the kind of person who rotates between five brands of orange juice (I live in Florida and this is a perfectly normal thing here).

As a tech geek, I also dive into Settings menus on all products to see what I can personalize, edit, or tweak.

Even Choice-Aholics Want A Clear Decision

But even for me, a choice-aholic, there are things I’d rather be decided ahead of time. If I plug it into the wall, I want it to be UL listed. Don’t give me the choice of 6 highly similar products with varying degrees of regulatory approval, safety certifications, or otherwise.

Offer one. One “just right” option.

Variety comes in actual aspects of the product or service. Let the provider whittle down the “backend” complexity. That’s why I’d buy from them, because they did the work so I don’t need to.

Which brings us to you. The smarter choice, the only decision your member should have to make.

Oh Boy! A New Member!

Wonderful, you’ve welcomed a new member to your credit union family. Let’s help them get set up with a checking and savings account, talk about refinancing loans, and perhaps see if a credit card makes sense (use that credit pull to position the conversation around rewards, interest rate, or balance transfer).

Shouldn’t be too hard. That’s only 4 things, and, more than likely, 3 are pertinent to the member. So let’s get that checking account opened first, because it can help make you their PFI. You have more than one? Ok, no problem, we’ll help them decide.

So, should they go with Advantage Checking, Premium Checking, VIP Checking, Rewards Checking, Rewards Plus Checking, Free Checking, Senior Checking, Youth Checking, or…wait, there’s more?

Just like those famous droids, “these aren’t the choices you’re looking for.”

It’s checking. Not choosing your preferred model of F-150 (if you aren’t aware, there’s oodles of options). You only need one. Maybe two. That’s it. If your board insists upon the old and boring free checking, keep it.

Providing Immense Value

You’re about value. So make your checking be something your members smile about having (and even paying for…yeah, seriously). Add a clear monthly fee Premium Checking with more benefits than your members can believe.

Since you’re getting a small monthly fee, offer everything:

  • Dividends (though low, offer higher rates up to a certain dollar amount at very low cost and high perceived value)
  • Rewards on debit transactions
  • All your standard services
  • Plus, value-adds like ID theft monitoring, mobile phone insurance, and more
  • Budget-conscious members, whether young, rebuilding credit, or some other life journey, always have the option of your free checking.

Basic and free or Premium and small fee. Simple.

When’s Too Many Too Many?

Doors Along Wall

That’s a lot of doors. I mean choices. Maybe I’ll just wait here.

Some credit unions have 5 or more checking accounts. That’s. Too. Many. And then you can become eligible for other benefits through achieving a series of Reward Levels. These are based on the depth of a member’s relationship.

Maybe it means lower loan rates or higher dividends. Sometimes it adds ATM fee reimbursement, or other value-adds. I’ve written about this before.

Once we’ve made it through checking, maybe the conversation migrates to an auto loan. How many LOS platforms do you have? Exactly. One. Because more would be unmanageably complicated.

Yet, how many “car resources” do you offer? Find one which offers the best overall experience for your members, and you’re done.

It’s A Trust Thing

Your members joined (and continue to bank with you) because they trust you with their money. That’s saying something. Believe me, if you explain that the credit union has determined “so-and-so” is your preferred option for members, they won’t question it.

Cat and Dog Laying TogetherThey trust you’ve done the work to select only the best solutions. They could search Google. And, most likely, they already did. Then, they asked you.

Your member just wants a place to easily manage their finances! Keep it simple. Then you can focus on improving your members’ lives. Which should be your driving force in every decision.

Disclosure: My company partners with a firm which offers a comprehensive checking solution. It’s in hundreds of CUs and is loved by staff and members. My company also offers a Car Buying platform for CUs. Knowing when members are in the market saves everyone time and money. 

Your Members Hate Keeping You In Business

“Free is the greatest product never sold.” – Me, just now

Did I just come up with some crazy insight? Who knows. I just heard quotes at the beginning of an article lead some to get “hooked” and continue reading. See? You’re reading.

Back on topic, what do you offer for free at your credit union?  Of those things, which are premium services at other financial institutions, be they banks or other credit unions? I’d like to ask why you decided they should be free. Is there a cost to you? Is it a benefit to the member? If the answer to both of those questions is “yes”, then wouldn’t it make sense to ask, “what’s the benefit worth to the member?”

I’m all for lower or eliminated fees. They are punitive forms of payment (and research shows they are overwhelmingly burdened by those least able to afford them). That means your members aren’t happy when they have to pay. However, many subscribe to Netflix, Amazon Prime, Birchbox, and Blue Apron. The money spent is done so happily, as these companies offer more perceived value than the cost. Their products/services are a reward for spending, not a punishment resulting in forced spending. 

So, let’s review. Your credit union makes its money through things people don’t want to pay, like interest rates and fees (even if yours are lower than competition). There is a proven model in society of paying for things you do want. Credit unions should be things people want. What if you could change the dynamic, so your members are excited to “renew their membership” with their credit union?

It’s time to turn the whole model on its head. Instead of jumping about cheering for free and boring, let’s charge for value. Use that income to reduce or eliminate punishment fees. Shift the cost burden for your operations from those who can least afford it to those who want to pay for the benefits. Create an environment where members are happy to pay for all they receive from you. Guess what also comes with it? Members remember who you are. They consider you first for financial solutions. They recommend you to family and friends (your referral platform is ready, right?).

Will all members see the value and want to pay? No, and that’s fine. You can maintain basic, free services for those members. Remember the ones who couldn’t afford to pay? Now you’re really doing them a favor and living the credit union mission.

Sure, things like interest rates cannot go away. And you’ll have to keep some fees, just to protect the credit union. But what’s so bad about (partially) becoming a pay service offering incredible value? Netflix couldn’t offer what they have without charging. Blue Apron’s recipes and food would be pretty awful if they were in a race to free.

So go ahead, step out of the free zone and get uncomfortable. We all know you need to make money to survive. It’s just that none of us want to be the one who does the paying. How can you change that dynamic?

Disclosure: My company offers fee-based checking solutions to credit unions and community banks which deliver ongoing and substantial value to members.

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