Dwayne Naylor Of Civic Federal Credit Union On How They Are Helping To Promote Financial Inclusion

An Interview with Orlando Zayas

Most of us take it for granted that we can open a bank account or a credit card. But the truth is, according to the World Bank, close to one-third of adults — 1.7 billion — are still unbanked, and have no access to a transaction account. About half of unbanked people include women in poor households in rural areas or out of the workforce. What can be done and what is being done to promote more financial inclusion? To address this Authority Magazine started a new series about Companies Helping To Promote Financial Inclusion. As part of this series, I had the pleasure to interview Dwayne Naylor.

A passionate credit union advocate, Dwayne Naylor has worked in the credit union industry for more than 30 years. As President of Civic Federal Credit Union, his focus is on the “triple bottom line” — a model of sustainable banking that delivers economic, social and environmental benefits. This is what drives the Civic commitment to inclusion of people, planet and prosperity.

Thank you so much for doing this with us! Before we dig in, our readers would like to ‘get to know you’. Can you tell us a bit about how you grew up?

My father was in the Air Force which meant we moved often in my youth. As a result, I lived in seven states and had to learn how to meet people quickly. Although I did not know it at the time, I was learning to admire different people in different cultures. There are beautiful people everywhere and we all want the same thing: love, safety, food for our families, and to have an impact on the world around us. This perspective from my childhood has helped inform my travel to 28 countries, and my work in global cooperative finance.

Is there a particular book that made a significant impact on you? Can you share a story or explain why it resonated with you so much?

I’d have to say that book would be “The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits,” by CK Prahalad. For me, this book resonated on several levels. The first reason is that it reinforces the importance of purpose and people, and using business as an agent of world benefit to create a world where business can prosper, human beings can flourish and nature can thrive. The second reason is the act of using money for good. In a commodity market like financial services, most companies rush to service the top level of wealth which results in a crowded, overserved market. But this book reminds us to put people first and talks about purpose-driven organizations. By using that model, the focus moves down the consumer pyramid to serve the middle and underserved markets, which are larger. This mindset allows for much greater volume and impact on improving lives. Most importantly, purpose-driven organizations build trusting relationships and measure the impact of using money for good. This entire approach resonates with me because it has many benefits — not only for the people being served but for the engagement of the teams in our workplaces. It allows the financial cooperative to be more innovative, fun, and move faster than anyone in the market. The entire concept is counterintuitive, but by going the opposite direction from the traditional financial institutions, we create a sustainable impact. This book reinforced my leadership style to think big and zig when most people zag.

Do you have a favorite “Life Lesson Quote”? Do you have a story about how that was relevant in your life or your work?

It would have to be the quote by Neale Donald Walsch, “Life begins at the edge of your comfort zone.” To me, this means moving toward a vision of the future — a process that can be uncomfortable for some, but one that brings out the best in team members and builds trust within the business systems. For us, at the edge of chaos is innovation and a focus on doing good. An organization that embraces the future is technically superior, as well as innovative in creating new markets. It is my experience that teams need each other, and building confidence and trust are essential parts of the work environment. Most important, on the service side, people have broad authority to problem solve and create solutions. This results in team members bringing their whole authentic selves to work and constant learning and improvement.

How do you define “Leadership”? Can you explain what you mean or give an example?

Leadership is aligning your team towards a bold vision with purpose; providing diverse viewpoints and experiences; giving broad authority to create; investing heavily in learning; and having the courage to stay the course during setbacks. It’s a multi-tiered approach that empowers people to be the best they can be — and make the most impact. I believe that business is an agent of world benefit. Leading with a focus on the triple bottom line provides constant attention on all activities to ensure each action is aligned with the mission and vision — i.e. the right thing to do. In my experience, it is much easier to lead a traditional hierarchical organization where people are told what to do. Being a strength-based organization brings the best of everyone together, including our members. No organization can compete with the strength of a large community. Leadership is constant.

Can you share the most interesting story that happened to you since you began your career?

Three years ago, I was working with the World Council of Credit Unions. They are a powerful organization engaging in advocacy, development and education to champion and grow credit unions and cooperative finance worldwide. We were in the Middle East helping to organize a financial cooperative in that region. During dinner in a tent in Kurdistan, we were listening to refugee camp leaders share stories of trying to pay ransom to ISIS to have their daughters returned after years of captivity. Our immediate goal was to organize their assets to help get their daughters back from captors. Additionally, we were there to help build businesses that would positively impact the region, improve their standard of living, and provide hope for a different future. It was an emotional experience for me personally, as I understood the impact of using money as a tool for good through collective action.

Ok, thank you for all that. Now let’s move to the main focus of our interview. Let’s start with a basic definition so that all of our readers are on the same page. What exactly is Financial Inclusion?

As a way to show the contrast, let’s start with financial exclusion. Each society and community have a silent population of people who are hardworking, but are not a part of the financial banking system. For various reasons, they are ignored by traditional financial institutions or not allowed to open an account. The term financial inclusion is creating ways for all people to access banking and learn more about the impact of their money decisions on their future.

What does it mean to be “unbanked”?

An unbanked or underbanked population must use alternative methods for financial transactions that are expensive and time consuming. These include the basic necessities that we take for granted such as staying in a hotel, driving through the night for an emergency or replacing tires on your car — they are all difficult or impossible due to being outside the system. This makes paying bills difficult and may require paying high fees for cashing checks, making deposits and any other payments-related activity.

For the benefit of our readers, can you explain some of the typical reasons why a person might be unbanked? Why can’t they just walk into the local bank and open an account? Why can’t they simply open an account online?

There are a few reasons why a person may be unbanked. For example, they may have had previous negative experiences with financial institutions; being belittled due to their socioeconomic status or repeatedly turned down for needed funding without any explanation as to how to qualify. An increasingly common reason is they may come from an environment or culture that doesn’t trust traditional banks. And finally, they may have had significant hardships that impacted their financial circumstances and forced them to look for alternatives outside of the banking system.

Can you tell our readers a bit about your work to promote Financial Inclusion? Without saying names, can you share a story about a person who was helped by your initiative?

As a credit union, our entire mission is rooted in financial inclusion. This means serving as advocates for people, helping them become established, and believing in them. There are lots of ways we do this, but here are a few that come to mind. For one, we have a very personal approach to serving our members and this means that we are willing to work with people, meet them where they are, and provide solutions tailored to their needs. Specifically, the type of story that we are proud to say happens pretty often is when our team saves a member hundreds of dollars a month just by taking the time to understand their situation and provide the best recommendations. Another example was us helping a small business during the pandemic that needed equipment financing — and fast, to lock-in discounted pricing. Our team made it happen. It’s very important to us that the level of attentiveness and support not be reserved only for financial services customers with deep pockets, but it should be available to all. Another thing that matters is access. By providing financial services digitally, more people are empowered across North Carolina with access that can help improve their standard of living. We have lots of members who both appreciate the immediate access of our digital services but also love to pick up a phone and call or chat or text us for support. And taking inclusion a step further, we have field teams that travel all over the state when the level of care requires that in-person touch. One last thing I’ll add is that people are at the center of how we design our products and services. A very important step in being more inclusive is removing financial barriers to entry in the first place. Many of our fees are very low or nonexistent. As a credit union, our shareholders are the very members we serve so the way we run the business is designed to put and keep money in the members’ pockets. And this applies to all members; we welcome those who are just starting out or who need help to recover from a hardship.

This may be obvious to you, but it will be helpful to spell this out. Can you articulate to our readers a few reasons why it is so important for businesses to promote financial inclusion?

Yes, the first reason is that all businesses work with people both internally and externally. The act of empowering them, serving them, respecting them, and growing with them is a pinnacle of service. All of us at some point in our lives have needed a trusted advisor to show us a different way, provide a chance and believe that we all want the same things out of life. Financial inclusion provides a community platform that allows all people to grow, save money and build wealth while supporting their organization. It makes all the difference. From a business growth perspective, serving a group that is forgotten or pushed out of the economic system is a tremendous opportunity from an uncrowded market. There is a strong business case for inclusion, including financially. All businesses can benefit from knowing that inclusion helps people, communities, and various growth initiatives. The most valuable piece is the opportunity to serve this group, move them through the stair-step improvement platform and economically empower them to build their lives, businesses, educate their children, and live in a home. Inclusion helps people improve their standard of living, create jobs, and build strong communities. Financial inclusion is the right thing to do and it is a competitive advantage. The power of serving this group lies in the cyclical nature of a purpose driven organization. As this group moves through life stages, they provide the stability and support for reaching the next generation. This is a strategic advantage.

Ok. Here is the main question of our discussion. You are an influential business leader. Can you please share your “5 Steps Businesses Should Take To Promote Financial Inclusion.” Kindly share a story or example for each.

Begin with Purpose. Being intentional about inclusion is a critical first step. By making the choice to lead in this way, the decisions that follow come naturally as we discover, design and develop the solutions to serve. And, for all businesses, they will experience challenges along the way so being rooted in purpose gives us all a lighthouse to reference in more challenging times. One of the things that helps us with this is establishing a habit to find and share stories about our members. We do this regularly as a part of our work before we start meetings, planning, etc. Big stories and small ones, things we got right or things we screwed up; we want to hear and discuss it all as a team. It helps to keep us centered on our purpose of improving people’s lives and helps ensure that the decisions we make every day are in line with what matters — our members. All businesses can adopt this mindset to help promote inclusion in their organization.

Find the Right People. This is so critical to the success of any organization. In our case, we strive to empower decision making across our teams, so it’s important that we trust the people we’ve put in place to execute on that autonomy. We need to help our teammates understand our purpose and ensure that it aligns with who they are. That way, making the right call becomes second nature. We can see examples of this in the contributions of our folks on the front lines. The people at Civic serving our members make in-the-moment decisions throughout the day that directly impact lives. If there are things about the way we do business that get in the way of that, we also need these same teammates to help us do better. All businesses need people in their organizations with the courage to challenge and the compassion to care enough to help us all get it right.

Prioritize Prosperity. By focusing on the success and well-being of the people we serve, it forces us to make their prosperity a priority over our own. All businesses can ask questions that will help reveal insights. For us, we ask: How do we make our checking account appeal to those who may be mistrustful of financial institutions? How do we structure our fees so that the small business owner who is just testing the waters, and still has a day job, can afford to open the account? How do we provide the best returns on our savings accounts so that our members and communities prosper along with Civic? The credit union mantra of ‘people helping people’ exists because we strongly believe that we can make a world of difference by keeping as much of our members’ money in their pockets as possible. They are our owners and primary stakeholders and by continuing to invest in their success, we quite naturally help with our own. By prioritizing prosperity, businesses can better understand and focus on solutions that help their customers and prospects.

Build Better Together. Most businesses and organizations serve some sort of community. A big part of inclusion is working closely with that community to create the solutions to the problems you aim to tackle. This seems painstakingly obvious, but in the financial services sector it’s not that common. At our credit union, we have a variety of staff and teams who work daily within our communities. By doing so they help us keep our ear to the streets, so to speak. We also have an advisory group in one of our key member sectors, firefighters, and this group exists solely to help us understand the special needs of those members and to provide us with direct input and feedback on how we can improve and prioritize their needs. This allows for effective representation for our members as we make critical decisions about how we run the business.

Measure and Motivate Purpose. Like many businesses, and especially those in the financial sector, many of our metrics are traditional. Quarterly and monthly numbers, anticipated balance sheet projections, membership goals, etc. However, since we prioritize people over our profit margins, I believe it is very important that the things we measure reflect that. There is a trend among credit unions to change the metrics we use to run the business to reflect the purpose-driven nature of our work. At Civic, we want to be a part of this important shift. Prioritizing financial inclusion in all the ways we previously discussed will gain a lot of traction in our organizations as we tie critical business metrics to measuring how successful we are at ‘walking the walk.’ I challenge myself, my team and your readers to join in this positive move towards making our entire business environment more inclusive.

You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)

Cooperative finance is the tool that can address world poverty. And business is an agent of world change and benefit. We are working toward this in North Carolina. I did graduate studies as a part of a global MBA program at Duke University. The coursework took us all over the world. At one point, I was on the banks of the Amazon river speaking with my private equity classmates. We were looking at the businesses that had been flooded and the group was discussing ideas to help generate money for the community. I shared that cooperative finance could improve all of their lives by pooling resources and creating an economic engine that would not only live in that society, but could be used to eradicate poverty around the world. At the time, my dream was to create a global citizens bank that would allow the engaged global citizens to build a community that was strength-based and purpose driven. Fast forward some years later, and society has shifted to be more receptive to ideas that benefit humanity and make a difference. The time is now for people before profit. Back then, my classmates laughed, but this type of organization is needed now more than ever for full financial inclusion, not just microfinance.

Is there a person in the world, or in the US, with whom you would like to have a private breakfast or lunch, and why? He or she might just see this, especially if we tag them. :-)

A private breakfast or lunch with Bill Gates would be a possible catalyst for taking financial inclusion to a global stage. The Gates Foundation has a financial inclusion division that is doing incredible work. We are both aligned on helping to change the world. The concept of a global citizens bank would not just provide financial services, but represent a development organization and provide exponential impact to the value holders. It is a different approach, one which leverages the Internet, complexity, and networks to drive engagement. The organization would also launch global activities that remove poverty from the planet. To get the global citizens bank idea off the ground, we will need $100 million in capital to start.

How can our readers further follow your work online?

This was very meaningful, thank you so much. We wish you only continued success on your great work!

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