Millennials, that group of young adults between the ages of 23 and 38, are gaining recognition as a consumer demographic of growing importance. As they overtake Baby Boomers as the largest adult generation, financial institutions are looking for the most effective ways to engage them.
But earning the trust – and business – of Millennials is no simple task. As per FICO, Millennials are 2-3 times more prone to switching banks and 45% of them even cited high bank fees as a major reason to do so.
But credit unions aren’t big banks – and this presents an important window of opportunity.
Today, half of credit union members are over the age of 53. Many of their major financial life milestones have taken place. They’ve purchased a home, saved for retirement, and built a nest egg. The opportunities to expand the customer relationship are fewer.
Millennials still have many phases of life in front of them – though they may look markedly different than the generations that came before. Their lives are powered by technology. Some have little interest in, or ability to purchase home because of the burden of student loans. Many Millennials report a lack of budgeting or a financial plan for the future, which causes some to spend more than they earn. This creates financial stress that contributes to overall levels of anxiety.
It would seem they are a perfect audience to benefit from the personalized and personable service a credit union can deliver. But right now, only 24 percent of credit union members are Millennials.
Credit unions that want to cultivate trust and lasting relationships with the Millennial audience can consider the following ideas.
Offer improved budgeting tools.
Credit unions can track members’ purchase habits and provide Millennials with personalized budgets that helps them alleviate financial stress and even begin saving.
Consider experiences before services.
A study by Deloitte showed Millennials prefer experiences over “things.” Credit unions can translate this finding through attractive and efficient mobile apps that deliver superior customer experiences to an audience that expects, and heavily utilizes, digital services.
Meet their need for education.
Millennials are a generation open to new information. Appeal to this through highly tailored programs that provide financial education across an array of relevant topics. The needs across this group of young adults vary widely.
Protect their privacy
Credit unions can do more to win Millennials’ confidence by showing the measures you take to protect their personal information and offer secure banking.
Stay community focused.
Millennials favor institutions that are socially responsible and active locally. They may find credit unions’ strong community focus more attractive and rewarding to do business with.
We’ve been studying Millennials closely to help credit unions better understand the meaningful trends and effective ways to reach them. From these high-level strategies, data analytics provide the insights needed to develop and execute the actions that get the right results. Contact us to learn more about how we can help.