ANAHEIM, Calif.—A new study reveals that traditional financial services are less compelling to Millennials, who define success through their family and children.
The report also suggests credit unions have a strong opportunity with this demographic, but need to increase their awareness with the group.
The report is the culmination of the annual “What Matters Now” consumer research conducted by CUNA Mutual Group, and was released during CUNA’s Marketing and Business Development Council Conference here,
“Millennials are often described generally as one large group, but in reality this generation is not a one-size-fits-all, and they continue to grow in their diverse financial needs,” said Susan Sachatello, senior vice president of TruStage, CUNA Mutual Group's consumer brand. “Our research shows Millennials’ financial needs vary substantially based on age, presence of children and even their geographic location.”
Millennials currently comprise a quarter of the population – or about 75 million individuals – and currently dominate the workforce, owning $200 billion in direct purchasing power.
According to Sachatello, there is a significant opportunity to attract Millennials to credit unions.
“Credit unions have a strong association and alignment with the values that are important to Millennials,” she said. “Understanding this population and engaging them in the credit union value proposition could be a significant source of membership growth.”
According to latest research, only 14% of millennials have their primary financial account with a credit union. However, 69% of Millennials would consider opening a credit union account, indicating industry awareness continues to be a challenge for this market segment.
Highlights from CUNA Mutual Group’s research:
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Millennials below 30 years of age are more apprehensive about debt and credit.
Millennials below age 30 are more worried about paying off their student loans, with 54% expressing they are very/fairly worried, compared to 40% of Millennials over 30. Additionally, Millennials below 30 are less likely to have a current car loan (29% vs. 37% for over age 30).
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Millennial parents are making big purchases.
Millennial parents are about three times more likely than non-parents to be in the market for a new home within the next year (22% vs. 7%). Thirty-seven percent are likely to be in the market for a new car, and 54% will be in the market for a new or used car in the next 18 months.
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Millennial definitions of success vary by geographical region.
Millennials in the West and Northeast regions align success with raising good/happy kids, having a great spousal relationship and staying in good health. Millennials in the South and Central regions were more likely to report having a strong relationship with God as a measure of success.
“Millennial needs are strikingly different from those of the generation before. This new research provides compelling insights into what really motivates Millennials and how success is defined by their family, not their financial situation,” said Laura Eblen, director of awesomeness, Mazuma Credit Union, Overland Park, Kans. “It is a call to action for credit unions to address Millennials’ emerging and diverse needs, to redesign their strategy and go beyond traditional products and services to attract this market segment in a more personal and meaningful way.”
CUNA Mutual's report included more than 25,000 individuals, and used a combination of quantitative, qualitative, primary and secondary research methods.