TAMPA, Fla.–Three credit unions and a research firm have joined together to publish an in-depth white paper offering “A New Look at Millennials And Credit Unions in America.”
One key point is that while marketing seems to dominate the discussion around attracting new members, especially Millennials, there are “intangible criteria” that also play a “mission-critical” role. Specifically, “reputation” is a critical intangible in gaining new members, especially those at the younger end of the spectrum.
The research and its analysis was conducted by GTE Financial Credit Union, Tampa; Patelco Credit Union, Pleasanton, Calif.; Financial Partners Credit Union, Downey, Calif., and The Center for Generational Kinetics, a research firm that focuses on Millennials that is based in Austin, Texas.
“Credit unions, in particular, are at a critical juncture to understand, adapt, and grow with Millennials,” the white paper observes. “Many of the core aspects of credit unions, such as being not-for-pro t with a strong local connection, would seem to hold a great deal of appeal to Millennials, but is this true?”
The white paper goes on to explore that question and a number of others, including the role of friends and family and issues around mobile banking.
“The national research study uncovered that more than any other segment of financial institution customers, credit union members consider the institution’s reputation to be influential in their decision to become a member,” the white paper states. “In fact, 42% of current credit union members list this as an influencing factor for why they joined their current credit union!
“This is a significant number on its own, but when compared with other financial institutions it becomes even more impressive,” the white paper goes on to say. “Only 31% of national bank customers and 24% of local bank customers say the bank’s reputation was influential in why they chose their current bank.
The Bottom Line
“The bottom line for credit unions is that promoting their reputation is absolutely critical to attracting and keeping members,” the paper continues. “This importance will likely only grow with Millennials who are frequently cited as saying that mission, vision, values, and sense of purpose are important to them when choosing everything from an employer to a consumer brand.”
But there is a sticking point, the paper found. While the CU business model may appeal to Millennials, that is irrelevant if a Millennial “cannot explain what a credit union does or how a credit union differs from a traditional bank,” the research found. Specifically, it found 53% of Millennials say they are either not very confident or not at all confident they can explain how credit unions differ from banks.
The paper also goes on to highlight how to promote the credit union not-for-profit mission, how to leverage friends and family, and why recommendations are a “two-way street” with Millennials.
The Value of Local
In particular, the paper notes that CUs have a strength due to the popular movement toward valuing locally owned businesses.
“The popularity of ‘buying local’ and ‘keeping dollars local’ has become a driving force in consumer behaviors over the last several years,” the paper states. “This has given new life and a new chance to companies, organizations, and individuals who are competing against national and global brands. While this demand for locally sourced products and locally owned businesses has appeal across generations, Millennials are often the primary driver as they search for all things artisan, craft, and created within a certain distance of their home.
“…It turns out the same local connection can be a key factor in influencing decisions such as where Millennials bank,” the paper continues. “In fact, the national study found that 72% of Millennials say it is important for their bank to have a strong local “connection.”
The white paper goes on to look at mobile banking, loyalty, roadblocks to reaching Millennials, and more.
The paper can be found here.