That "boom" you're hearing at credit unions around the
country is the sound of savings accounts being locked by an aging
membership. But credit unions are responding by reaching out and
opening the door to Generation Y.
As they approach retirement, spending and lending needs are changing
for baby boomers - individuals born between 1946 and 1964. Many
of the baby boomers are no longer in the prime borrowing period
of their lives. Instead they are devoting more of their financial
resources to savings. Today, the average credit union member is
around 44 years old.
In steps Generation Y - those born between approximately 1980 and
1995. At an estimated 71 million Americans, this generation outnumbers
the previous generation by at least 25 to 30 million and, importantly,
is in earning (and spending) mode. Generation Y appears undeterred
by the recent economic downturn, spending nearly $172 billion last
year alone. Consequently, every industry from automakers to clothing
designers is courting the group, hoping to build lifelong loyalty.
Credit unions have jumped on the bandwagon. Realizing that future
vitality lies in the hands of future members - today's youth - credit
unions are developing programs to teach children and teenagers to
Nearing 10 years of age, even the youngest members of Generation
Y have probably started a kiddy savings account. Credit unions are
focused on maintaining these relationships and growing accounts
by offering kids club events, newsletters or Web pages. Some go
as far as offering prizes for meeting savings goals.
Teenagers - who make up the majority of Generation Y - are enthusiastic
about summer jobs and financial freedom from their first paychecks.
Research indicates that most do not want to keep large sums of money
in their pockets, preferring, rather, to deposit money into an account
where they can access it regularly. Credit cards for this age group
are common: 33 percent of high school seniors and 78 percent of
college students have at least one.
Money management is becoming a key concern for young adults and
their parents. Successfully reaching out to this age group can involve
partnerships with local educational institutions or in house seminars
about financial organization that can provide a lifetime of benefit:
budgeting, investing and using credit.
The oldest members of Generation Y recently entered the adult world
- struggling to balance their checkbooks, pay rent and learn the
ropes on their first "real" job. For many, these first
few years on their own will include their first major financial
transactions; for instance, the purchase of an automobile - a key
moment for credit unions.
This is when the years of credit union kiddy accounts, teen finance
classes and other relationship building tactics pay off, putting
credit unions in the driver's seat for the loan.
Regardless of the strength of the customer bond, credit unions
still have to overcome zero percent financing, slick dealership
F&I officers and other outside pressures. To help win the auto
loan - and potentially other future financial accounts for these
20-somethings - more and more credit unions are steering buyers
to Enterprise Car Sales, which guarantees the credit union receives
100 percent of used car loans 100 percent of the time. An added
bonus for reaching this internet savvy generation is the Enterprise
Car Sales web site linked to partner credit unions nationwide offering
an easy online car shopping experience.
Enterprise Car Sales, a division of Enterprise Rent-A-Car, helps
credit unions increase their loan portfolio and optimize member
loyalty by creating tailored used car buying/loan programs. These
include special car sales, free car buying seminars, and membership
communications, among other value-added services designed to enhance
lifelong membership relationships.
From kiddy accounts to automobile loans and beyond, credit unions
are sending a clear message "why" credit unions can be
a lifelong partner for Generation Y.