Opportunities to attract and retain Gen Y members have been on nearly every credit union’s radar screen for the past several years. Some credit unions have introduced new types of products – including private student loans like those offered through the Credit Union Student Choice program. Others have created specialized student packages or re-worked marketing materials to better connect with a younger audience. How might school-specific branding help credit unions enhance Gen Y outreach efforts and attract a steady flow of younger members?
A student or campus-focused identity can make a real difference. Four years ago, West Community Credit Union ($122.8M, O'Fallon, MO) and the student-run Missouri Student Federal Credit Union merged, but West Community made a strategic decision let the student-run credit union retain a separate identity. MSFCU, then, became Tigers Credit Union and continued its relationship with the students and faculty at the University of Missouri, Columbia (MU).
MSFCU’s long history was rooted in the philosophy of “students helping students.” Founded in 1984 by a group of students and professors, it was one of a handful of student-run credit unions in the United States. The students were proud of their credit union, but in the late ’90s, technological advances began to change the financial services environment. Students entering the University wanted convenient electronic services such as online account access, bill pay, debit cards, and credit cards. Alumni were looking for competitive rates on home equity products and mortgages. Unfortunately, MSFCU could not afford the technology to offer these services and lacked the experience and manpower to manage them. It also lacked an effective marketing budget and expertise to compete successfully.
While MSFCU was facing challenges in its market, in O’Fallon, West Community Credit Union was trying to better understand and serve Generation Y. West Community chief financial officer Jason Peach had worked at MSFCU as an undergraduate at MU. Through the years, Peach maintained contact with MSFCU President Christos Cossyphas and knew the credit union was struggling to stay competitive and grow. Peach saw the situation as a win-win opportunity for both credit unions.
“Part of the challenge we had was determining how to encourage younger generations to join our credit union,” Peach said in a 2007 interview for CUSP. “MSFCU seemed like a great place to start. And, because they needed services we could provide, it seemed like a perfect fit.”
After several conversations between the credit unions, it became clear a partnership could be a positive prospect. Of utmost importance to both Cossyphas and the managers at West Community was maintaining the student-focused foundation upon which MSFCU was built. Both sides wanted the credit union to retain its educational mission and operate with student volunteers. It was also important MSFCU remain independent and autonomous.
Four years later, West Community is wiser and knows firsthand about the operational challenges in managing multiple identities – from developing different procedures to producing multiple versions of materials. Despite those challenges, West Community Credit Union and Tigers Credit Union are growing and making a positive difference within each of their different communities. (Download the PDF of the first quarter 2007 CUSP article and read more about the initial merger decision.)