Most credit unions understand that growth in the future will come from the Millennial population segment. But what surprises many is that these young folks are remarkably uninformed about the differences between credit unions and banks. In a recent survey, 71% of people between the ages of 18 and 34 admit they do not know what a credit union is. That may be an alarming metric to some, but it should equate to abundant opportunity for all.
The spending power, high level of dexterity with technology, need for financial services and love for all things local with Millennials paints a compelling case for credit unions to build growth strategies aimed at capturing the attention of this demographic that includes 80 million people.
When building their strategies to attract and engage the next generation of members, credit unions will do well to leverage the SMAC model: Social, Mobile, Analytics and Cards.
Consider these eye-opening data points about Millennials:
68% get their news from social media; 47% have written a review about a product online; 74% share information on brands they like, 54% on brands they don’t.
90% have a mobile phone; 77% have a smart phone; 73% depend on mobile devices while shopping; 53% would rather give up their sense of smell than their phone.
They now spend $600 billion per year; by 2020 they will be spending $1.4 trillion per year and account for 47% of the entire workforce.
60% have debt from credit cards and student, automobile and mortgage loans; 80% have at least one debit card.
Social Media is widely available and arguably the lowest-cost model for reaching consumers, especially the Millennials who live in that channel. Credit unions can think of it as virtually free capacity. However, the tools and technology to reach them still require investment and a great deal of expertise. PSCU’s Make Your Money Matter social media platform is a resource credit unions can leverage to reach — and teach — Millennials about the benefits of joining a credit union.
Mobile devices and data allow consumers to research products, discuss purchases with friends and then make those purchases whether they are at home or on the move. The shift to digital solutions presents the opportunity for credit unions to engage and serve members in fresh, interesting and more convenient ways. And enabling mobile channels with the full functionality to allow members to access and transact remotely is not an option, it is a necessity. Mobile service applications appeal so strongly to today’s consumers who value speed and convenience in their financial services interactions that maintaining a relationship without mobile enablement becomes virtually impossible.
Analytics exposes meaningful and actionable insights, which could otherwise go unnoticed without the means to access and apply the learning. The new generation will not be reached by credit unions without the capability to get the right message to them where they live — in the Digital World. The end game for credit unions exploring the power of analytics is to provide the right channel for the right member at the right time with the right offer to meet their needs.
And we cannot overstate the value of Cards. Without meaningful payments programs, credit unions will not be able to function as a pivotal point of relevance for your existing membership or for the generation to come. The new consumer will gravitate to the institution that gives them the best access to their deposits and credit devices. Owning the payment vehicles that provide the preferred access for members is the lynchpin for the future.
Every smartphone and tablet is a potential new branch for the credit union, an “always on” channel that gives consumers the services when and where they need them. Banks are ripe for disruption and the Millennial generation is uniquely equipped with the attitude and the technology to be the force for that disruption. And though they may not be fully aware of it now, they have an ally in credit unions, which embody the same core values Millennials are looking for — strong ties to the local community, a high trust factor, and attentive service.
Credit unions have the right products and services for Millennials. Now it’s time to talk SMAC to create the awareness to differentiate from banks — and them know what they’ve been missing!