Convenience. That is one of the priorities for many millennials — and many members of all generations — when choosing a financial institution.
What makes this pertinent for millennials is that it’s easy to use what you already have. And the bank accounts many young adults currently have is the one they’ve inherited from a family member.
Take me as an example. My parents opened a bank account for me when I was 7 years old, before I had any concept of banks and credit unions. But even as I learned more about my finances, I didn’t change my account. Why would I? I had no problems and changing would be more of a hassle than a benefit.
But not everybody feels the way I do.
Callahan & Associates employee Aman Johal is a 22-year-old student at George Washington University who branched out from his inherited account to start his own.
After dealing with poor customer service and in want of financial independence, the then 19-year-old Aman opened his own accounts at a financial institution separate from his parents. This independence was short lived, though. High transfer fees proved so expensive that, one year later, Aman realized maintaining a joint account with his parents was the most practical option. For now.
“Once I have more money and am not dependent on my parents, I’ll start making my own decisions based on the best rates,” he says. Today, Aman’s bank account works for him “because it’s convenient.”
But convenience isn’t reserved solely for banks.
Kirsten Haulk is a 21-year-old student at DePauw University. She is also a satisfied credit union member.
“[My credit union] hasn’t done anything to make me feel like my money is unsafe,” she says “If I thought it was, I would change. It just seems like a hassle to switch unless another option is way, way better.”
With this being the case, what can credit unions do to convince millennials that their accounts are "way, way better?"
First, promote the credit union difference. Educate even lifelong credit union members about what a credit union is and how it differs from a bank. If current members don’t understand the difference, how will my generation?
When asked the difference between a bank and credit union, 25-year-old bank customer Jordan says, “That’s a great question. I honestly don’t know.”
Neither does Sarah, a 21-year-old graduate of Marquette University and credit union member.
“When I think of a credit union, I think of something that is different from a bank,” she says. “I don’t know exactly how it’s different, but it is.”
Credit union member Kirsten adds, “Banks just hold your money and credit unions give you loans … or is that wrong?”
Second, find ways to build personal relationships. The older millennials get, the more financial challenges they confront — including student loan debt, short credit histories, and home buying — and the more they need a trusted financial partner. Many young adults I’ve talked with feel alone and unprepared for these life events. Credit unions can make financial decisions less intimidating by forming bonds early.
When I was a freshman in college, my credit union offered me a credit card to start building good credit. The credit union has provided me with the tools to be financially literate and better prepared for the future.
Sarah, the 21-year old lifelong credit union member, feels similar gratitude to her financial institution.
“The most helpful thing about my credit union is the people I’ve worked with,” she says. “For someone who has zero credit, they have always been sympathetic and been good at explaining things to me. I’ve been contacted about taking out a credit-building loan to help me take out loans for big things in the future.”
The direction credit unions provide to their members embodies the difference they make. And in the end, that is "way, way better."