Credit unions that deliver on Gen Y’s desire for efficiency, brand connection and altruism will have an edge in mortgage lending, advised Ben Rogers, research director for the Filene Research Institute, during a breakout session at ACUMA’s Fall 2012 conference in Las Vegas yesterday.
Credit unions that want to land Gen Y’s mortgages and banking business need to be aware that they think differently than older generations and look for different values in a financial institution. For example, when it comes to customer service, a Gen Y member want to interact with someone who will meet their needs quickly, whereas older generations view friendliness as the key to stellar service, Rogers says.
And while Gen Y does value face-to-face interaction, younger members take full advantage of online banking channels. Credit unions may not have as large a branch network as larger institutions, Rogers says, but credit unions can certainly ramp up their online and mobile capabilities to compete virtually.
New mobile apps like Simple, which funnels banking through an iPhone, and Cardify, which tailors reward programs for regular shoppers at participating stores, are exactly the type of technology that Gen Y picks up quickly. Rogers pointed to personal finance manager Mint, which simplifies your spending, as another example of a tool Gen Y uses in their financial lives. Credit unions can take these PFMs to another level by integrating sales pitches, like mortgage rate alerts.
Credit unions can adapt similar app programs and stay ahead on upcoming technology trends like augmented reality, which helps users see their world virtually. First Tech Federal Credit Union ($5.5B, Palo Alto, CA) is among several financial institutions that already employs the technology to help users find ATMs.
In mortgage lending, credit unions could adapt augmented reality tools to help Gen Y borrowers find a home to buy by providing property information for homes in their view. In Australia, Commonwealth Bank is already using augmented reality to help house hunters that way.
Finally, while Gen Y does love technology and efficiency, Rogers says this generation likes to be connected to brands, especially brands that have a lend-a-helping-hand reputation. So credit unions that develop their identities and then underscore their mission in the community will be a bit closer to winning over younger members.