Millennials are such a vital generation for financial service providers to address, not only because many of them are now coming into sizable personal income and surpluses through jobs and inheritance, but millennials are distinctive in their fluent use of technology and their outlook on finances, economy, family life and careers.
This is the start-up generation that is making a living out of entrepreneurship that can be deeply- personal, ventures such as ad- and donation-funded YouTube video channels, blogging, ‘Instagramming’, creating and playing computer games, inventing new drinks in a makeshift home brewery or using urban art for social and political activism.
Credit Unions have been traditionally less-visible and less-known than big national banks, not because they offer less-advantageous banking services but mostly because they are limited by their membership (members of a community or employees of the same company) and by their low marketing budget.
Quite often you drive on the highway and see billboards displaying a variety of ads, including some for services of commercial banks. It may be no surprise, then, that when you want to open an account, you immediately think of these banks. While older generations might be more aware of smaller financial institutions, younger people seem to prefer convenient and ostentatious banks. Or do they?
Are they making an informed personal choice or one that stems from innocent ignorance of available options? Do credit unions really not have what young people want, or are they just not focusing their sales and marketing on what is actually a very natural fit?
Examining the values of younger generations, including millennials uncovers several shortcomings inherent to credit unions, but also reveals solutions for attracting new deposits and business.
Each generation is not always easy to understand by those outside it, but they have some defining characteristics. Millennials are considered to be individuals born between roughly 1980 and 1997.
Some general observations on their behavior and values were synthesized into 10 characteristics by this Indeed article. By considering those, we can clearly see where credit unions need to step it up, if they are going to attract the attention of the millennial generation which is already making bold financial decisions and lifestyle choices that lock in their commitments, personal connections, and their growing balances with financial service providers.
They value meaningful motivation, are free-thinking and creative.
This generation is greatly inspired by personal success stories. While seeking career advancement and ways to be recognized in the workplace, millennials are also interested in the personal touch. They value ideas of substance, personal growth, and non-traditional out-of-the-box achievements. They’d most likely be attracted to a credit union with an interesting history or one which shows unique initiatives that surprise but offer a meaningful connection with its members and the community.
Millennials challenge the hierarchy status-quo while placing importance on relationships with superiors and valuing social interactions in the workplace.
They are more interested in having fruitful and productive relationships even if it means breaking the norm rather than abiding by established rules which are safe but hinder their development and progress. Their attitude stems from confidence, ample education and a disillusionment with the society their parents helped create. They will not overhaul something just for the sake of it but will seek constructive means to make things better in a way that includes their own mentality.
Since they seem to be openly receptive to feedback and recognition, they will appreciate a supportive team-like environment, whether it’s at work or in the businesses they collaborate with.
Any policies, financial services or customer relationship strategies are worth exploring that can tackle these aspects of their behavior by tapping into the need for connection but also a rebellious streak that is still “chill” and kind. Credit unions need to come up with measures that change things that are not working and that adopt innovative techniques to deal with different financial problems and sore spots such as loans for housing, transportation, start-ups, and even offering financial education to protect millennials and their families from bad decisions.
With an intuitive knowledge of technology and constant exposure to rapidly evolving software and apps, millennials are open and adaptive to change.
They will seek out and adopt the services and products that fulfill their needs. There is an opportunity here for credit unions to figure out what needs these are and adjust their range of services. The first step, however, is to truly step into the 21st century in terms of technology. It may not be possible for credit unions to have ATMs everywhere, but given the digital behavior of this generation, having easy-to-use, highly-performing apps can offset this disadvantage. Many prefer to manage their investments, checking and savings accounts, all through mobile apps. Millennials want secure banking on-the-go in an attractive and easy user experience with motivating messages and indicators that nudge their personal finances in the right direction.
This generation places importance on tasks rather than time.
This may be true in the work environment but as far as their financial behavior, millennials are always looking for quick answers and solutions to their questions and problems. That is not to say that they’re superficial. They have a passion for learning and are definitely more inclined to be financially savvy than the previous generation. They are more informed about and more concerned with saving money, debts of any kind, budgeting and overspending, investments and money-making side-hustles.
A financial institution that doesn’t just treat them as a number in a ledger but makes them feel trust in their capacity to offer solutions and honest advice will likely earn not just their business but their loyalty, too.
A few other things that credit unions can do is look at this generation’s lifestyle choices and find a niche to expand their offerings of financial services. Since millennials are postponing the start of their family but are eager to adopt pets, can a credit union offer a package that includes pet insurance? Are there any rewards for the customer if they visit a doctor that the credit union recommended from its community, even from its pool of members? Are there opportunities for investment and retirement accounts? What kind of marketing campaign can a credit union develop to take advantage of geographical and economic diversification? Is there a way to acknowledge some of the behaviors and beliefs many millennials have exhibited such as anti-corporatism, joining cooperatives like urban gardens in their neighborhoods, shopping at farmers markets and supporting small producers’ associations, boutique grocery stores and eco-living communities?
Becoming millennial-friendly doesn’t necessarily mean completely-overhauling the way credit unions do their core business but rather adapting to the needs of potential customers by rethinking the outward-facing layers that customers experience directly to better market and facilitate what credit unions already do best. As not-for-profit financial institutions, credit unions benefit from a good reputation supported by their resilience through economic crises, but the old-fashioned, traditional way of doing business is a detriment to further development and survival. Still, retro is cool, so old-fashioned can also be hip.
By starting to understand and service the millennial customers of today, credit unions can stay relevant, show their value, and broaden their reach to new customers now and into the coming future.