How can credit unions leverage their strengths to be relevant to today’s Millennial consumers?
CO-OP Financial Services recently conducted an extensive survey of Millennial-aged customers about their attitudes about financial institutions. The study found that Millennials have a starkly different perspective from that of previous generations on the financial services options available to them – a perspective that demands the credit union industry stand up and take notice of how they think and feel.
Entitled “Unlocking the Millennial Mystery,” the study interviewed 495 Millennials, evenly divided between credit union members and bank customers, and screened to include only those who indicated they were willing or had recently switched primary financial institutions.
What follows are some of the key findings of the study.
Millennials’ World View
First of all, immediate gratification and transparency rule.
When it comes to instant gratification, Amazon is the darling of Millennials. Amazon has set the bar in terms of getting the consumer what they want, letting them know where the item is coming from, resolving service issues in multiple ways and delivering on expectations.
Millennials value authenticity and have built-in radar for hype. This skepticism demands honesty and transparency.
The “normal” rules for life events don’t apply – they have re-written the rules. What this means is that Millennials delay getting a “real” job (or that never happens), getting married is delayed and having kids isn’t necessarily in the context of a traditional marriage.
Millennials are Shattering Old Perceptions
Virtual banking is re-shaping the landscape for financial transactions. Among both credit union members and bank customers surveyed, 70 percent believe they’ll be doing all or the majority of their banking virtually within the next three years.
Millennials don’t hate their banks. In fact, 88 percent say they are satisfied with their banks – and 96 percent report satisfaction with their credit unions.
Banks used to fail to develop personal relationship with their regular customers. For many customers, that’s just not the case anymore. Banks seem to have read the book on how to make people feel welcome and “special” and now they are showing their “we’re your neighbor” faces. Four in 10 consumers report they view both credit unions and banks positively.
Millennials are comfortable with multiple financial service relationships. Primary financial institutions provide a functionally transactional relationship that serves a specific need. They choose a “partner” for a specific financial need and may or may not want to add depth to that relationship.
A large percentage of Millennials surveyed have a primary account with a credit union – 60 percent of them.
Here’s what we were told from respondents who had accounts at both a bank and a credit union, when asked about the relative strength of each:
|Credit Union PFI Members (who are also bank customers)||Bank PFI Customers (who are also credit union members)|
|Credit unions offer better customer service than banks (73 percent).||Banks offer a wider range of online and mobile banking tools versus smaller institutions (69 percent).|
|Credit unions tend to offer better rates (72 percent).||Large banks offer greater convenience than smaller banks and credit unions (71 percent).|
|Banks tend to charge more fees (69 percent).||I feel like my finances are safer with a big bank (47 percent).|
Strengthen Millennials’ Grasp of the Tools You Provide
To Millennial switchers, financial institutions are “tools” to help accomplish their goals. Loyalty is low, even when satisfaction is high. That means that the “tools” credit unions offer should be: 1) Effectively rolled out so your customers know you have them; 2) Differentiated (and promoted as different) so your offering is more compelling and user-centric and 3) Easy to access and manage from wherever and whenever.
Complete Study Available for Purchase on the THINK Store
Changing the way credit unions do business for the Millennial generation truly holds the promise of building a strong foundation for future growth among consumers of all ages.
To learn more about this potential, CO-OP’s “Unlocking the Millennial Mystery” Research Portfolio is available for purchase. A comprehensive multimedia package presents the full results for $299. The package includes a key findings PowerPoint, extended research findings video and a comprehensive research report (also offered separately for $199).
To order the report, write to email@example.com. To download the executive summary click here.