Millennials have surpassed baby boomers and now account for roughly 80 million people in the US. More importantly, millennials have massive buying power, spending roughly $60 billion per year, which is projected to reach $1.4 trillion by 2020, and will comprise 75% of the global workforce by 2025.
In contrast, the average age of credit union members in the US is 47 years old, and only 32% of millennials compared to 50% of baby boomers are credit union members. This underscores the need for credit unions and CUSOs to expand their efforts to reach a younger generation in anticipation of future demand and trends.
Here are five strategies that credit unions and CUSOs can implement to attract millennials and reverse the declining age trend among members:
- Adopt More Mobile Accessibility and Online Offerings: Millennials want convenience, practicality, and ease of use. They like to do things on the go, with as little effort as possible. In fact, roughly 45% of Millennials say they only use their phones for all banking-related transactions and are 2-3 times more likely to want mobile apps to manage their accounts. Digital channels provided by credit unions should be user-friendly, easy to navigate, able to sync with other apps and offline channels. Credit unions that lack some of the in-house capability to develop this type of technology can explore partnerships with CUSOs, technology vendors and FinTech providers.
- Meet Their Payment Expectations: Millennials engage more in making payments than in any other type of financial service. They are avid users of e-commerce systems and mobile P2P payment solutions (PayPal, Venmo, Google Wallet, Apple Pay). Offering mobile payment solutions that are compatible and user-friendly is key to targeting this generation.
- Provide Support for Life’s Changes: Millennials undergo many life transitions in a short timeframe. These include pursuing an education, starting careers, getting married, buying a home, having children, and planning for retirement. Credit unions can make borrowing easy and accessible for millennials and provide them financial education and guidance through social media and other online platforms without charging the high fees financial advisers do.
- Improve Member Experience: Experiences matter more than products to millennials. 71% of millennials say they would prefer to go to the dentist than listen to advice from banks. Credit unions should focus on creating a culture that attracts millennials by making everything easy and straightforward (i.e. change customer service avenues from traditional phone call to online chat or social media).
- Foster a Collaborative Approach: Fostering innovative, “out of the box” solutions is essential to achieving success in with millennials. To promote new ideas, organizations need to create collaborative channels of communication across and within their organizations. To do so, credit unions can start including millennials in the development of products and services by getting them on credit unions boards and including them in new product development and decision-making processes. Bottomline, millennials want to work for organizations that foster innovative thinking, while developing their own skills as leaders.
As a large generation with increasing buying power, millennials present a significant opportunity for credit unions. By understanding their needs, wants, and desires, credit unions can attract and retain millennial members long-term.