2 minutes
What millennials really want from credit unions is more nuanced than you think.
Sponsored by FIS
According to the 2018 FIS PACE study, 50 percent of credit union members are now age 53 and older while just 24 percent of members are millennials (18-36). Credit unions clearly have a demographics problem, but FIS research shows that the catch-all of “digital banking” isn’t a magic bullet for winning over millennials.
In fact, millennials made it clear that their needs are much more nuanced and currently span four areas where credit unions should examine their capabilities:
1. Digital Self-Service
Personalized service is not a differentiator to younger consumers. In fact, millennials want to avoid human interaction, if possible. According to PACE, younger millennials (18-26) rank digital self-service as the most important attribute in their banking relationships, far ahead of trust.
It’s critical that credit unions quickly embrace the current push toward mobile 2.0 banking capabilities, such as voice banking, do-it-yourself card controls, account opening and loan origination.
2. Person-to-Person Payments
Credit unions always question whether a new banking product is what members want. Right now, 51 percent of members—that’s current members, who are primarily members of Gen X and Baby Boomers and not so-called “heavy” P2P users—regularly use outside P2P apps to split the dinner bill or pay friends.
Joining the Zelle network requires upfront investment and ongoing transactional costs, but the levels of engagement and brand affinity generated cannot be overstated. P2P payments are now table stakes for millennials and Gen X.
3. Financial Education
Compared with older generations, millennials are less confident about personal finance and investing, but eager to learn. While credit unions are renowned for providing in-person financial education to their members, they now need to take on a modern “show not tell” approach with education delivered in a variety of formats and across different forums, from social media to video logs to personal financial management tools, calculators and applications.
4. Loyalty Rewards
It’s time for credit unions to stop dismissing loyalty rewards as a superfluous expense. Recognition is extremely important to millennial consumers, but the PACE study found credit unions to be notably underperforming, with 45 percent of members reporting dissatisfaction in their credit unions’ rewards programs.
Improving member recognition—and by extension, loyalty—must be a strategic priority if credit unions are to attract younger consumers away from larger institutions.
Jim Johnson is the executive vice president of the Financial Institution Payments division within FIS, Jacksonville, Fla. He is an accomplished business executive and charismatic leader with more than 25 years in the financial technology industry.
Steve Williams, CIE, will present “Strategic Growth: What Credit Unions Can Learn from Fintech” at CEO/Executive Team Network, Nov. 5-7 in Nashville, Tenn. Williams is a principal with CUES Supplier member and strategic provider of technology and risk management services Cornerstone Advisors, Scottsdale, Ariz.
