The credit union industry today is undergoing unprecedented transformation, as both the behaviors of existing members and the demographics of prospective members shift. Baby boomers are retiring, beginning to draw down on their investments, and preparing to pass their wealth on to their children.
At the same time, Generation X and millennials are quickly becoming the core member base, with Generation Z nipping at their heels. These younger generations are digital natives and do-it-yourselfers, with less loyalty to any particular financial institution than their predecessors.
In the face of these changes, credit unions can’t rely on the status quo any more. They have to get creative to meet the needs of their diverse member base and their wildly divergent needs, preferences, and expectations.
How to overcome this challenge? The answer lies in the smart application of the member data you’ve already collected, along with a bit of know-how about each generation’s wants, needs and preferences. Here are a few inspiring ways to make it work:
Millennials and upcoming Generation Z are having an increased influence on the credit union industry, with their expectations for speedy, personal, omnichannel services. To respond to their demands, which are different from those of previous generations, you’ll need to do a few key things.
Build a digital sales and service model
Well educated and tech savvy, these younger members expect easy access to exceptional tools online and on mobile devices. From account opening to loan origination, if they can’t initiate their requests online 24/7, you may lose their business. Thankfully the digitization projects that are necessary to serve these members will also offer dividends elsewhere. In fact, a digital model will help you serve all member demographics more efficiently and cost-effectively.
Assist with managing debt
38% of mass affluent millennials (household liquid assets from 250k-1 million dollars) are still paying off their student loans, which gives credit unions a great opportunity to develop deeper relationships with them. Consider offering them creative ways to manage debt, and don’t be afraid to try strategies like gamification to make paying down debt more interesting.
Mid Career Members
For Generation X, the financial landscape is becoming more complex. Many of these members are approaching their peak earning years. But they are also juggling multiple financial priorities and have little time to interact. To assist them, consider the following:
Anticipate Lending Needs
Generation X, like younger generations, is willing to consider non-traditional lenders for mortgages, HELOCs and even auto loans. Faced with this increased competition, you’ll need to get your offers in front of them sooner if you want to be their lender of choice. By using your business analytics tool to scan member data for recurring payments, you’ll be able to determine when these loans are likely to come up for renewal. Then it’s simply a matter of extending the member an enticing offer before they even start looking into renewals.
Offer Financial Coaching
Generation X members are saving for their kids’ education, contributing to retirement accounts, holding credit card debt, and trying to figure out investing as well. Offering financial coaching is an easy way for any credit union to build loyalty and trust with these busy individuals. Remember, though, they may not be able to get to a branch during regular hours, so financial literacy emails, webinars, and visits from mobile service representatives may all be a piece of the puzzle.
Retirement looks different now than ever before. The boomers are an affluent bunch, and they have years of post-retirement living to plan for. Here’s how your credit union can retain these senior members through the provision of timely, relevant services:
Consolidate Data to Serve Better
Older members often have years of history with your credit union. So, are you treating their requests with the respect they deserve? Can you offer them advice based on an understanding of the context of their broader financial ecosystem or “household”? Getting all your data into one place, and making sure your staff can review it quickly to get a holistic view of the member, is step one.
Use Your Branches Effectively
In-branch interactions are still a critical part of this generation’s banking experience, but they can still benefit from digitization, just like younger generations. Taking a data-driven approach to running your branch can can ensure that your MSRs are equipped to handle anything that comes their way, and even empower reps to get out from behind desks and interact more personally in redesigned, paper free branches.
Plus, if you track member interactions through CRM you can optimize staffing levels and reduce wait times. Reducing wait times is a simple way to boost satisfaction for the 63% of members who currently wait longer than five minutes for service at their credit unions.
Growth = Technology + Commitment
Meeting generational needs at your credit union requires the right technology. But just purchasing technology won’t help your credit union dig into the needs of these unique groups. Indeed,taking a generational approach to member experience also requires internal work and expert support.
Once you have the right technology in place to support member engagement across all your channels, focus on making sure your credit union is using the technology effectively to collaborate across departments, and adoption is high. You’ll quickly see results including increased loyalty and wallet share if CU staff are in it together to support your data-driven approach to developing lifetime relationships with members.