Fintech sees underbanked as a trillion dollar industry. Are you ready for the competition?

Credit unions are the original financial voice of the people. For decades, this revolutionary act of giving members a say in where their money goes has opened doors for many underserved communities.

With this pedigree, how is it possible that some credit unions are still losing ground to fintech companies targeting underbanked populations?

On paper, it seems crazy. Why would someone choose a new and relatively unregulated industry over one that is both federally insured and experienced in helping the underbanked? The answer is simple—savvy marketing and trend-setting technology.

If your credit union serves underbanked communities in any capacity, it is crucial to examine how your messaging and infrastructure compare to digital debt consolidation lenders and budget-focused fintech companies. Taking the right next step isn’t as simple as a bigger marketing budget. With a few simple shifts in what you choose to prioritize, your credit union can advance its reputation as a financial force for the people.

Having An App Is Not Enough

More likely than not, your credit union has a mobile app. But these platforms are not stagnant entities; they need to change at the same pace as their users.

The latest great leap forward in phones’ and tablets’ technical capabilities raises the UX standard for all apps, not just ones popular in niche industries. Consumers have higher expectations for every app’s appearance and usability—and that’s where niche fintech companies and online banks are outperforming the credit union industry as a whole.

Navigating the financial world for the first time is intimidating, and many fintech’s user-friendly platforms are a welcome sight for the underbanked. If your credit union’s digital services are lacking, people can interpret this failure as a big red flag for your brand. Is this credit union not firing on all cylinders? Or worse—are its finances too weak to have a usable app? These are real questions members could be thinking if your company relies on outdated digital platforms.

Everything from an app’s home screen to its color scheme is an opportunity to reinforce your credit union’s brand position as a trusted resource for all people, not just the underbanked. There’s a big difference between a login page that says, “Sign in” and one that exclaims, “Welcome back!” If fintech companies and online banks are thinking about these details, then your credit union needs to follow suit and go one step beyond.

Go Over The Top With OTT

When other organizations are advertising where your institution isn’t, they’re controlling the narrative. Take your power back by looking at how generations consume media differently—particularly ones that are more likely to be underbanked.

Research indicates that today’s younger adults are in poorer financial positions than previous generations. Millennials control less than 5% of all U.S. wealth. When Baby Boomers were the same age in 1989, they controlled 21%. This massive gap means that there are more underbanked young adults than many people assume.

If you want to reach underbanked populations, you need to understand how they consume media. Social media advertising can make a big impact, but that’s just one avenue to reach consumers. The average Gen Z-er spends 3.4 hours a day watching online videos. If your marketing campaigns don’t include OTT media, you’re failing to connect with consumers who need your expertise the most.

Fintech companies like Chime, Digit, and Qaptial have taken their digital expertise and translated it into how, where, and who they target. Their OTT advertisements speak directly to the anxieties and needs of underbanked Gen Z and Millennial audiences right off the bat. With this approach, they make it much harder for viewers to press the Skip Ad button. Their OTT ads also sometimes claim that fintech companies are the ideal solution to combating bloated financial institutions. Credit unions are the original big bank alternative, and it’s time to reclaim this badge of honor with strategic media planning and messaging.

You Have What They Don’t

Mimicking the marketing strategies of fintech competitors will only get you so far. Think beyond what your competitors are doing. With mobile banking, every financial institution has the chance to win over your hard-earned membership base, so don’t lose sight of what makes your brand unique.

One of the biggest differentiators between traditional credit unions and fintech companies is the power of brick-and-mortar. In a recent survey investigating consumer financial behavior, 45% of Gen Z respondents said they do not plan on opening an account with an online bank, with a majority of them citing the lack of physical branches as their main reason for holding off. This promising result comes with a catch—the survey also indicated that over 50% of Gen Z is already using an online bank or a mobile banking app. Make sure younger underbanked people know you offer the best of both worlds. Your brand is a revolution with staying power.

Fintech competition isn’t going to disappear, as many of its investors see catering to the underbanked as a trillion-dollar investment opportunity. Credit unions started as a grassroots alternative to for-profit banking, and this history resonates with people who have been shut out of the financial world for too long. Modernized marketing strategies don’t need to start from scratch to stay competitive. Knowing the strength of your established brand is half the battle. Expanding your reach ensures you stay top of mind with those that need your expertise the most.