The millennial challenge for credit unions
The long-term sustainability of credit unions today depends on understanding and connecting with millennials — a massive, influential demographic with birth years ranging from the early 1980s to the early 1990s. This group grew up connected to the Internet, social platforms, and smart devices, which can be a challenge for credit unions because historically they have always been known more for their customer service skills than for their technical innovation. According to Filene Research Institute, household ages 45-54 are most likely to be primarily credit union users. Because of this, credit unions will face a greater struggle targeting these new consumers, who will not only want the standard good customer service and personal attention, but will also seek services and loan offers in multi-channels, modern platforms, and easy-to-use applications.
Before credit unions can reach millennials effectively, they must understand them. Like most demographic groups, millennials have their differences and their own unique challenges facing them. For example, millennials in emerging markets generally expect to be both financially (71 percent) and emotionally (62 percent) better off than their parents. Furthermore, millennials have entirely different life goals, and they’re more comfortable with straight-talking language from both business and political leaders. Credit unions in turn will have to respond with the kinds of products needed to satisfy them.
One big difference for millennials is that this generation has the greatest levels of student debt in the country’s history and it’s rising. This not only affects the amount of savings millennials have for purchases and down payments, it also greatly impacts their credit scores and potential for obtaining loans that are good for them and the financial institution that loans them money. An individual’s credit score has so increased in importance over the last decade that many millennials affected by student debt are looking for methods to improve their credit standing in order to get reasonable loans while paying off their school loans. According to the Project on Student Debt, 68% of 2015 bachelor’s degree recipients graduated with student loan debt, with the average of $30,100 per borrower. The need to help millennials improve their credit score, increase their credit financial acuity, and also pay down their student debt with reasonable loans is an opportunity that credit unions could use to reach out to millennials.
Ser Tech can help credit unions with millennials. They provide Flitter, which allows credit unions to provide real FICO® scores (the credit scores actually used by lenders) to their members, as well as offer in-depth credit education. Both of these combined can help millennials raise their credit awareness and credit score. Also, Ser Tech has recently launched a new Student Loan marketing campaign. This program can bring in members who are in need of acquiring refinancing for a current school debt. If a millennial has a need to improve their credit standing by acquiring a credit card, Ser Tech’s Credit Card Acquisition marketing program can attract creditworthy members based on the credit union’s lending parameters.
Most credit unions have been aware for the past few years that connecting with the powerhouse millennial generation is critical to the future of the industry. That time has arrived; credit unions should be providing these services now in order to compete and stay relevant in the future. Ser Tech can help.
