What do millennials really want in a financial institution?

All across America, the oldest millennials have reached their early 30s and are settling into their careers.  But credit unions and other financial institutions often miss the mark (whether angling to come off as “too cool” or, more often, using tired marketing techniques that only appeal to their Baby Boomer parents), when rolling out new offerings or services geared toward these millennials.

This is due in part to credit unions’ lack of understanding on the subject of what makes millennials tick.  Credit unions must address the uniqueness of this generation, sandwiched between the post-9/11, mobile-video-savvy Gen Z, and the older, 40-something Gen X.

The generation born between 1980 and the early 1990s is the first group of individuals to experience Internet 1.0, from the days of dial up through its evolution into broadband. As such, millennials are the first generation to have spent at least some portion of their pre-collegiate years tethered to a mobile phone.

Like their older counterparts, millennials want economic security and care about living well with as little debt as possible. And like their younger counterparts, they want 24/7 convenience, having spent most of their life using email and the Internet (many Gen Xers waited until college for this privilege!). I, for example, set up my first email account during my junior year of college and purchased my first “cell” phone when I was 22.

Considering that millennials slightly outnumber Baby Boomers (ages 51-69) 75.4 million, to 74.9 million respectively, credit unions must focus marketing efforts towards this critical generation.

Working to understand the millennial mind is key in the development of the proper approach:

  1. Millennials want to pay off ginormous student loans …Skyrocketing college costs have reached record highs, resulting in many 20- and 30-somethings graduating with thousands of dollars of debt. According to credit union think tank Filene and their 2015 Millennials Report, two-thirds of recent bachelor degree recipients carry student loans. The average student debt load for these millennials is approximately $27,000.  Just two decades ago, only about half of recent graduates had student loans and the average student debt was $15,000. For this reason, finding the simplest, quickest, and most cost efficient way to pay off debt, is a huge priority as millennials enter their peak career and child-rearing years. A small but growing number of credit unions are capitalizing on this trend by providing individuals with student loans and quickly helping them refinance their college debt.
  1. … and capitalize on their big ideas. Millennials don’t want to work for “The Man,” they want to be “The Man.” And thanks to high-speed information technology, starting a business is as easy as coming up with an idea and owning a computer. As such, millennials are seeking out creative ways to finance their big ideas, such as through online crowd-funding sites and Kickstarter campaigns. Credit unions can make themselves more attractive to 19- to 34-year-old entrepreneurs by offering a variety of low-interest, personal loans.
  1. Millennials want to digitally network. According to a March 2014 Pew Research Center report, adult millennials tend to be “detached from institutions and networked with friends.” This means they’re more likely than their parents to use financial applications such as mobile person-to-person payment solutions.  A 2015 Accenture North America study revealed millennials are key drivers as early adopters of digital payments over cash and cards. According to the report, 23% of millennials make a mobile payment to a merchant location at least weekly, compared to an overall average of 18%. Millennials and the generations that follow will be the drivers of P2P payments.  As the average age of credit union members drops, their P2P payment volume will increase.
  1. They are concerned about money. According to the American Freshman annual survey of new college students, conducted by UCLA’s Higher Education Research Institute, the number of millennials who said they considered wealth a very important attribute is higher than the number of Gen-Xers who said the same thing. This is, perhaps in part, attributable to growing economic insecurities. As noted by the White House’s Millennials report, “the oldest millennials were just 27 years old when the recession began in December 2007. … As unemployment surged from 2007 to 2009, many millennials struggled to find a place in the labor market.” On the bright side, these realities offer an opportunity for credit unions to showcase their financial advantages, from the favorable home- and auto-loan programs to the non-existence of “gotcha” minimum-balance fees.
  1. Millennials want to know what makes a credit union special. Filene Research noted that in its Google Consumer Survey, conducted December 30, 2014 through January 9, 2015, when nearly 500 millennials were asked, “why don’t you use a credit union instead of a bank?”, a whopping 34% said “I don’t know much about them.” Also, while one-third of Americans are members of a local credit union, older generations are more likely than millennials to use them (38% of Boomers, 33% Gen Xers, and 26% of millennials). Remember that many of the Boomers had a credit union associated with their jobs, so, outbound marketing wasn’t vital to member growth.  Banks have been marketing to consumers since inception however, B2C marketing is relatively new for credit unions.

With millennials expected to account for 40% of the workforce by 2020, credit unions need to focus efforts on educating millennials through digital marketing efforts, personalized outreach, and targeted advertising.  Credit Union philosophy fits well into the millennial financial picture.  The key will be getting the message of our mission to the masses.

Joe Woods

Joe Woods

Joe Woods, CUDE is a 15-year credit union veteran.  He has spent time with Corporate One FCU, Liberty Enterprises, co-founded Legacy Member Services and was part of the senior management ... Web: www.dolphindebit.com Details