Millennials don’t like banks, so what are their options?
"Credit Unions are the bank for people who distrust banks." -Samantha Paxson, Chief Marketing Officer, CO-OP Financial Services
RANCHO CUCAMONGA, CA (September 22, 2015) — It’s no secret: Millennials, all 85 million of them from 18-35 years-old, are generally not too fond of banks.
A recent three-year study (known as the Millennial Disruption Index, or MDI), sponsored by Viacom Media Networks of New York, found that the U.S. banking industry is at the highest risk of disruption by Generation Y and that 71% of these Millennials “would rather go to the dentist than listen to what banks are saying.”
The MDI also states, “one in three Millennials are open to switching banks in the next 90 days.” So what’s a viable alternative?
“Millennials support brands that stand for more than the bottom line, and this is where credit unions fit beautifully,” says Samantha Paxson, chief marketing officer for CO-OP Financial Services, a Southern California-based financial technology provider to credit unions since 1981. “The financial meltdown and Great Recession simply reinforced the distrust of big banks among Gen Y. Conversely, not-for-profit credit unions stand for the same philanthropic, positive social values as Millennials.”
And, it is not just the community-based ethic that credit unions can offer Millennials – they can also compete today on the new playing field of online and mobile payments technologies.
Up to 89% of Millennials say, “The best mobile apps are the ones that make my life easier,” according to a recent Digital Dopamine global survey. Forrester Research predicts that U.S. mobile payments will reach $142 billion by 2015, nearly three times the $55 billion of today. At the same time, Rate Watch reports that 68 percent of credit union members use mobile banking more than once a week.
For years, credit unions were perceived by much of the public as secondary to banks, especially in terms of offering secure, mobile payment products. Not so anymore.
“The public is going mobile and CO-OP is providing its 3,500 member credit unions across the U.S. with product offerings that are the equal of any big bank,” she says. “Our members now have everything from a smartphone app that controls card transactions and has real-time fraud security (CardNav by CO-OP), to person-to-person payments (Sprig by CO-OP).”
Marketers across America are intent on speaking to Millennials – who constitute one-quarter of the U.S. population – so it’s a crowded conversation. Specific to financial services, the MDI study found 68% of Millennials say that the way they access their money will be totally different within five years, so credit unions are presented with a unique opportunity.
“People under 35 are less inclined to use checks, cash and debit cards and are at ease with mobile payment solutions and ecommerce, like PayPal,” says Paxson. “This should fit nicely into the product wheelhouse for credit unions. There’s a compelling, honest story to relay and Millennials are beginning to listen: not-for-profit credit unions are the bank for people who distrust banks.”
For more information on how credit unions can serve Millennials, visit http://co-opcreditunions.org/.
About CO-OP Financial Services
CO-OP Financial Services is a payments and financial technology company whose mission is ensuring the success of the credit union movement. CO-OP payments solutions, engagement services and strategic counsel help credit unions optimize member experiences to consistently provide seamless, personalized multi-channel offerings, while delivering secure, sophisticated fraud mitigation service. For more information, visit www.co-opfs.org.