I’m glad they did!
Charlie, a neobank fronting a traditional bank, launched with a brand focused on the senior demographic, initially offers only a few “tweaked” banking services to better serve this traditional market segment.
When taking notice, the folks at GonzoBanker identified the services offered as resembling “plenty of others” but also adding a few unique features.
“At first glance, the account resembles plenty of others – free ATM access at thousands of locations, no monthly fees and no minimum account balances. But it’s not a cut-paste job by the startup. Two things pop: Charlie lets customers receive their Social Security checks up to four weeks early without paying fees or interest, and the startup – which partners with Sutton Bank – offers phone support. In neobank land, that’s compelling. Moreover, it also pays 3% earnings on average monthly balances.”
The GonzoBankers also recognized both the market challenges for neobanks and the branding hurdle when targeting seniors, who are likely long-time account holders at traditional banks and credit unions — “Bonus complication: Any brand would struggle to win over the trust of an audience that may have used the same account for decades.”
While Charlie may be the first neobank with the 62+ demographic as its primary focus, my question is not about Charlie’s “likelihood of success” but, rather, about credit unions’ ability to see and seize the opportunity illustrated by this new entrant?
I’ve recently thought and written about the “out in plain sight” opportunity to better serve our senior members AND to benefit from that improved relationship to grow membership in the other age demographics.
Last October, I shared thoughts on our undervalued senior members, our opportunities to serve them, and their need to serve their younger relatives. I concluded with the idea that our helping them will also help our credit unions in important, currently untapped, ways.
“When it comes to your senior members, they have ‘needs’, they have ‘resources’ and, important to your future growth, they have ‘influence.’ I recently wrote for CUInsight about the “gold” to be found by helping members who are in their “golden years.”
Your senior members, as noted by the GonzoBankers, have been banking with you for many years, though there are more out there whom you have not yet reached. You may have already provided lightly “tweaked” products and services to them. You may have even created a newsletter or a few blog entries focused on their demographic’s needs. But we all need to do more if we are to serve these members fully AND capture the opportunities that improved service offerings can open up to us.
As I wrote last year, in Try promoting the CU of Grandma and Grandpa, “senior members have both traditional and evolving financial needs. As I enter this demographic, I am coming to understand both the concerns that come with the move to retirement and the need for different financial advice and services from my financial service providers; but I’m also reminded that my affinity for credit unions is strong, and I continue promoting them to my family and friends. I suspect I’m not alone. And it’s this circumstance that presents opportunity to your credit union to grow, and to grow younger. It’s an opportunity in which credit unions are uniquely qualified to mine. The “gold” to be mined in your well-built relationships with your senior members’ is found in their role as grandparents funding and shepherding the early years and the early ‘financial teaching’ years of their grandchildren, your future members.”
The GonzoBankers concluded that the market and branding challenges for Charlie are large, and surmised that success may be hard to earn, but I want to close by saying something different.
The response to this market opportunity is not simply to “glam up” your digital services (to make them more appropriate and appealing to this segment), nor is the best response to further productize your offerings (add senior segment card benefits, for instance).
The better response to this opportunity to serve the evolving needs of your senior members is to rethink your role in serving them. Is it your role simply to offer product tweaks to traditional banking services? Or is it your role to provide banking services that promote the financial well-being of your members, including seniors?
If you chose the latter role, doing what the neobank Charlie is doing is not the answer for your credit union. Your answer will be found in broadening your focus to serve the information needs, financial needs, lifestyle and life phase needs of your members. Create an ecosystem, in essence, that serves their journey and all who they influence throughout their journey.
Want to learn more? Please read the previous articles on serving your senior members and fulfilling their needs. And please consider the notion that credit unions, collectively, could turn their well-earned brand success into a golden opportunity.
So, should we simply take note of what Charlie is doing, or should we say “Sorry, Charlie. We’ve got this.”