In this week’s edition of “Millennials: What Are We Ruining Now?” – credit unions.
According to a recent study out of FICO, credit unions lose “primary status” among the Millennial generation (commonly identified as those born between 1980 and 2000) as they age. Twenty percent of 18- to 24-year-olds identified a credit union as their primary financial institution, while just 10 percent of those aged 25 to 34 said the same.
Hope is not lost, though: FICO also found that that older cohort of that generation was two to three times more likely to close all accounts with their primary financial institution, presenting a potential opportunity for credit unions to capture some of that business.
Younger Millennials were attracted to credit unions for their low and transparent fees and better interest rates, FICO said.
“Credit unions should market attractive rates and low fees to existing and potential members, given how highly it rates in their consideration process,” Joshua Schnoll, a senior director at FICO, said in a press release announcing the study. “In addition, credit unions can more intelligently manage debit and credit accounts by leveraging transactional data and behavioral patterns to help prevent attrition. This will enable them to make the best pricing cross-sell offers or fee waivers for each customer.”
But FICO’s survey also revealed a potential weak spot: only 42 percent of credit union members say they used their institution’s mobile app, compared with 64 percent of customers at large national banks.
Mobile banking has been table stakes for some time now,; we all know that. But as much as credit unions like to tout low fees and better interest rates, those alone may not be quite enough to lure older Millennials if their mobile banking experience is less than optimal. I die a little inside whenever I type out the words “customer experience,” but it’s true. I may be a Millennial, but I’m no longer drowning in student loans or pinching every penny and if your mobile app sucks, that’s probably going to put me off as a customer and/or member.
As far as personal finance apps go, Mint is a personal favorite because I can look at my bank accounts, credit cards, student loan and retirement savings (across no fewer than four financial institutions) all on one screen. My FI’s mobile app is also pretty slick and includes a feature that allows me to track goals, including student loan repayment. (If you don’t offer this, you should strongly consider it.) Digit is another favorite as an “out of sight, out of mind” approach to saving for fun stuff, like vacations or a wardrobe upgrade.
And finally, my FI occasionally sends me helpful advice about managing my finances – usually in the form of an email newsletter highlighting some tips for retirement saving or paying down debt. Sure, it’s content marketing, but at least it’s useful and relevant content.
Credit unions – or for that matter, any FI that’s thinking about how to better capture the Millennial market – should think about how they can help those younger customers better manage their financial lives. We need all the help we can get. After all, it’s exhausting ruining everything all the time.