By Jennifer Dimenna, SVP Enterprise Partner Management
Credit unions are increasingly challenged to attract younger generations, often losing Gen Z and millennial members to large banks and fintechs whose social media marketing and online presence virtually guarantee that they are top of mind for younger consumers. Also distressing is that 30% of Gen Z and 21% of millennials aren’t even aware they can join a credit union. Somehow, in the crowded financial marketplace, messaging about the benefits of joining a credit union is getting lost.
How can credit unions attract a greater share of younger consumers? First and foremost, you must create awareness of your brand so that Gen Z and millennials understand that membership is not only option, but a go-to choice. Seek opportunities to educate these consumers about the benefits of credit unions so that this type of institution is top of mind when these consumers are ready to establish a financial relationship. Read on for more strategies to win with this important segment.
Understanding the Current Financial Landscape
Today, 79% of Gen Z and 69% of millennials choose large banks as their primary financial institution, according to a research from Apiture and The Harris Poll. Credit unions have captured only 11% of Gen Z and 15% of millennials.
The good news is that 50% of consumers across all age groups are open to switching their current primary financial institution, with 47% of Gen Z and millennials willing to switch to a credit union. The opportunity for credit unions to expand their member base is clear.
What Do Gen Z and Millennials Look for in a Credit Union?
A first step toward engaging with younger members is to understand their unique needs. As digital natives, Gen Z and millennials have grown up using modern technology, and as such, their banking preferences differ greatly from older consumers. Instead of banking at a branch, younger generations prefer to engage with your credit union online and on mobile devices, and will often switch institutions to gain a better mobile app and online banking experience.
Gen Z and millennials are also increasingly seeking personalized experiences, like those on Amazon or Instagram, when interacting with a digital banking platform. To make inroads with younger members, your success depends on whether you can connect and engage with them throughout the banking experience. Start by incorporating the following four strategies to increase your visibility and make your credit union more appealing to younger adults.
4 Strategies to Engage with Gen Z and Millennials
- Boost Your Online and Mobile Banking Offerings: More than half of Gen Z and millennials state that branch locations are imperative, but 45% of them don’t remember the last time that they visited a physical branch. Additionally, 50% wouldn’t change where they bank if their financial institution closed all its locations. The net message? You must focus on digital channels to win these consumers. In fact, younger consumers will switch financial institutions for a better mobile and online experience. Look closely at your mobile app and website to determine if it is user-friendly and whether it has the features and functionality younger members seek. Offer in-demand options that resonate with younger members, such as financial wellness tools, budgeting and expense tracking, digital customer support, and peer-to-peer payments. An investment in modernizing your platform will help nurture lasting relationships with younger members.
- Use Targeted Marketing to Enhance Personalization Efforts: Understanding your audience is key to ensuring their loyalty. The average American today is around 38 years old. But, in the credit union market, the average member is 53, and less than 20% of members are under 40. Boost your attractiveness to younger members by using engagement tactics— such as targeted content— that appeal to Gen Z and millennials. With a robust data intelligence solution, you can glean insights from digital banking and other financial data to craft targeted marketing campaigns that match the current stage of your members’ lifecycle. This allows you to deliver members the right products at the right time, such as a car loan offer upon college graduation, a home loan after a work promotion, or college savings opportunities after the birth of a child.
- Make Digital Account Opening Effortless: Today’s young adults expect seamless online experiences. Significantly, 41% of Gen Z and 38% of Millennials think digital account opening without visiting a branch is essential. By integrating a streamlined digital account opening solution into your banking platform, you ensure that you meet younger members online—where they spend most of their time.
- Expand Your Reach with Embedded Banking: An embedded banking strategy involves placing your services within platforms frequently used by young consumers. For example, embedding your digital account opening process within a local community college’s student portal can increase your visibility and create opportunities to attract new student members. Start by exploring partnerships with software platforms, applications, or websites that cater to Gen Z and millennials and partner with your digital banking provider to transform your services into embeddable components.
Succeed With Younger Members
You can position your credit union for growth by offering younger consumers the features and experiences they prioritize. By taking proactive steps to connect with Gen Z and millennials—increasing personalization, simplifying account opening, embracing embedded banking, and evolving your digital offerings—you pave the way for future success. And, as you modernize your platform, you ensure that you remain a vital part of your younger members’ financial journey throughout their lives.
Apiture’s latest white paper, Attracting Gen Z and Millennials delivers actionable strategies for building relationships with younger members. To learn how to meet needs of consumers of all ages, schedule a demo with Apiture.
