Credit unions always face a mounting battle to attract millennials, around 80 million Americans born between 1980 and 1999 whose youngest numbers are now mostly out of high-schools and living on their own, launching their careers, and started to think about their long-term financial security.
As a recent Credit Union magazine survey makes it clear that simply educating millennials on the credit unions standards is an immediate concern. According to the survey balloting more than 500 millennials were asked to describe a credit union, and 45% of them said they offer a more human and less digital experience. While 31% claimed that they are nothing more than just small banks with limited offerings. The most worst part of the survey was last 25% millennials’ response, who did not have any idea how to describe a credit union.
It is peremptory that credit unions always overcome this challenge to replace their target audience with an aged clientele base, making half of all credit union members now 53 years or over. With only 24% of millennials currently associated with a credit union, the good point is that there are a lot of ways to attract new millennial customers. There is more good news for credit unions that do overcome the educational problem; millennials value many of the services and experiences that credit unions are generally known for, including a personalised client experience, a community-based privilege, and exemplary services.
Big banks usually rate poorly when it comes to delivering some of these valued services, giving credit unions another opportunity to attract millennial customers with an exceptional experience. Considering the 2019 Digital Banking Report, where 94% of financial institutions declared themselves as unable to deliver the “personalisation promise” that customers expect.
Enough opportunity exists for credit unions to attract young generation by addressing the customer experience gap and providing personalised service that big banks can’t match. In addition to personalisation, the other major issues credit unions need to consider are privacy regulations, community, accessibility, and mobility.
Unlocking Customer Loyalty: The Power of Personalization in Financial Services
Boston Consulting Group conducted a survey, according to which 54% of customers said personalisation impacted their decision to become a loyal customer of any financial institution. Furthermore 68% responders said that personalisation influenced them to purchase more products and services from an existing financial unit.
Personalisation demands knowing everything there is to know about any customer beyond the basic information, such as financial preferences, and then providing relevant and to the point information and deals. As it concerns to the millennial population, personalisation could mean knowing how much study loan and generic debt a customer carries. If the customer is looking to buy his first home, or whether he has began to plan his retirement, personalisation requires to know it all. More so than older generations, young generation is looking for financial arrangement support; offering a customised experience such as financial plan. This could be one of the ways for a credit union to differentiate itself from the one-size-fits-all approach more likely to be found at a retail bank.
This level of personalisation requires that a credit union have a same point of view for all the customers, a constantly updated golden record that includes client data from different range of sources. An error free, comprehensive understanding of the customer and their financial situation brings together data from internal sources and systems, and across a range of external touchpoint, like mobile apps, payment networks, and social media.
Similar view for all, gives credit unions the ability to rearrange themselves around the customer to create human-centric experiences that recognize members as individuals (a “segment of one”), and reduce the typical product and channel hassle that increases flexibility to the customer experience. Benefits include the advantage of flexibility to provide product opinions at different stages of a customer journey i.e, acquisition, expansion, loyalty, and retention.
Embracing Data Privacy for Enhanced Customer Experience: A Win-Win Approach
With General Data Protection Regulation (GDPR) and California Privacy Protection Act (CCPA) putting a limelight on data privacy, the rights of customers to control how, when, and where their personally identifiable information and other customer data is used has become a raging issue for every industry.
While financial units have always prioritised the protection of customers’ core informational data to comply with federal and local regulations, new data privacy rules and regulations present credit unions with an option to reconsider the boundary safeguarding personal data, and using it with client’s permission to magnify the overall customer experience. According to a Harris Poll survey conducted by Redpoint Global, 70% of youngsters said they are willing to share their personal information in return for a more customised experience, more than GenX (59%), Baby Boomers (39%), and Senior Citizens (34%).
By acknowledging creatively to the privacy policies, credit unions can create a personalised customer experience aligning with each customer’s opt-ins and other likings with the admonition that they are transparent about how they are gathering, storing, and using their customer data. The exchange of data is a win-win for both the credit unions and the customers. The more transparent a credit union is in how the data is going to be used, and the more personalisation it offers, the more clients – particularly millennials – are willing to offer their personal data.
“Digital Banking for Millennials”
Attracting millennials by magnifying the community factor is an advantage to the hole for credit unions, lending a feeling of credibility and authenticity that national banks can never match. According to a Harris Poll study conducted by Kasasa, almost half of millennials think it is very important to do business with privately owned businesses, while more than 60% said they would definitely consider a credit union if they were to change their financial institutions.
Enclosing a millennial as a customer and community member requires conveying the online and offline life of the customer altogether into a demographic, transactional, and behavioural history. By including community-based demographics data into a united customer profile, marketing departments can increase the personalised experience with local capability, such as promoting social responsibility agendas, local drives, or other community enhancement programs. Local connection helps embrace loyalty and trust and enriches personalisation, giving credit unions an advantage over the large retail banks. With commoditised banking products, financial institutions are cleaned up in competing instead on customer experience.
According to Capgemini, only 37% of banking clients believe their financial unit understand their needs and requirements perfectly. Considering local knowledge into personalisation efforts can be such a powerful tool for credit unions to show a level of acknowledgement that big banks can’t match.
Credit Union : Omni-Channel Millennial Banking
As much as youngsters value loyalty, trust, and sense of community responsibility, one of the other effective ways a credit union can use to convince millennials to join their standards is to provide the personalised digital banking options they favour. According to the FIS Performance Against Customer Expectations study conducted in 2018, millennials rank digital self-banking service as the most important feature in their relation ship with banks – far ahead of trust and loyalty.
The Harris Poll and Kasasa study reported similar matches, with 77% of millennials demanding they will only consider financial units that comes with online banking as well as physical locations, further 65% said they’d be more willing to go to a community bank if it offered an online banking app or mobile cheque deposit feature. Digital self-banking service extends beyond online banking and includes less human contact with online and mobile services such as account opening, voice banking, bill paying, and loan formation, and to embrace business to business payments through integration with apps like Zelle and Venom.
One of the biggest challenges for all financial institutions is that many of these monetary channels did not even exist five or 10 years ago. To provide millennials with the scope of digital touchpoint they expect, demands marketers to adapt an omni-channel approach. It begins with a single customer view that includes a customer’s physical and digital involvements, requirements, behaviours, and transactions. Real-time decision making is the activation point that unlocks the power of client data, providing marketers with the ability to personalise the overall customer experience in the context and rhythm of the customer across all touchpoints. For youth, this will majorly mean engaging with them across all the digital channels they prefer, and credit unions must be prepared to deliver this option for banking and non-banking activity alike.
Credit Union Accessibility: Legal Challenges and Customer Needs
Credit unions these days, across the country are rapidly facing unfair lawsuits based on the Americans with Disabilities Act (ADA). Because these non-profit institutions are generally considered “public accommodations” under Title III of the ADA, they are banned from excluding people with disabilities, when conducting business. Many of the lawsuits claim that all the credit union websites are or have been “insufficiently accessible” to people with disabilities. As these cases move through the courts, credit unions are understandably obnoxious about the consequences.
Many credit unions provide accessibility statements, rating questions about anyone who has difficulty using or accessing any part of their website to contact them, and restating their commitment to a “positive user experience” for all members either fit or disable.
Accessibility is mainly important to attract millennials, who have a higher rate of disabilities than Boomers or Gen-Xers, with approximately 30% of working youngsters having a disability. A positive user experience may not always mean that a person with a disability should experience the same as a person without a disability, but it does mean that they should be able to achieve all of the same facilities, whether that’s a mobile cheque deposit, online balance information, or transferring funds. To create the same personalised experience and understanding for all the customers weather disable or not, a credit union must obviously first know about the improper function and make sure that it is part of the combined customer profile. Most importantly, it must contain the customer’s preferences on an individual level. Voice banking could be a preference for one with impaired hearing, while another may prefer accessibility options for setting up automatic bill pay.
Conclusion
The five points this article has outlined for how a credit union can attract millennials really all boil down to the same important statement: treat each millennial as an individual client.
FAQS
Credit unions are like community-focused banks owned by their members, not big corporations. They offer similar services but often with lower fees and better interest rates because they’re not profit-driven.
Joining a credit union is usually easy! Many have broad membership criteria, like living in a certain area or working for a specific employer. You just need to meet their requirements and open an account.
Absolutely! Most credit unions offer online and mobile banking, so you can manage your accounts anytime, anywhere. Plus, they often have apps for things like mobile deposits and budgeting tools.
Credit unions tend to be more flexible and understanding, especially for younger members. They might offer student loans, lower-interest credit cards, or first-time homebuyer programs to help you achieve your financial goals.
Yes, just like banks, credit unions are insured up to a certain amount by the National Credit Union Administration (NCUA). So your money is protected, giving you peace of mind while you grow your savings.