MADISON, Wis.-Credit unions planning to expand into or do a better job of retaining the young consumer market in 2009 can leverage a new study to better understand what drives this market's behavior.
The study from the Filene Research Institute report, "Attracting Young Adults: What Do We Know About Their Use of Financial Institutions and Payment Behaviors?," examines the financial behaviors of young adults and compares these behaviors to all households. Author Jinkook Lee, a professor of consumer sciences at Ohio State University and a Filene Research Fellow, utilized the Consumer Finance Monthly, a nationally representative sample of U.S. households from a monthly survey conducted by OSU, to conduct the research.
According to Lee, young adult households frequent credit unions at roughly the same levels as do all U.S. households. Still, credit unions lag behind commercial banks by a factor of three to one, he found. Young adults rank convenience, product features, and service in that order as the top reasons for choosing their primary financial institution.
The research also finds that young adults use a variety of payment instruments to manage their funds.
Which type of instrument an individual uses depends upon the type of transaction and the socio-demographic characteristics of the payer.
George Hofheimer, Filene's Chief Research Officer, is proposing three practical activities through which credit unions can effectively reach out to the 18- to 34-year-old market.
Reaching Out To Young Adults
* When describing your value proposition to a young adult market, study the top reasons this segment chooses their primary financial institution.
* Understand what elements of convenience matter most to young adults.
* Use data on specific payment choices to understand how young consumers are creating their financial relationship.
For info: 608-231-8550 or www.filene.org.
