NEW ORLEANS — Millennials are open to switching financial institutions, which is great news for credit unions — but only if they are prepared to act quickly.
That was just one of the insights from CO-OP Financial Services' Millennial Research Report released at the company's THINK Conference here.
The report, "Unlocking the Millennial Mystery," takes a look at services and products offered by credit unions with a special focus on Millennials and their decision making in selecting a financial services provider.
Among the findings: seven in 10 millennials are open to changing financial institutions, and that they plan to do all or nearly all transactions virtually. One half of those millennials, defined in the research as the 76.6-million Americans between the ages of 16 and 34, said they had switched or seriously considered switching their bank or credit union in the 12 months prior to being surveyed.
The challenge: the vast majority of the 495 millennials interviewed reported having little or no familiarity with credit unions.
That lack of familiarity, however, should not be seen as a lack of advantages, according to CO-OP EVP Caroline Willard, who stressed "our movement is in sync" with the cultural preferences of millennials about. Those preferences especially include a desire for authenticity and relevance, finding that just one in five skeptical millennials believes people to be "dependable."
"It looks like we're on the right track. The new generation values what we do," said Willard. "The credit union brand is more than just a business. But innovation is needed to attract this audience away from banks."
Video of those interviewed as part of the research was shown at the THINK meeting and featured millennials expressing a strong desire for connection and community, even if they didn't know what credit unions were. "If there was more awareness about the things that credit unions can do for me I would have made the leap faster," said one person. "I'm uninformed, but I know I'm not the only one. But if we can benefit from it, we need to know," said another.
Among other findings in the new report:
- Millennials favor companies that place an emphasis on digital services.
- CUs surpass banks among individuals who want information on planning their financial future.
- Millennials tend to use banks when scale and size will give them greater access to technnology innovation and convenience.
- Even millennials who switched to CUs in past year still believe banks have a technology advantage. For those reasons and others uncovered in the research, Willard said CO-OP is urging credit unions to focus in four areas:
- Brand promise. Does it resonate?
- Member experience: Is it frictionless?
- The business model: What can you do to stay relevant to your current base while welcoming this enormous opportunity?
- Leadership attitude and talent. How can those be cultivated?
"We align on three essential things: choice, connection and convenience. Those three words are pillars for the new generation," said Willard. "But before we do that we need to build a foundation. For millennials, everything starts with authenticity. So I think it's a necessity that we stay true to ourselves and tell our story. We are different. We are built on trust. What makes us different will attract young people."
CO-OP said it conducted the study of Millennials to better understand them as consumers of financial services. Key research objectives included 1) Defining the consumer's expectations of a financial institution; 2) Contrast those expectations with actual experiences, especially at credit unions; 3) identify the gaps between expectations and experiences; and 4) Clearly articulate what consumers want in a credit union brand.
