Credit unions may recognize that young adults are vital to their future, but few have done effective jobs at capturing the market, according to a new Filene Research Institute report.
Suggesting that "credit unions in general have not recognized and taken advantage of this tremendous market opportunity," the Filene Research Institute brought together research experts and credit union practitioners in a workshop designed to develop workable strategies to attract consumers in the Under-30 age group.
The discussions centered on the size and scope of the market; research findings from a variety of sources; demographic and lifestyle characteristics of potential young-adult members; and financial product use by this age group. Participants then assembled a number of methods through which credit unions can reach out to younger consumers, and capture their business now and in the future. Details of those discussions are presented in a new Filene report, "Attracting and Retaining Young Adult Members."
"Younger age groups have relatively small representation among credit union membership," Filene stated. "Credit unions invest surprisingly small amounts in marketing to younger age groups. On average, only $4,000 is devoted to youth programs, and even credit unions over $100 million in assets spend only $10,500 per year on these programs. Without the borrowing power of younger members, the average credit union stands to lose an estimated $14 million in loans over the next 10 years."
What's Being Recommended
According to Filene, participants at its workshop offered a number of strategies credit unions can undertake to maximize their penetration of the young-adult market and ensure continued relationship-building with them. Among their recommendations:
* Credit union boards must make a commitment to invest resources, staff and dollars in serving the under-30 market as a part of the credit union's strategic plan.
* Management should develop tracking systems to monitor progress toward attracting and retaining younger members.
* Products and services developed to attract members at an early age should be viewed as a means for establishing lifetime relationships with members.
* Parents and grandparents should be encouraged to participate in programs that will build the financial future of their children and grandchildren.
* Credit unions should increase their member education outreach programs as a method of creating interest in the credit union.
"This workshop gives us a number of important tools with which to expand and intensify our efforts to capture the next generation of credit union members," said Bob Hoel, Executive Director, Filene Research Institute. "Organizations destined to succeed over the long term have this characteristic in common: they pay close attention to who their customers and members will be not just next month or next year, but in the next decade, and in decades beyond. The implication for credit unions is clear. To succeed in the long term, they must provide products and services that are meaningful to young-adult members, those in the under-30 age group."