WASHINGTON-The surge of membership resulting from Bank Transfer Day is good news overall, but it has not done much to lower the overall age of members.
But it isn't that credit unions are doing something wrong; rather, it's the result of broader demographic patterns. That fact that members are getting older remains very much a "reality, not a myth," noted Jon Haller, CUNA's director of corporate and market research.
"Over a 25-year period the age continues to go up," Haller reported, pointing to data from the trade group's National Member Survey studies. "We also found the number of 'Peak Borrowers,' members age 18-to-24, has remained fairly constant. This group accounts for 7% to 10% of adult credit union numbers."
The "overriding fact" is the entire United States population is getting older, Haller continued. He said the Baby Boomer generation is aging, and there are not as many younger people to "take up the slack."
"Based on the numbers it appears this trend will continue through at least 2015," he said. "This is something impacting all financial institutions. The important factor is the ability of financial institutions to attract younger members, and it looks as if banks are doing a better job of attracting younger adults, particularly those 18 to 24 years old.
"That is the challenge for credit unions," he added.
Bank Transfer Day Helps
Credit unions "clearly got a real nice bump up" from new members who joined on or as a result of Bank Transfer Day, Haller said. The influx was the "biggest push" in credit union membership in a decade, made even more significant because many of those who joined were from the younger age group because the effort was largely driven by social media, which he noted is heavily used by younger people.
Thanks largely to BTD, credit unions added 2.5 million new members in a one-year period, said Haller. Unfortunately, the age of these new member was not tracked.
"There is no NCUA reporting requirement so the only way to track is through market research," he said. "But even if one-million of the 2.5 million were young adults, that would only affect the average age by two-tenths because there are roughly 95 million credit union members."
The addition of as many as one-million young adults is "important, absolutely," Haller acknowledged, but he said the impact on turning around the average age is "minimal." What the CU community needs is "more years like this to make a change."
"All credit unions would benefit from attracting as many 18-to-24-year-olds as they possibly can, because those members are their future borrowers," he said. "CUNA has been strongly recommending for several years that credit unions attract more younger members."
Social Media Payoff?
One potential trend that could pay off in younger members is efforts to expand usage of social media, said Haller. He also urged credit unions to reach out to existing members who are parents to encourage their young adult children to join the credit union.
"They also should be encouraged to open shared savings accounts with their kids to establish a relationship with the credit union," he advised. "Research finds 18-to-24-year-olds, asked why they joined a credit union, the No. 1 answer was 'parents.'"
Other initiatives CUs should pursue to attract more young adult members include having user-friendly online banking, bill pay and mobile banking. Haller said those services are how a lot of younger adults prefer to do their financial business.
The aging CU membership "is not a myth, it is a fact, and it needs to be addressed," he declared. "Bank Transfer Day helped somewhat, and if credit unions continue to focus on attracting younger members-or for some credit unions, begin to do so-it would help. It would help build membership, it would help long-term lending, and it would secure pools of future borrowers that will ensure future viability."
