BIRMINGHAM, Ala.-Dennis Dollar said he has not participated in a single strategic planning session at a credit union over the past three years during which the issue of an aging membership hasn't been discussed.
It's a challenge Dollar says stems from a legacy issue for many credit unions that competing banks don't face. And it's also a challenge that can be overcome, he believes.
"From our experience with our clients, the aging credit union member is a reality," said Dollar, the former CU CEO and NCUA chairman who now leads a consulting firm Dollar & Associates. "However, it also is a reality that most progressive credit unions are aggressively attacking. They are using technological delivery services, such as mobile banking, more user-friendly payment options such as swiping cell phones, and even opening a wider range of accounts online without coming to a branch."
The biggest challenge in reducing the average age of members is that it takes time, said Dollar. People are living longer, he noted, and the average age of the overall population has risen.
In addition, there are more retirees who are remaining members of their credit union.
"It takes a successful marketing campaign to move the needle," he said. "Over the long run, Bank Transfer Day may help move that needle, but it is way too early to see the impact. Possibly banks are facing the same issues, because any depository institution is dependant on depositors, who tend to be older."
Many credit unions, even those that today have community charters, began as workplace credit unions, Dollar pointed out, adding "That is where they draw the bulk of their volunteers."
Now, as retirees, "those folks still have deposits at the credit union and because of this, credit unions will skew a little bit older."
A Slow-Moving Needle
"Credit unions have been awash with liquidity for the past several years, which is why they are trying to bring in younger people-because the greater percentage of borrowers are younger people," he said. "Credit unions are doing everything they can to move that needle, but it just takes time. They cannot set a strategic goal to lower the average age from 50 to 45 and expect to resolve it in three years."
For a look at what other CUs are doing to get younger, visit www.cujournal.com and search by keyword.
