The millennial market is A TOUGH demographic nut to crack. Credit unions have had an extremely difficult time figuring out what this generation wants from financial institutions–especially when it comes to technology.
"Millennials are often described generally as one large group, but in reality this generation is not a one-size-fits-all," said Susan Sachatello, senior vice president of TruStage, CUNA Mutual Group's consumer brand, which recently released a new report entitled "What Matters Now—Insights From Millennials."
The financial and technological needs of this generation, generally considered those between the ages of 18 and 34, vary substantially based on age, family status and even geographic location, according to Sachatello.
In the first of this two-part series, Credit Union Journal spoke to a number CUs about how they're attracting and retaining more millennial members.
Laura-Ilene Harding, chief marketing officer at Aspire Federal Credit Union, an $185 million institution based in Clark, N.J., explained that a concerted effort has been made in the last few years at her CU to redefine how members view banking services, and millennials continue to play a significant role in this evolution.
"You can't be all things to all people," said Harding. "We made the strategic decision several years ago to be digitally oriented. Therefore, we serve members that are open and accepting to receiving their banking services via this mode of delivery."
Serving 26,292 members, 9,223 of which are millennials, Aspire FCU has recently taken significant steps toward becoming a digitally focused organization.
"We just closed our seventh branch location," said CEO and President Thomas O'Shea, adding that the CU now operates just one branch. "We are willing to give up members that can't or won't accept this type of delivery. This approach has driven down our average member age from about 54 to 42 years of age."
Focusing on Technology
When it comes to attracting and keeping millennials engaged, one variable is required: forward-leaning technologies. This all-important approach needs to occur in the back office as well as with member-facing services, say industry experts.
"Our investments in direct-to-member technology also attract millennials. We believe that the rapid growth in our mobile channel is due to the interest of millennials," said CoVantage Credit Union's Executive Vice President and Chief Information Officer Bob Van Abel.
The $1.3 billion Antigo, Wis.-based CoVantage has 84,590 members, 35,235 of which are millennials, and 14 branch locations. "The concept of service is changing from a pleasant personal experience to the ability of accessing financial services at anytime from anywhere," Van Abel said.
"In some markets members perform a greater percentage of their banking through the digital channel. We reach out to these members in different ways than the past," he noted. "For example, we do more digital marketing that is targeted than in the past. One example of this is a series of YouTube videos with tens of thousands of views that earned a CUNA Diamond award."
Among tech-forward initiatives CoAdvantage CU recently launched was a direct-to-member mobile and online loan application that allows members to apply in five minutes. "Approval, processing and funding often occurs on the same day as the application," he said.
Aspire FCU's O'Shea said his team has to constantly "scan the environment" to understand the newest service delivery technologies. And recently the CU undertook a core conversion, which included upgrading from an older legacy system to Corelation's Keystone system.
The new core has an open application program interface (API), which allows the integration of the newest technologies without breaking the bank.
New and upgraded systems, all geared toward millennial and digital-focused members, include: new home banking and mobile banking (Digital Insight), remote deposit capture (Ensenta), Popmoney, checking account purchase rewards (internally developed), upgraded bill pay, IMM's TotaleAtlas, Adobe EchoSign, new member onboarding and loan application (IMSI) solution and added/integrated Apple Pay.
"We've been lowering our operating costs while adding new services. This is due in part to the fact that we can work with the smaller, more nimble, hungrier companies," said O'Shea. "Some of the most innovative services and ideas come about because these specialized niche players can connect to our core without spending tens of thousands of dollars."
Millennials vs. Boomers
Membership bookends could be equated between millennials and the baby boom generation (those born roughly between 1946 and 1964). To this end, c-level executives have to walk a fine line to ensure that service models are meeting the needs of these two demographics, as well as those members who fall in-between.
"Both millennials and baby boomers are impacted by the speed of society," Van Abel noted. "Thirty years ago if you wanted to find out about a historical event you might go to the library and look at an encyclopedia. Today, more information is shared than ever before and at breakneck speeds. We believe this societal shift has impacted our members' expectations of service. We keep our product offering simple, with very competitive rates and low fees."
Harding says both demographic groups want access to their accounts on-the-go via mobile and online banking platforms.
"They're both concerned about safety and security and they both want the assurance that a branch is available to them even though they may never step foot into one," she said. "Both cohorts want to save money (costs and fees) as well as their retirement with millennials having learned the importance of saving for retirement from their parents."
