SAN FRANCISCO — It's time for credit unions to start talking a little SMAC.
SMAC stands for social, mobile, analytics and (credit and debit) cards, said Fredda McDonald, EVP and chief creative officer of PSCU, St. Petersburg, Fla. And those four things collectively are the best tools to reach out to millennials, McDonald said.
Social means building a significant presence on social media, where the future members are. Mobile means having mobile apps available. Analytics: invest in analyzing the member database. McDonald said CUs can use analytics to heighten the member experience. Finally, cards are a way to attract members if the credit union is the trusted payment source. CUs can use balance transfer offers to attract new members to open new accounts.
These tools are very different from the traditional ways credit unions have reached out to previous generations, but that's because this generation is very different as well.
"Fifty percent of the population of the world today is under 30 — that is a large group," she said, recalling the mantra of the 1960s to not trust anyone over 30. "iPhone sales outpace births, and Android devices outpace iPhones. Mobility is connecting people and driving them to action."
Megatrend: The Disruptors
A megatrend of interest is disruptive technology. McDonald cited the example of Uber, a smartphone app that connects individuals with a car with people who need a ride — bypassing the traditional cab companies. The user decides which payment type to load in the app, including tip.
Many major cities have adopted Uber, McDonald reported. "The app is creating 20,000 jobs per month, and expanding around the world city by city. Credit unions should look into this and make sure they are a trusted payment source."
The key concept to remember, McDonald continued, is "disrupt or be disrupted." Millennials generally are described as individuals whose birth years range from the early 1980s to the early 2000s. They matter, she said, because there are 86 million in the U.S., they spend $600 billion per year, and 68% think banking must change — a major opportunity for credit unions.
Some 71% of millennials prefer dental visits to banks, and 40% prefer to buy local because they are community focused. Once they find something they like, 70% are brand loyal.
But what do millennials know about credit unions? Research found 71% know little or nothing about CUs, but McDonald said there is an opportunity because 70% of millennials want to disrupt banks.
"Credit unions can 'embrace their small.' Their values are local, which is what millennials embrace," she said. "Nearly 90% have a mobile device, 75% have a social profile and 33% want to live 'bank free.' We need to get their attention."
To reach millennials, CUs need to understand what they listen to, said McDonald. They do not trust advertising messages, but they do trust social messages from their friends.
"Tell them the difference between a credit union and a bank," she urged.
