Just about every credit union conference includes at least one session on reaching out to millennials. Turns out that's a good strategy—but maybe not for the reason you think.
It's not just the fact that millennials will, of course, generally still be around long after the baby boomers and Gen Xers are gone. And it's not simply because the sheer numbers of this cohort is even bigger than the baby boomers.
It's that what millennials want also happen to be what everyone else wants, too.
"There is a lot of industry attention focused on millennials as the tech-savvy and demanding consumers, but this is not isolated to millennials," said USF FCU Chief Marketing Officer Deborah Clark. "They do tend to tick a little higher on usage percentages and are early adopters for new technology, but not near enough to make dangerous assumptions that you need only focus on this group when determining digital roadmap strategy and planning enhancements."
CCG Catalyst, a management consulting firm, recently released its latest research report, "Millennials and the Future of Banking: What Banks Need To Know About This Digitally Precocious Generation To Prepare For The Future of Banking." This study examined the behaviors, experiences and financial needs of people 18 to 35 years old. In total, 124,000 data points were aggregated from 450 surveys in 46 states.
"Our results show that this digitally engaged generation not only expects omni-channel banking, but omnipresent banking as well," said Paul Schaus, CEO of CCG Catalyst. "As banks transform their business strategy to cater to this generation, they must understand that while this group wants more automated functionality, they still expect to maintain control over their banking but want a human connection when they need it."
For the $94 million Odessa, Texas-based Southwest 66 CU, which supports 9,700 members at two branches, millennials make up nearly one-third of membership at 29%. That's 10 points higher than the national average, according to Raddon Financial Group.
"I am seeing millennials who want to come in and do their most important business face-to-face," said Southwest 66 Credit Union CEO Sean Cahill. "For day-to-day transactions they want and demand the digital channels, but they also want locations where they can sit down and speak to a human being about their financial situation."
The CCG report sided, in part, with Cahill's comment in that nearly 90% of respondents said they have a financial services relationship with a bank or CU, with less than 4% using an online-only bank. The survey also found that only 48% use checkbooks, 68% use online banking to manage their bank activities and 46% use digital banking to pay bills online.
Southwest 66 CU, which launched its mobile app in 2013, currently has 1,126 users compared to 6,777 users of online banking.
"This past year we created a vice president of member services role to better serve all of our demographics, with a focus on using data to do so," said Cahill. "Aaron Chavez, an employee with us for more than 10 years, has done an incredible job for us in this role, which is heavily focused on millennials and attracting new members."
The CCG study indicated millennials are trending toward banking convenience—but age is less of a determinant than is commonly assumed. "The preference for the traditional banking approach versus digital lays more in the individual's personality and preferences than age. It is a balance to understand, and cater, to this," said Clark. "Members, in general, want to be able to accomplish all their routine banking needs without ever needing to come to a branch or speak to someone. But, they want to know that there are convenient branches nearby that they can easily visit if they want/need to."
USF FCU has 52,912 members and six branches. Clark noted that 42% of current members are millennials, and of that number, 65% are active online banking users. Overall, 57% of members use online banking and 20% of members use mobile banking.
Clark said in the last year, USF FCU has conducted several initiatives to better serve the millennial demographic, including launching online applications for all consumer deposit and loan accounts, electronic signatures for account opening/loan documents and enhanced mobile banking options, such as P2P payments via PayPal and Apple Pay. Come May, the CU's website will also be redesigned. "A key to success is maintaining a strong partnership with the university," said Clark. "New students are sent information on the credit union's services prior to arriving for the school year, and the credit union is on-site for all student orientations with tablets to open member accounts and in-branch card generators."
Ron Smith, senior vice president of sales and branch operations for Texas Trust Credit Union, explained that 14.6% of his CU's 71,000 members are millennials. When it comes to internet banking, he added that millennials only slightly edge out other members, noting that "23.1% of all members use internet banking and 24.9% of millennials use internet banking." Moreover, 2% of millennials use bill pay, while 6.1% of pre-millennials do, and 5.1% of all members do.
In an effort to better understand millennials, Cahill said Southwest 66 CU has partnered with the CUnify platform, a relational database that allows executives to analyze data and identify millennial trends and behavior. "We actually used feedback from this group to completely remodel and rebrand our institution. Our lobbies are now retail focused and we strive to act like an Apple Store or Verizon," said Cahill.
USF FCU took a similar step by partnering with the USF MUMA College of Business, which led to the renovation of its student center branch and a paid internship program. "These interns provide valuable insight into the millennial mindset; providing the CU with direct, honest feedback on service, processes and products from the perspective of our student membership," said Clark.
The information gained from these efforts will inform the services these CUs offer membership in the near future. And while millennials may be on the leading edge of these trends, they are followed closely by older members eager for banking convenience.
"Smartphone usage is only slightly lower in Gen X and Baby Boomer segments, still reaching above 60%. Consider the professional working segment, managing career, home and family. With the increase in life responsibilities comes less free time and the need for enhanced technology and new services," said Clark. "Over time, I think we all become the 'technology generation' as we become accustomed to the rapid advancement of mobile app usage."
