Think Young People Don't Want Branches? Think Again

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There are approximately 80 million "Gen Y's" in the U.S. today, making up about 30% of the U.S. population, according to Wikipedia. And most of them are in their household formation years of their 20s-a time which often includes looking for a primary financial institution, perhaps for the rest of their lives.

Yet, with all their unique characteristics-tech savvy, family-centric, team players, achievement oriented, attention craving-Gen Y'ers are actually not all that different from previous generations when it comes to financial services. They like the touch and feel of the real world.

The proof is in the numbers when it comes to Gen Y'ers and branches.

A January 2013 study by Javelin Strategy & Research ("A Tale of Two Gen Ys") found that young consumers prefer to conduct transactions in person at branches at a rate of 2.5 times greater than consumers over the age of 65, although the older customers are often thought of as the heaviest users of branch services.

Credit unions may have multiple branches within a given region, but the way members define "convenient" has drastically changed over the last decade. Aside from travel, emergencies and moving, this trend is especially true for Gen Y'ers, whose members are accustomed to and expect speed and ease-of-use delivery channels.

The collaboration, then, of nationwide shared branching offered by CUs may be a strong attraction for Gen Y'ers-particularly as credit unions seek to compete successfully against banks for this key demographic.

Build It, And They Will Come

Georgia's Own Credit Union, for instance, already has an unusually large regional footprint with 25 locations throughout the state. Yet it supports credit union shared branching as a means of serving younger members.

"This group of people needs a wide variety of channels. They want it all. In our experience, we find that if we put it out there, they will use it. This includes branches, among other things," says Kathy Igou, VP-branch Services for Georgia's Own. "We also hoped this would help us see an increase in credit union membership statewide. As far as we were concerned, it didn't matter what credit union the member belonged to. As long as it wasn't Bank of America, we were happy."

As much as they seem to enjoy surfing the net and texting by themselves, Gen Y'ers are also big on the personal touch of family relationships, colleagues and teamwork. They feel the same way about where they put their money. Thanks to the Great Recession, they want to see where their money goes. They also appreciate good personal service and value convenience, since both factors fit in with their busy days and multi-tasking world.

Revealing Trends

Retail shopping trends are very revealing. According to a September 2012 white paper by RedPrarie Corporation ("The Millennial Report"), while Gen Y'ers are more comfortable making online purchases than their parents, they still prefer to be inside a retail store talking to a helpful, human sales associate.

This goes a long way in explaining why Gen Y'ers are frequent visitors to branches-the personal touch that comes with a branch complements their lifestyle.

Taking a broader look at the importance of branches, research shows that access to services based on location and convenience remain preeminent when consumers select a financial institution. in November 2012 reported on a study by Bancography that stated: "In its 'Survey of Consumer Finances,' a triennial survey of the financial behavior of American households, the (Federal Reserve Board) asks consumers to cite the most important reason for choosing their current institution for their main checking account. In the 1992 survey, 44% of consumers cited location of the branch as the primary determinant. The proportion citing branch convenience never dropped below 43% in the next six iterations of the survey. In the most recent edition, it was 46%."

A Fresh Approach To Design

Many financial institutions are transforming their branches by taking a fresh approach to design and services to attract Gen Y'ers and other new members. For example, credit unions are creating a more friendly, Apple Store-like atmosphere where members can receive professional, personal financial advice, while using free Wi-Fi to access a high-tech kiosk with interactive services. Credit union shared branching technology supports this new enhanced branch experience for members by delivering self-service, video and contact center support.

For these Gen Y'ers, it's natural they would prefer to be members of a financial institution where convenience, personal service and the opportunity for human interaction in a branch facility, coupled with state-of-the-art technology services, satisfies most-if not all-of their requirements.

Craig Beach is President and Chief Operating Officer, CUSC, a subsidiary of CO-OP Financial Services, Rancho Cucamonga, Calif. ( He can be reached at and 678-812-1322.

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