Credit Unions: What They Mean to Millennials
Millennials are the largest generation in history, and with so many in this young adult age range, the banking industry is taking notice of what this group is looking for when choosing a financial institution. The stigma that has followed this generation is that they are confident, coddled, open-minded, ambitious, entrepreneurial, naive, intelligent and technology-focused to a fault. But, that is just a stigma.
The wants, needs and what they feel is important are all very different with the millennial generation versus past generations. And, to better capture them as a credit union member, credit unions must take the time to truly understand the generation before attempting to reach them.
First, the millennial generation, for the most part, are not buying homes or cars, and are also holding off having families; they generally have a great deal of school loan debt and are more interested in happiness and community service than a fat pay check. They shy away from “corporate America” and favor “community.” Credit Unions meet the needs of this generation due to having the same ideals as millennials — they are not-for-profit organizations that operate as a cooperative, community-centric model which resonates with young people who want to make the world a better place. And, now that banks, as an institution, have a tarnished reputation after the 2008 financial crisis, it is an ideal time to attract millennials and persuade them to switch to a credit union from a bank.
What Millennials are Learning about Credit Unions
Many young professionals have thought of a credit union as a members-only organization that is not easy to join; however, credit union memberships have evolved. Although some credit unions organize around special interest groups such as teachers, military or link to specific companies – most likely because that’s how they were originally chartered – most open their membership to all people within a specific geographic range of work, residence or worship. For most community credit unions, simply opening a savings or checking account is the membership threshold.
Like banks, credit unions accept deposits, make loans and provide a wide array of other financial services. But as member-owned and cooperative institutions, credit unions provide a safe place to save and borrow at reasonable rates. Credit union members are more likely to trust their financial institution over a bank, as they realize that as a not-for-profit organization, the credit union exists to serve its members, not shareholders.
Benefits of a Credit Union for Millennials
- With their large student loan debt, millennials are looking for ways to save money, and the fee associated with a checking account at a credit union is often significantly lower than at a “big bank”
- Credit unions are often the only way a young person can obtain credit
- Customer service at a credit union is usually considered better, as they are there to serve their members, and the members are the owners
- Credit unions typically have robust corporate social responsibility programs, helping the community, which is appealing to the millennial generation
- Credit unions also offer their members financial education to help them make the best decisions with their money. Many millennials do not have a lot of money to invest, and most local credit unions offer assistance with creating financial strategies for those with as little as little as $500 – they have an eye on the futures of their members
What Credit Unions Should Know
- Even though credit unions are a great fit for millennials, only 20% use credit unions for their main financial institution, mostly due to their lack of understanding that credit unions are an option, so education and marketing efforts are critical
- Millennials are a tolerant generation and are willing to take risks; money does not drive them, happiness does
- Millennials like to support community and locally owned businesses, but they are also very tied to technology and mobile convenience
- Customer service and financial education are very important to millennials
- Make them feel like they are important and part of the organization, no matter what money they have to invest, and they will be loyal