Credit Unions a Natural Fit for Millennials
July 10, 2015
Millennials comprise the largest generation alive today with more than 75 million individuals between the ages of 18 and 34. While they are already a powerful money-spending group – to the tune of $1.3 trillion annually – they are predicted to become a powerful paycheck-earning group by 2025, with three out of every four workers globally being millennials. But before they account for most of our workforce, there is work to do to raise credit union awareness among millennials. Credit unions have much to offer this key demographic.
Between 2013 and 2014, nearly two million millennials became members of credit unions, which reflects a 2% increase. Credit union membership, currently more than 100 million strong, is expected to grow at about 2-3% annually over the next decade – not bad considering the U.S. population growth rate is only about three quarters of a percent, the lowest level since the Great Depression.
As member owned, democratically governed, not-for-profit cooperative financial institutions governed by volunteer boards of directors, credit unions can really resonate with millennials. They like the fact that we don’t have stockholders on Wall Street and instead pass earnings to our members. For-profit banks, in contrast, pass profits made from customers to stockholders, which mainly consist of big, out-of-state Wall Street corporations and wealthy individuals. Younger people seeking financial services in the post-Wall Street meltdown of the last recession are attracted to credit unions’ value-based decision making.
Not only are credit unions the best financial partner for millennials, they are also one of the best places to work. Fortune’s list of the 100 best workplaces for millennials named four credit unions – all of which have at least 40% of their workforces belonging to the millennial age group.
Several findings in recent studies point to the idea that millennial beliefs do not align with Wall Street banks:
- All four of the largest banks are among millennials’ least liked brands;
- Millennials are less likely to be deeply rooted with other financial institutions;
- Thirty-four percent of millennials leave their banking institution because account fees are too high, 27% leave because they have a negative experience with a representative and 24% depart because there are too few ATM locations;
- Seventy-one percent of millennials would rather go to the dentist than listen to what their bank has to say.
Credit unions, however, have excellent numbers going for them:
- Consumer trust in credit unions is double that of banks;
- Seventy-six percent of credit unions offer free checking;
- Credit unions lead in customer satisfaction among financial institutions;
- Eighty-nine percent of credit union members favor credit unions over banks;
- Credit union members have surcharge-free access to 30,000 ATMs nationwide.
Millennials are discovering that credit unions can meet their needs for banking services. Today, 15% of millennials use credit unions, and we have a real opportunity to attract more by helping raise awareness of the credit union difference and the advantages we offer.
This year’s America’s Credit Union Conference and the World Credit Union Conference is the premier event for credit unions from around the globe to come together and focus on learning from each other as we all fight for the best interests of our members. The current and future power of millennials is one reason why several of the breakout sessions at the joint conference are focused on millennial outreach, as well as the reason behind two dedicated programs for young credit union professionals – the World Young Credit Union People and Crashers. Going into this conference and these breakout sessions, we need to keep in mind that 70% of millennials believe technology will change the way they access money and pay for things as soon as in the next five years. And they are significantly more likely to transact with their financial institution through mobile apps and payments than other age groups are.
The good news is that credit unions are nimble enough to become early adopters of new technology. I’m looking forward to hearing ideas from credit unions around the world on how we can engage with and strengthen our relationships with young adults. This collaboration, which is so unique in the financial industry world, will help continue to set us apart and shine a light on growing the movement.
Jim Nussle is president/CEO of CUNA. He can be reached at 202-638-5777 or firstname.lastname@example.org.