Millennials and Credit Unions: What They Want, and How They Want it

by Karen Augustine 0

A recent articlepublished in CUInsight.com, an online source connecting the credit unioncommunity, cited a 2014 study by FICO that stated 90% of young adults accessthe Internet by smartphone and clearly require mobile optimization whenbanking. However, young adults are five times as likely as adults aged 50 orolder. Lower fees and better rates were cited as the basis for a betterfinancial institution, according to a 2014 Credit Union Difference Study ofMichigan households and often a strength of credit unions. Millenials demandgreater convenience and convenient ATM access is of critical importance tomillenials in order to obtain the cash they need. Credit unions often offerfree access to a shared network of ATMs.

“When we consider marketing efforts geared toward youngadults, the conversation is often dominated by methodology and channel – andthis is indeed important – but message should be given just as much credence.Studies show that based on their own assertions, credit unions systematicallyand categorically meet the needs of Millennials better and more often thanbanks.”

Millenials are indeed mobile-centric and are frequent ATM users, accordingto Mercator Advisory Group’s CustomerMonitor Survey Series Banking and Channelssurvey based on an online panel of 3,000 U.S. adults fielded in November 2014. Thisdata reveals that 71% of young adults aged 18 to 34 use their mobile phone tomanage their banking activities and 62% of young adults make bank transactionson their mobile phones. When asked how often are they unable to perform thebanking functions they want to do on their mobile app, young adults were twiceas likely as average to say this happens sometimes or more often. Moreover, nearly 1 in 3 young adults hadswitched their primary financial institutions within two years prior to thesurvey, and were twice as likely as average to do so. Nevertheless, 3 in 4young adults have bank accounts with full service banks, though they areslightly less likely than average to do so. Due to the importance of the mobileand online channels, 38% of young adults (compared to 26% average) have anaccount with an online or mobile only bank. ATM access is important tomillenials as well. In fact, 4 in 5 millenials visit an ATM at least once amonth to get cash compared to an average of nearly 2 in 3 adults who do so.

While lower rates, no-fee checking accounts and superior customerservice are all key benefits, credit unions will need to improve their mobileexperience to retain millennial accounts.

Overview by Karen Augustine, Manager, Primary Data Services at Mercator Advisory Group

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