What Do Young People Want and Need?

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What are young people really looking for from their financial institution?

Gen Y, Millennials, Net Generation, Echo Boomers, Generation Next—no matter what label you give them, the fact is, credit unions are failing to attract the next generation of members. There is a decade-plus age gap in credit union industry. While the average age of a North American is 37 years old, the average age of a credit union member is almost 50. Credit unions are not replacing maturing depositors with young borrowers fast enough. But your credit union doesn’t have to fade into the history books. Learn how your credit union can understand and connect with young adults.

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What Do Young People Want and Need?

  1. 1. What do young people want and need from their financial institution? Tim McAlpine PRESIDENT & CREATIVE DIRECTOR CURRENCY MARKETING
  2. 2. “ Although the average age of today's population is getting younger, the average age of today's credit union member keeps creeping upwards. But credit unions can remain young—in thought, service and membership—by serving today's youth as well as their aging membership.” CREDIT UNION MAGAZINE, APRIL 1969
  3. 3. 1 2 3 4 Gen Y and Z Young adult staff What young adults need Young & Free learnings
  4. 4. • Founded in 1990 • Based in Canada • 80% of business is in U.S. • 100% credit unions
  5. 5. 30 and counting!
  6. 6. currencymarketing.ca/think
  7. 7. 1 What makes Gen Y and Z tick?
  8. 8. Silent 1928-1945 Baby Boomers 1946-1964 Gen Y 1980-1996 Gen X 1965-1979 Gen Z 1997-Now
  9. 9. BABY BOOMERS GEN Y GEN X 76 million 50 million 78 million 7 more years left in this generation GEN Z 23 million
  10. 10. Average age UNITED STATES CREDIT UNION MEMBER NORTH AMERICAN The great divide 35 48 54 CANADIAN CREDIT UNION MEMBER SOURCE: CUNA, CUCC, U.S. CENSUS, WIKIPEDIA
  11. 11. 10 8 5 3 0 1989 17 1996 % of the population is between 18 and 24 2000 2002 2006 4 % of credit union members are between 18 and 24 2008 SOURCE: CUNA MARKET RESEARCH
  12. 12. BOOMERS TRILLION 40 $ X+Y+Z
  13. 13. 98 % of next gen inheritors CHANGE advisors, and move away from their parents existing banking relationships SOURCE: THE RUDIN GROUP
  14. 14. Y anti hype technology confident spenders savvy cool goals college respect planning influence truthful authenticity distrust forward thinking family questioning quality media university wary friends fun world view connected anti hype technology confident spenders savvy cool goals college respect planning influence truthful authenticity distrust forward thinking family questioning quality media university wary friends fun world view connected anti hype technology confident spenders savvy cool goals college respect planning influence truthful authenticity distrust forward thinking family questioning quality cool truthful truthful confident savvy GEN
  15. 15. Gen Y ‣ Follows Generation X ‣ Largest generation in history ‣ Born from 1980 to 1996 (17 to 33 in 2013) ‣ Socially conscious ‣ Distrust companies and media ‣ Could care less about credit unions!
  16. 16. Gen Y ‣ Entering and finishing college ‣ Finishing college and university ‣ Planning five years ahead ‣ Looking forward to relationships ‣ Confident but wary ‣ Practical world view
  17. 17. Gen Y ‣ Respect parents and education ‣ Shopping is an event, not a chore ‣ Raised on texting and IM ‣ Social networking is huge ‣ Open to spirituality ‣ Indifferent to Christianity
  18. 18. Z anti hype technology confident spenders savvy cool goals college respect planning influence truthful authenticity distrust forward thinking family questioning quality media university wary friends fun world view connected anti hype technology confident spenders savvy cool goals college respect planning influence truthful authenticity distrust forward thinking family questioning quality media university wary friends fun world view connected anti hype technology confident spenders savvy cool goals college respect planning influence truthful authenticity distrust forward thinking family questioning quality cool truthful truthful confident savvy GEN
  19. 19. Gen Z ‣ Follows Generation Y ‣ Born from 1995 to 2011 (2 to 18 in 2013) ‣ Smaller than Generation Y ‣ Only knows of a world with the Internet ‣ Faces a dismal economic picture
  20. 20. Growing up digital ‣ Constantly connected ‣ Phone serves as everything hub ‣ Internet access mostly via computer ‣ Still regular TV watchers ‣ Digital connections trump money, music, movies ‣ Reluctant to disconnect
  21. 21. Growing up digital ‣ Legally or not, Facebook is the place to be ‣ Constantly chatting, often online ‣ More at ease socializing online than offline ‣ Spenders first, savers second ‣ Sensitive to family’s financial situation ‣ Parents have mixed feelings about social networks
  22. 22. Growing up digital ‣ Both online and offline shoppers ‣ Parents usually pay online ‣ Tethered to parents for shopping ‣ Economic concerns weigh heavily ‣ Girls more concerned about war and crime ‣ Pessimistic about the near term
  23. 23. 2 Young adult staff
  24. 24. Typical staff pictures
  25. 25. Typical board pictures
  26. 26. Credit Union Central of Canada’s National Young Leaders Program cucentral.ca
  27. 27. World Council’s Young Credit Union People (WYCUP) woccu.org
  28. 28. CUES Next Top Credit Union Exec ntcue.com
  29. 29. The Cooperative Trust trust.coop
  30. 30. CU Water Cooler cuwatercooler.com
  31. 31. Positive energy and a palpable sense of frustration
  32. 32. “I’m out!”
  33. 33. “ I wanted to stay, but I had to better myself.” YOUNG MALE MARKETER WHO RECENTLY LEFT A $90 MILLION CREDIT UNION FOR A CAREER IN ANOTHER INDUSTRY
  34. 34. “ We see this huge opportunity to turn this very archaic industry into something huge, but we all see the same brick wall from our credit unions.” YOUNG MALE MARKETER WHO RECENTLY LEFT A $90 MILLION CREDIT UNION FOR A CAREER IN ANOTHER INDUSTRY
  35. 35. “We aren’t like our parents, stuck in a rut for our whole life.”
  36. 36. “ I wonder if the accessibility to information, the mobility of the workforce and the global awareness of a multitude of complex issues leads some of my generation to say, ‘I’ve contributed to the tackling of these financial issues; maybe I’ll tackle something else for a while; the world needs me!’” BEN IS AN ADVISOR AT $800 MILLION MENNONITE SAVINGS AND CREDIT UNION, ONTARIO, CANADA
  37. 37. Mark Zuckerberg
  38. 38. Jack Dorsey
  39. 39. “My credit union doesn’t behave like a credit union.”
  40. 40. “ The bill of goods that has been sold to young credit union professionals is that our model puts our members first (and profits last). What’s hard to understand, however, is why our response to the economic collapse has been so similar to that of the banks we were told had business models that were completely foreign to ours.” MATT DAVIS, INNOVATION DIRECTOR AT THE FILENE RESEARCH INSTITUTE, MADISON, WISCONSIN
  41. 41. “I love credit unions, but I can’t stand my credit union.”
  42. 42. “ The reality is, many credit unions today have lost sight of their original purpose of people helping people. They suffer from the myopia of immediate stressors, the fear of change, and can’t shake loose from the inertia of what has been. I can’t tell you how many credit union employees I’ve heard say, ‘I love credit unions, but I can’t stand my credit union.’” BRENT DIXON, YOUNG ADULT RESEARCH ADVISOR AT THE FILENE RESEARCH INSTITUTE AND THE CREATOR OF THE COOPERATIVE TRUST
  43. 43. “We want to make positive changes that will push our industry”
  44. 44. Title here
  45. 45. “ In an industry that is already old-fashioned in many ways, smothering our voice becomes a de-motivator. I think that’s what causes people to leave it altogether. I believe in the possibilities of what we can be, and that’s why I’m committed to the movement.” RONALDO HARDY, CEO AT $400 MILLION LA CAPITOL FEDERAL CREDIT UNION, LOUISIANA
  46. 46. “I’m in for now, but frustrated!”
  47. 47. “The saddest thing about the credit union system right now is it’s inability to articulate a vision.”
  48. 48. “ It is the responsibility of senior credit union leaders to create a sense of mission or vision that can feed and sustain the idealism. In Canada, this idealism has essentially evaporated. Our credit unions operate profitably and professionally, but our operations are bland and undifferentiated as we navigate the unclear cultural relevance of being a credit union.” A YOUNG CANADIAN CREDIT UNION PROFESSIONAL IN HIS 30S
  49. 49. It’s not all doom and gloom
  50. 50. “I’m in for life!”
  51. 51. “ I have a voice and I see myself as part of the solution. My credit union was the first to give me a shot right out of college. I was handed the keys to a marketing department at the age of 24. I’ve had an amazing opportunity to learn, try new things and fail and grow over the past five years.” MATT VANCE, MARKETING/COMMUNITY MANAGER AT $139 MILLION INDUSTRIAL CREDIT UNION, WASHINGTON
  52. 52. “ I have been allowed to bring some of my own innovation to the credit union and run with it. This, added with my current role, has provided me with a greater purpose and it has made all the difference. It has allowed me to be more engaged, more committed and wanting to do more for my credit union, along with providing me with the motivation to do a better job in my current role. By being provided with these types of additional opportunities and responsibilities, I do believe I will be a lifer.” DEVIN SELTE, CORPORATE TRAINER, LEADERSHIP DEVELOPMENT AND CHANGE LEADERSHIP AT $10 BILLION SERVUS CREDIT UNION, ALBERTA, CANADA
  53. 53. “My personal values are so aligned with the mission”
  54. 54. “ I don’t think age or size of organization has anything to do with it. I think the fact that my personal values are so aligned with the mission of Vancity is instrumental and perhaps completely unique. For me, that is the critical ingredient.” WILLIAM AZAROFF, DIRECTOR, BUSINESS & COMMUNITY DEVELOPMENT AT VANCITY, $18 BILLION, BRITISH COLUMBIA, CANADA
  55. 55. It’s not about the money ‣ A credit union that believes in innovation and free thinking ‣ A superior who they respect ‣ A belief that they are part of something bigger than just their own credit union ‣ Continued educational opportunities
  56. 56. More success ingredients ‣ A personal passion and purpose that aligns with credit unions ‣ Room to try new things ‣ Opportunities for growth ‣ An obvious path for advancement
  57. 57. More success ingredients ‣ Flexibility on hours and location ‣ Casual environment ‣ Lack of politics ‣ Young credit union professionals appear to thrive at larger credit unions
  58. 58. 3 What do young people want and need?
  59. 59. Chris and his friends tell us everything we need to know...
  60. 60. “ I need a bank that tries to understand.”
  61. 61. Show you understand ‣ Explain the credit union difference ‣ Listen and show compassion ‣ Use straightforward language ‣ Offer tailored products and services ‣ Deliver plain-English financial education ‣ Provide do-it-yourself accessibility
  62. 62. 69 % of consumers ages 18 to 24 are “not at all familiar” with credit unions SOURCE: CREDIT UNION NATIONAL ASSOCIATION’S (CUNA) 2011-2012 SURVEY OF POTENTIAL MEMBERS
  63. 63. 5 % of Gen Y will consider a credit union the next time they need a financial product RON SHEVLIN, AITE GROUP ANALYST SOURCE: AITE GROUP ENGAGING GEN Y: CULTIVATING A NEW GENERATION OF BANKING CUSTOMERS
  64. 64. Free debit card for the ATM.”
  65. 65. Transaction products are very sticky Offer free access to: ‣ Online banking ‣ Online bill-pay ‣ E-statements ‣ Offer relevant debit rewards
  66. 66. Your first credit card lasts YEARS 15 ON AVERAGE
  67. 67. $ 2,846 Average credit card debt for a college senior
  68. 68. Characteristics of a responsible card ‣ Start with low introductory rate that rises steadily and predictably ‣ Allow three over-the-limit or late-payment fees per year
  69. 69. Characteristics of a responsible card ‣ Link to a savings or investment account and offer “overpay” option or cash back to savings automatically ‣ Share credit scores with your members regularly
  70. 70. Customization First was the traditional flame job, which I used to modify this lame-ass card.
  71. 71. “ Swimming in debt from student loans.”
  72. 72. In the past decade, average student debt levels rose by over $10,000 $9,250 $20,000
  73. 73. By 2004, people under 25 were the fastest growing group in BANKRUPTCY DECLARATIONS
  74. 74. Student loans program ‣ Huge opportunity: A generation of well-educated and disenfranchised young adults who need help ‣ Concentrate on consolidation ‣ Offer a lower-than-standard rate ‣ Communicate the benefits of one bill instead of many
  75. 75. “ I just bought a new car that I can’t afford.”
  76. 76. First car loan ‣ Great opportunity to start long-term relationship ‣ In addition to credit score, evaluate on character, capacity and collateral ‣ Bundle with checking account and require automatic payroll deposit
  77. 77. “ A credit union is where you need to be.”
  78. 78. Consumer Trust by Age “How much do you trust the following entities with your money?” BANK 18–34 35–54 14% 8% CREDIT UNION 4% 22% 30% 55+ 16% Younger consumers trust banks while older consumers trust credit unions most % calculation: Top 3 box responses (“trustworthy”) less bottom 3 box responses (“not trustworthy”) SOURCE: MCKINSEY FINANCIAL INSTITUTIONS CONSUMER INSIGHTS SURVEY, 2009
  79. 79. Education and technology are key ‣ Don’t assume young adults know or care about your credit union ‣ Build trust over time ‣ Stress accessibility (shared branching and ATMs) ‣ Keep up to or ahead of your competitors’ technology
  80. 80. 63 % of the population is comfortable with making payments on their smart phone as soon as the service becomes available SOURCE: MASTERCARD
  81. 81. Checking my account at 2 a.m.”
  82. 82. Self-service is the new service with a smile ‣ Modern online banking system ‣ Mobile website ‣ iPhone and Android banking apps ‣ Personal financial management tools ‣ Remote deposit capture
  83. 83. “ Younger members want mobile cheque deposit, external account transfers, online account opening, instant withdrawal of bill payments, cheque image viewing, pending transaction viewing, and budgeting tools.”
  84. 84. Be aware of new competitors
  85. 85. ONLINE BANKS are your real future competition
  86. 86. 86 % of online bank customers said customer service is the reason they would not switch ROB RUBIN, FACILITAS SOURCE: YOUNG ADULTS EVOLVING FINANCIAL PREFERENCES, FILENE RESEARCH INSTITUTE
  87. 87. simple.com moven.com
  88. 88. “The people you see here are outspoken fans of Virtual Wallet – that's how we found them. To thank them for spending a day talking to us about life with Virtual Wallet, PNC offered them each a gift.”
  89. 89. AND OF COURSE...
  90. 90. And finally, don’t forget what makes credit unions special
  91. 91. “ I need a place where I won’t be ignored.”
  92. 92. 4 Young & Free learnings
  93. 93. Launched September 2007
  94. 94. Recognition Credit Union Central of Canada MAC Network Awards • National CU Innovation Award • Gold Award for market segment program • Gold Award for PR • Gold Award for websites • Best of Show MACQUEE CUES Golden Mirror Awards • 1st place coordinated campaigns • 1st place segmented campaigns • 1st place for PR CUNA Diamond Awards • 1st place for PR Forrester Research Groundswell Awards • 1st place in the talking category MAC Marketing Now Awards • Winner video • Winner blog • Winner podcast • Winner social media engagement • Winner social media personality MACU AIME Awards • Gold AIME new product launch • Silver AIME coordinated campaigns • Silver AIME radio • Silver AIME websites • People's Choice Award
  95. 95. “ JOSH BERNOFF SENIOR RESEARCH ANALYST CO-AUTHOR OF GROUNDSWELL FORRESTER RESEARCH You deserved to win. You did a great job and just as important, actually delivered business value with your application. The big companies did too, but your application was more impressive based on the creativity and the results delivered on a limited budget.”
  96. 96. Growth 2006 2007 2008 2009 2010 2011 2013
  97. 97. UNIVERSAL PRINCIPLES
  98. 98. Make a big deal out of everything
  99. 99. 29 surprise events to date
  100. 100. Don’t stand still
  101. 101. 2008
  102. 102. 2011
  103. 103. 2013
  104. 104. Fill the calendar
  105. 105. CONTENT
  106. 106. EVENTS
  107. 107. PARTNERSHIPS CURRENCY MARKETING Job # MFCU2011 Filename Account Executive: Kate Davies MFCU2011 - Web Banner TNL Coop.indd Last Modified 10-4-2011 11:14 AM Prev. User PROOF 1 Kevin Castillo / Kevin Castillo
  108. 108. MEDIA OPPORTUNITIES
  109. 109. Keep doing new things
  110. 110. 318 APPLICANTS
  111. 111. Inspire people to creatively spread the word
  112. 112. Make yourself the center of the local universe
  113. 113. Be ever present on and offline
  114. 114. Don’t dismiss traditional media
  115. 115. Where did you learn about this opportunity? #1 Friend #2 Radio #3 Facebook
  116. 116. Spend as much time in the community as you do online
  117. 117. Deliver on the promise of financial literacy
  118. 118. Collaborate
  119. 119. 1 Understand Gen Y and Gen Z 2 3 4 Recruit and engage young employees Offer relevant products and services Integrate your marketing
  120. 120. Thanks! Tim McAlpine PRESIDENT & CREATIVE DIRECTOR CURRENCY MARKETING

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