Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
5 Insights on How Credit Unions Can Attract
Millennials as Members
©2016 Fair Isaac Corporation. All rights reserved. 2
FPO
Diagram
Who’s in the Digital Generation,
and why do they matter?
...
©2016 Fair Isaac Corporation. All rights reserved. 3
Gen-D: The appeal of credit
unions for Millennials
Are credit unions ...
©2016 Fair Isaac Corporation. All rights reserved. 4
Gen-D: The appeal of credit
unions for Millennials
What motivates peo...
©2016 Fair Isaac Corporation. All rights reserved. 5
Gen-D: The appeal of credit
unions for Millennials
Insight: In this l...
©2016 Fair Isaac Corporation. All rights reserved. 6
Gen-D: The appeal of credit
unions for Millennials
Insight: Our resea...
©2016 Fair Isaac Corporation. All rights reserved. 7
Gen-D: The appeal of credit
unions for Millennials
Insight: Gen-D mem...
NORTH AMERICA
+1 888 342 6336
info@fico.com
FOR MORE INFORMATION
www.fico.com
www.fico.com/blogs
LATIN AMERICA & CARIBBEAN...
Upcoming SlideShare
Loading in …5
×

5 Insights on How Credit Unions Can Attract Millennials as Members

2,903 views

Published on

The Digital Generation: Credit Unions

This report highlights areas where credit unions have an opportunity to win over Millennials from other financial institutions.

Discover:

- Key Millennial motivations for switching financial institutions
- Importance of digital communications for Millennials
- How credit unions compare to banks in the eyes of Millennials

Download here:
http://www.fico.com/en/latest-thinking/ebook/the-digital-generation-credit-unions

Published in: Software
  • Be the first to comment

  • Be the first to like this

5 Insights on How Credit Unions Can Attract Millennials as Members

  1. 1. 5 Insights on How Credit Unions Can Attract Millennials as Members
  2. 2. ©2016 Fair Isaac Corporation. All rights reserved. 2 FPO Diagram Who’s in the Digital Generation, and why do they matter? Millennials compose the largest population segment in the United States and the foundation of what’s known as the Digital Generation, or Gen-D. Gen-D, and Millennials in particular, are technologically savvy consumers who use multiple devices and apps. This group is impacting our economy in both expected and unexpected ways — and will increasingly dominate consumer spending for decades. FICO recently completed an extensive consumer research study that looks deeper into Millennial trends. This report covers data related specifically to Millennials and credit unions. Millennials were born between 1980 and 1994 and comprise 30% of the US population 30% Gen-D: The appeal of credit unions for Millennials
  3. 3. ©2016 Fair Isaac Corporation. All rights reserved. 3 Gen-D: The appeal of credit unions for Millennials Are credit unions gaining Millennial appeal? Insight: National banks remain the predominant financial institution among all generational groups, but credit union popularity among the younger generation has increased to 20%, up from 15% last year. For those 55 and older, 20% use credit unions as their primary financial institution. Opportunity: Although credit union and regional bank members are generally older, 18- to 24-year-olds are noticing the value that credit unions provide as an alternative to the large nationals. In particular, this age group is attracted to low and transparent fee structures and better interest rates. As Millennials age, we’re seeing a shift away from credit unions as factors such as convenience come into play. The opportunity lies in working to retain those younger members as they mature. Primary bank account by age groups 18- to 24-year-olds 25- to 34-year-olds 68% Large National Banks 10% Credit Unions 61% Large National Banks 20% Credit Unions 16% Regional Community Banks 19% Regional Community Banks
  4. 4. ©2016 Fair Isaac Corporation. All rights reserved. 4 Gen-D: The appeal of credit unions for Millennials What motivates people to switch banks? Insight: For the second year in a row of our studies, the number one reason that consumers leave their primary financial institution is the perception of high fees. Of those consumers who have switched institutions, 49% listed high fees as the top reason. For Gen-D, fees are still the number one reason for switching, followed by poor customer service or ATM/branch convenience issues. Opportunity: Customers at national banks who are tired of high fees, high rates on credit products and lack of transparency on fees are a perfect marketing target for credit unions. Credit unions are perceived to have lower fees than national banks (79% of credit union customers strongly agree that fees are low, 10 points better than large national banks) and they have the highest satisfaction rating, with 90% of customers being very satisfied (regional bank customers are 79% satisfied and national bank customers are 78% satisfied). The key for credit unions is crafting the right marketing programs that reach those customers. Transparent of fees Convenience Low account fees Evaluation of primary bank (Strongly agree) Credit unions Regional banks National banks 79% 74% 69% 69% 80% 77% 79% 68% 62% Overall trustworthiness 88% 77% 76% Low interest rates 67% 48% 50%
  5. 5. ©2016 Fair Isaac Corporation. All rights reserved. 5 Gen-D: The appeal of credit unions for Millennials Insight: In this latest survey we observed a significant uptick in consumers of all types who were most likely to switch. The youngest consumers were less likely, while 25- to 34-year-olds were nearly 2-3x more likely to close all accounts with their primary financial institution vs. other age groups. Although overall there was an increase in those likely to switch, credit union members are the most loyal to their primary financial institution. Opportunity: Right now, only 10% of 25- to 34-year-olds are using credit unions. When you combine that statistic with the fact that 25- to 34-year-olds are more likely to switch banks, it’s easy to see how this group represents a tremendous opportunity for credit unions. What credit unions lack in convenience, they make up for in high satisfaction ratings, low fees and trustworthiness. How likely are consumers to switch financial institutions? Credit union customers are more stable 21% of national bank customers are very likely to open a new account or line of credit with a new bank vs. just 8% of credit union customers When compared to credit union customers, national bank customers are 3.5x more likely to close all accounts 3.5x
  6. 6. ©2016 Fair Isaac Corporation. All rights reserved. 6 Gen-D: The appeal of credit unions for Millennials Insight: Our research shows a significant gap in the way that Millennials, and in fact all generational groups, would prefer that financial institutions deliver communications for a variety of situations, including bill payment reminders, notifications of suspicious charges, credit limit warnings, etc. The bottom line is that each consumer group has unique communication preferences, and overall consumers would prefer to receive more text messages for all types of messages (e.g., suspicious charges, late payments, etc.). Opportunity: Fortunately, today’s technology makes it easy for credit unions to customize member communications to their preferred channel (e-mail, text, phone). Intelligent, two-way, automated communication solutions are the most effective method for achieving a higher level of member satisfaction, cutting costs (fewer call center employees are needed) and reducing delinquencies or fraud. What types of communications do Millennials want from you? Communication Preference • Bill pay reminder • Late payment reminder • Credit limit warning • Suspicious charges • Bill pay reminder • Late payment reminder • Credit limit warning • Suspicious charges • Credit limit warning • Suspicious charges • Bill pay reminder • Late payment reminder
  7. 7. ©2016 Fair Isaac Corporation. All rights reserved. 7 Gen-D: The appeal of credit unions for Millennials Insight: Gen-D members are heavily using their financial institution’s mobile app. Slightly over 90% of 18- to 34-year-olds have a smartphone, nearly 72% of them are using their primary financial institution’s mobile app, and 66% use the app several times a week (30% of them use the app once or more a day). Gen-D also prefers to receive mobile app notifications for credit limit warnings, notification of suspicious charges and bill payment reminders at rates 2–3x the overall population. Opportunity: Our research shows only 42% of credit union members are using their institution’s mobile app vs. 64% of customers at large national banks. This is likely due to more members falling in the 50+ age range, who are least likely to prefer using a bank’s mobile app. Having a great mobile app can attract Millennials at national banks who are likely to switch for lower rates. An app can also retain current members who want more convenient banking methods. Additionally, credit unions can attract savvy consumers and provide them an additional layer of defense against fraud with technologies such as consumer fraud controls that enable customers to set limits, stop card expenditures, and select the merchants, countries and services for which the card can or cannot be used via a mobile app. How important is mobile app technology to your members? Over 90% have a smartphone Nearly 72% use their primary financial institution’s mobile app 66% use the app several times a week And 30% use the app once or more a day Among 18- to 34-year-olds:
  8. 8. NORTH AMERICA +1 888 342 6336 info@fico.com FOR MORE INFORMATION www.fico.com www.fico.com/blogs LATIN AMERICA & CARIBBEAN +55 11 5189 8267 LAC_info@fico.com EUROPE, MIDDLE EAST & AFRICA +44 (0) 207 940 8718 emeainfo@fico.com ASIA PACIFIC +65 6422 7700 infoasia@fico.com FICO is a trademark or registered trademark of Fair Isaac Corporation in the United States and in other countries. Other product and company names herein may be trademarks of their respective owners. © 2016 Fair Isaac Corporation. All rights reserved. 4199BK_EN 09/16 PDF Get the digital tools and support you need to serve the Digital Generation When it comes to connecting with the Digital Generation, FICO provides unrivaled tools and insights to help you make smarter decisions that shape the future of finance. Learn more at www.fico.com. Gen-D: The appeal of credit unions for Millennials

×