Not surprising, Millennials have different priorities and expectations from a financial institution than older generations do, according to a recent report compiled by a CA-based payments firm, Marqeta. Millennials, recognized as the first generation to grow up or come of age with digital technology like cell phones and the internet, are comfortable using modern technology, and have come to expect its availability for use in their every-day banking needs. Baby Boomers, on the other hand, place less importance on having the newest and most cutting edge tech, instead preferring a more personable and hands-on on approach in their banking. The challenge for credit union executives is how to service these divided members.
Deciding how to manage the contrasting requirements of strong digital banking technology versus the value of a personalized banking relationship can place any credit union in bit of a conundrum when it comes to spending marketing dollars and where best to focus efforts on member satisfaction. Of the Millennials recently surveyed, close to half (49%) responded they would consider switching to a digital-only financial institution, foregoing the need for human interaction when banking. Additionally, Millennials were found to be twice as likely as Baby Boomers to say that a good mobile app was the most important benefit of a financial institution's offerings. Ironically Baby Boomers were twice as likely to say an in-person relationship and presence was the most important benefit.
Millennials, not looking for loyalty or personalized service with their banking, would even consider banking with a FI affiliated with a social media or on-line entity such as Google or Facebook. Digital-only banking is definitely gaining popularity, originating in Europe initially, many have started to gain a foothold here in the U.S. Referred to as Challenger Banks, they generally offer only basic services such as checking and savings account and payment and money transfer services, and appeal to Millennials, as their transactions are completed fast, often immediately and convenient.
Credit unions are known for The Credit Union Difference, espousing personalized service, attention to detail, and generally conveying a feeling of value for its members, which undoubtedly appeals to the Baby Boomer members. Further illustrating their differing banking needs, the study also found that 42% of Baby Boomers had written a check for something other than rent or utilities in the last month, while 48% of Millennials couldn’t remember the last time they wrote a check for something other than those things.
The banking needs and expectations of Millennials are clearly different than those of Boomers, and much more technology driven. Loyalty to a credit union, or financial institution, is not important to them, with only 17% of those polled saying they wouldn’t consider changing, while another 40% said the reason they don’t change for a better financial institution is simply because it is too much work.
The challenge facing credit unions today is to balance providing excellent member services, while remaining competitive in their technology offerings -- thus appealing to both ends of their member spectrum. Boomers, while appreciative of the personalized service, may find themselves warming to new technology with the right user-friendly software in place. Partnering with a provider that gives you the ability to seamlessly offer cutting edge technology with an efficient and easy to understand user interface is important. It not only keeps your credit union competitive and relevant, but allows you to then focus on offering stellar member services, hopefully bridging that great member divide.