Credit unions bridge the generation gap

Financial institutions – and credit unions (CUs) in particular – face a generation gap.

Studies found that as recently as last year, less than half of Gen Z and Millennials surveyed were using the same financial institutions (FIs) as their parents in 2021. Young consumers, of course, need to be at the forefront and top of mind for FIs. as they craft their product and service roadmaps, Brian Scott, senior vice president and chief growth officer at PSCUsaid in a recent chat with PYMNTS.

After all, as these people move from school to career, grow and start families of their own, their financial needs change and their financial situation (hopefully) improves. Over the years, FIs can position themselves as “indispensable” partners throughout the stages of life. Building these strong relationships sooner rather than later also means that FIs can reduce customer churn and subscriber acquisition costs.

To bridge the generational divide, Scott said, “IFs — and credit unions in particular — should stop looking at someone’s age to define who they are.” Age is just a number, in other words, and what really matters is where someone is in their financial journey in life.

There are at least some indications that CUs recognize the need for a new approach. Scott recounted his own experiences lately, where he set up accounts for his preteen and teenage children with his own credit union; that CU is now sending materials (including educational materials) directly to Scott’s children.

Starting that level of engagement early equates to smart strategy, Scott said, down the line.

“If you’ve already been in front of these consumers for five years, it’s easier for them to ‘stay’ and feel engaged,” he told PYMNTS.

None of this is to say that CUs can divert their attention solely to members’ children.

He noted that many parents moonlight themselves with a variety of financial service providers – including neobanks and various FinTechs – and need to be kept in the loop too.

Fortunately, Scott said, traditional IFs have an inherent advantage over these digital-only newcomers. They can create a range of offers and engagement points across a variety of channels that create a connected experience. Neobanks, on the other hand, only have one online channel.

“The phone can be a great channel to interact and have a personal conversation. It can be text and then things can move to the branch on the way to creating that connected experience. It’s the same , no matter the channel,” Scott said.

UCs, he said, would be well advised to consider services and offerings that include burgeoning asset and payment vehicles, such as crypto. While UCs can’t actually hold crypto for members, he said, they can offer digital asset management services through third-party providers that allow them to buy, hold, and sell them – and even redeem reward points for crypto.

“The CU is a starting point – and there’s a trust in the credit union that ‘plugs’ us into these services,” he added.

Going forward, as UCs ​​move towards personalizing their messaging and product suites, they need to ensure that members interact with these FIs in a “fun” environment.

To that end, he noted that in some cases, UCs have held special events at branches such as food trucks (as well as educational programs) to engage with members. In other examples, UC has long held “shredding” days so members can safely dispose of sensitive documents — a personalized and convenient touch that a digital newbie simply can’t match.

“Engaging with these members face-to-face is a way to make it fun and build that trust,” he said.

——————————

NEW PYMNTS SURVEY FINDS 3 IN 4 CONSUMERS HAVING HIGH DEMAND FOR SUPER APPS

About: Results from PYMNTS’ new study, “The Super App Shift: How Consumers Want To Save, Shop And Spend In The Connected Economy,” a collaboration with PayPal, analyzed responses from 9,904 consumers in Australia, Germany, UK and USA. and showed strong demand for one super multi-functional app rather than using dozens of individual apps.

Leslie M. Gill