Report
469
Number
Dec 28 2018

Keeping Pace with Expectations: The Quest to Attract Younger Credit Union Members

What Filene’s research says about understanding young adults’ financial needs.

Taylor C. Nelms
Taylor C. Nelms
Senior Director, Research
Filene Research Institute
Report Number 469

Executive Summary

In this curated research bundle, we tackle the challenge of understanding younger consumers and what they expect from their financial service providers. Financial institutions increasingly serve younger consumers, and attracting and retaining young members will continue to be a driver of growth for credit unions. Credit union leaders must therefore familiarize themselves with young consumers’ evolving expectations and unique financial challenges.

Why these research reports?

There are more than 70 million Millennials (born 1981-1996) and already more than 86 million children and young adults who will comprise a post-Millennial generation (born after 1996). These young people will form the core of credit union membership in the future. In fact, data from the Federal Reserve’s 2016 Survey of Consumer Finances suggest that credit union members already tend to be slightly younger than bank customers and that young people are, on average, more likely to use credit unions than older consumers.

There is great variation within these cohorts—economic inequality, social and cultural diversity, and political divides—but Filene research shows that they are also united by a set of shared experiences with money and technology. Most young adults came of age just after the 2008 financial crisis and in the depths of the subsequent recession. Many of them were introduced to new digital and mobile technologies like the Internet or the smartphone in their childhood or adolescence. These experiences have shaped their approach to financial services and expectations of financial service providers in profound ways.

What are the credit union implications?

Credit unions looking to better serve young adult members and more effectively attract and retain potential young adult members should consider the following:

  • Young people face unique economic and financial challenges. In 2018, young people are relatively worse off—in terms of income, savings, indebtedness, and job security—than their parents and grandparents were at the same point in their life cycles. Focus your offerings accordingly: student loan assistance and credit-building programs, budgeting and income-smoothing tools, financial counseling, childcare and healthcare support, and renters or unemployment insurance.
  • Millennials’ online financial discourse is predominantly negative; the most expressed emotion is anger, followed by fear. Utilizing Millennials’ own language about money in marketing communications may prove effective.
  • The post-Millennial generation, or Gen Z, is young and still developing financial habits and norms. Yet they may be the most diverse and highly educated generation in US history. Consider emphasizing the pro-social, non-exploitative nature of credit unions while providing financial literacy and personal finance tools that demonstrate the institution’s commitment to its members.
  • Invest in ease of use! Younger members want a mix of online and in-person touchpoints, but they don’t want to expend much effort to bank with their credit union. Payments is often the gateway to other financial services!
  • Diversify your board. Credit union board members have long tenures. But perhaps the most straightforward way credit unions can put young members front and center is by including them on their boards of directors.

Filene Research Institute has published nearly 500 research reports over three decades. The archive is both deep and wide. Single studies give us important data points about a given phenomenon. Putting multiple studies into conversation, however, allows us to connect the dots, corroborate our findings, and track trends over time. So, as we revisit Filene’s archive, we are assembling curated collections of research reports on selected topics, providing you with a more comprehensive and strategic overview and giving you the resources that you need to make evidence-based business decisions. If one study offers a window onto what’s happening in the world, these collections will give you a foundation on which to build the whole house.