In the United States, the average credit union customer is 47 – in Canada, 53. Legacy members are entering a phase of life in which their spending may be more restrained. To continue growing, credit unions must seek new ground: The Millennial consumer.
Millennials, those who are approximately aged 18 to 35, tend to be financially conservative owing to uncertainty created by the Great Recession and other factors. They are unafraid to defer old-fashioned life milestones in pursuit of stability and to make room to break new ground in what they buy and how they buy it compared to previous generations. Compelling data shows they are well worth credit unions developing innovative ways to cater to them.
- They are already the largest demographic in the U.S. workforce;
- They command about $200 billion in annual purchasing power;
- They are deeply concerned about their prospects and the future.
Credit Unions Should Seek to Tap the Millennials’ Digital Ecosystem
According to Pew, 92% of Americans aged 18-29 and 88% of those 30-49 own smartphones. Cellphone penetration is 100% among the 18-29 set. This is compelling data credit unions can use to make an enduring connection with younger members. However, sweeping changes in the broader landscape of technology have come about in recent years that go far beyond the limits of the smartphone conversation.
Successfully engaging with Millennials requires meeting them on their terms, offering solutions that fit within their existing digital lifestyles. There is ample evidence of the types of brands/service providers with which this group has forged relationships (Uber, Venmo, Netflix, Amazon)- all leverage technology to simplify daily tasks that earlier generations are comfortable addressing in old-school offline ways. Credit unions need to pivot in order to capitalize on continually evolving technology and consumer preferences in order to cement "top of app status," just as they used to strive for top of wallet.
New Avenues for Top of App Interchange Revenue
Capture the cable cutters. The migration Millennials are making from traditional cable and satellite television services to online services such as Sling, Hulu, Netflix and Amazon Prime presents credit unions with an expansion of service providers they can engage for incentive programs. Positioning as the “top of app” card of choice for payment within these service platforms represents millions of dollars in potential revenue.
Play their games. Xbox Live, and Playstation network are both examples of subscription based gaming services that Millennials love and we will continue to see grow. When younger credit consumers decide what card to use for this type of purchase, they might consider the basics, like their balance or APR, but what factor will really stand out to influence their decision? Beware: It won’t be the usual top of wallet considerations of their elders.
Change along with them. There is a shift in thinking both from a financial sense as well as a consumer’s perspective. We are seeing the birth of digital consumerism. This doesn’t only mean having a branded mobile app. It also requires being on the lookout and ready to implement the latest available technology innovations to drive your "top of app" objectives. It requires adapting a state of mind: The willingness and competence to recognize younger members’ needs and address them respectfully on their level.
Credit unions stand in control of their own destiny for securing top of wallet status going into the future. They can choose to make a commitment to make sure they're delivering the latest technology innovations that align to their size, budget concerns and needs of their members or they can wait and see what happens. Which path will your credit union choose?