As credit unions look to attract new members and peak borrowers in the future, they should increasingly think “young” and “Hispanic.”
So says Kristina Grebener, CUNA’s director of editorial staff and strategic development, addressing third-year CUNA Management School students on the University of Wisconsin campus.
Credit union members tend to be older than nonmembers (47.4 years vs. 45.9 years), she says, citing statistics from CUNA 2011-2012 National Member Survey. As a result, “Credit unions need to find ways to attract peak borrowers,” she says, those ages 25 to 44.
One-third (33%) of credit union members fall into this category (down from 42% from 2008 to 2010) vs. 36% of nonmembers. And only 9% of credit union members are age 18 to 24 (vs. 14% of nonmembers), CUNA’s National Member Survey reports.
What’s a CU?Third-year CUNA Management School students ask residents of Madison, Wis., why they bank where they do and gauge their knowledge of CUs.
In addition, nearly 70% of nonmembers ages 18 to 24 are “not at all familiar” with credit unions—the highest rate of unfamiliarity among all age groups. “Your credit union needs these young consumers for future loan and membership growth,” Grebener says.
One way to reach young consumers is to target Hispanic Americans, she adds. This group accounts for 16% of the U.S. population, with a median age of 26.8 (vs. 39.5 for white, non-Hispanics), according to CUNA’s Environmental Scan. Plus, 40% to 50% of Hispanics don’t have a relationship with a traditional financial institution.
What’s certain is there’s room for improvement: Credit unions’ membership growth rate hovered at 1.3% in 2010. “That tells us we’re not relevant,” Grebener says. “If we’re not growing, we’re rotting.”
Bill Merrick is deputy editor of Credit Union Magazine. Follow him on Twitter via @CUMagazine.