Millennials Need CUs—They Just Haven’t Met You Yet

Engage these consumers how and where they like to do business.

January 18, 2011

Want to attract millennials (a.k.a. generation Y), the 95 million-strong generation born between 1980 and 2000?

Engage them wherever they are, advises the Microsoft white paper, “Millennials Need You—They Just Haven’t Met You Yet.”

This white paper explores how millennials and boomers think about financial institutions personal financial management (PFM) tools. It also explores how consumers are (or aren’t) using online and mobile services to understand and better manage their finances.

Its findings:

• Millennials are immersed in technology, and financial institutions that succeed in capturing their attention will be those that relate to their world, enable technology for interactions, and provide a seamless experience across all channels—branch, Web, call center, mobile, and beyond.

• Large segments of boomers and millennials say they don’t plan to visit the branch. They go online for basic transactions, such as viewing account balances or paying bills. But there will be opportunities to provide services such as financial planning, investment, and insurance advice in the branch.

• Most millennials don’t use PFM tools but they’re interested in doing so. Millennials and boomers use PFM tools differently—Excel and other new online tools for millennials vs. boomers’ use of established tools such as Quicken.

• Millennials tend to track expenses as they happen, not after the fact, and are more focused on creating and managing a budget than their boomer counterparts.

• Nontraditional providers of financial information are getting millennials’ attention by meeting their need for on-the-go, relevant banking information.

PFM and aggregation services (i.e., Mint, Amex) are inserting themselves between the consumer and the financial institution. They’re telling consumers they no longer need to visit financial institution websites to get information and to manage their spending and investments.

• Mobile applications make PFM tools relevant to millennials. To incorporate PFM tools into their daily lives, millennials want access when they’re on the go.

Millennials generally are familiar with PFM mobile applications. Most (60%) have tried at least one such tool or service. Millennials will try new PFM mobile apps—if they’re positioned effectively. To resonate, these services should be free, and effectively consolidate accounts for easy viewing in one place.

Financial institutions will differentiate themselves and add long-term value by looking to the future to meet the millennials where they’re going, not where they are today.

Next: Five steps to attract youth

Attracting youth: Five steps

The Model Youth Program Guide from the Credit Union National Association outlines five keys to attracting and serving this age group:

1. Formalize your commitment. Youth programming that’s an afterthought will fail. Focus on millennials in your mission statement and strategic plan. Their needs and wants must influence the steps you take toward long-term growth.

Making youth an official priority—with visible support from the executive and board level—sends an important message to staff and members.

2. Woo them while they’re young. It’s easier and less expensive to win the hearts and lifelong loyalty of an 11-year-old than a 21-year-old. You’ll have little competition because few financial institutions care about serving them.

But if you wait 10 years, you’ll spend a fortune trying to outmuscle megabanks for their attention and their business.

3. Communicate. Listen to young members. Ask them frequently, as individuals and in focus groups, about their financial goals and habits.

Don’t worry about “speaking their language.” Although you want to be aware of their cultural preferences, you’re not trying to be their friends—you’re trying to become a trusted financial partner.

For that role, plain English, spoken respectfully, and a genuine interest in what they have to say are sufficient.

4. Provide pertinent financial services. Financial education delivered in a vacuum will generate the same reaction as algebra lessons that are too abstract: The student wonders, “When am I ever going to use this?”

Base your efforts on the financial services that young people need, want, and can use: saving and investment accounts, transaction services, and credit.

Young members are a low-risk and profitable group once they’ve been educated about their responsibilities.

5. Enlist their aid. Form a youth advisory panel to generate ideas for service design and marketing tactics. Open an in-school branch and give students training and the chance to teach their peers and families about saving, credit, and membership.

Hire interns to project your credit union’s youthful image. Reward them for successful recruitment efforts.

“Although youth development is critical for growth, most credit unions don’t have a comprehensive generational marketing plan,” says Bill McKenna, president of Marketing Partners, a credit union marketing firm.

Make attracting younger members a priority, develop a youth marketing strategy, and dedicate ample resources to support your strategy, he advises.