A recent study from Deloitte describes a radical shift that has taken place within the U.S. population over the past 50 years: it has become increasingly diverse, especially among younger generations.
Millennials, now representing 30% of the population, are the most diverse generation in U.S. history, with roughly 44% consisting of ethnic and racial minorities. In comparison, only 25% of baby boomers belong to ethnic and racial minority groups.
Hope Schau, Eller Professor of Marketing at the University of Arizona and a fellow at the Filene Research Institute, says it’s more important than ever for credit unions to “meet their members where they are” both financially and socially.
This means providing messages of inclusion, she says. “That shouldn’t be too hard because credit unions have always been about inclusion.”
This generation also needs help managing a significant debt load, Schau adds. “Higher education has cost this generation a lot of money and we need to help them manage the financial insecurity that comes with that.”
High debt levels have caused many millennials to wait longer to buy homes, the Deloitte survey indicates. Between 2007 and 2017, the percentage of homeownership fell from 68% to 64%, and the median age of first-time homebuyers increased to 32 years from 31, a 3% rise.
Schau calls credit unions “uniquely local,” and says they should remain true to their roots. She grew up using Orange County Teachers Credit Union, which is now SchoolsFirst Federal Credit Union.
“They were phenomenal on messaging to my father, who was a teacher, telling him, ‘We’re here to help you with your journey, which is unique and different from other peoples’ journeys, and these are the ways we’ll make sure you reach your financial goals.’”
Community building comes naturally to credit unions, Schau says. “I’ve worked with defense-related credit unions, and supporting the American way and patriotism is just part of their mission. People respond to that, and it creates a communal space that’s difficult for other businesses to replicate. That’s a competitive advantage for credit unions.”
While digital services are mainstream, Schau says credit unions have to compete on the digital landscape while retaining what is unique about them in consumers’ eyes.
“You have to deliver that digital experience, but you can’t lose sight of your unique message, that is telling members, ‘We’re very much a part of your individual consumer journey in this diverse world.’”