NEW YORK (10/22/14)--It might be easy to state that millennials don't like big banks, Vince Passione, columnist for Inc. magazine wrote in a recent article, given that polls show a handful of the largest U.S. banks consistently rank at the top of the generation's most-hated brands.
But it's not only animosity that's driving millennials toward credit unions and away from banks.
Credit unions, explains Passione, CEO/founder of LendKey, a cloud-based technology platform for lenders and investors, have evolved into the types of tech-savvy and versatile financial institutions that appeal to millennials.
For example, South Carolina FCU, North Charleston, with $1.3 billion in assets, has created fee-free deals for those age 25 and under that act as "Oops Refunds," according to Passione.
The product allows the young members to have one free-fee refund per quarter, a service that acknowledges the growing pains associated with learning about personal financial management.
Passione also noted PSCU's recent KnockOut event, which fosters tech-innovation in the credit union industry through a daylong challenge that pits teams in a competition to create the best technology-based financial services product (News Now Oct. 15).
And even some larger credit unions have already adopted the recently introduced Apple Pay.
"Innovative tech products and creative programs like these are drawing millennials away from big banks," Passione wrote. "And as community-based, member-owned businesses, credit unions are perfectly positioned to appeal to millennials."
As millennials are estimated to number 86 million, which is 7% larger than the baby-boomer generation, the up-and-coming generation will have a substantial impact on the financial services industry, Passione said.
Fortunately, credit unions excel in the ways that are important to millennials: service, ease, convenience, value and education.
According to Passione, 81% of millennial credit union members say their institution offers an "outstanding customer experience" compared with only 59% of bank customers.
"By focusing on millennials, credit unions are learning and adapting to ensure they are on the cutting edge of banking technology," Passione said.