Digital credit union targets recent college graduates

MSU Federal Credit Union knows college students. For 85 years, the $6.9 billion asset credit union in East Lansing, Mich., has served Michigan State University students, adapting as consumer behavior changed, the internet grew, and digital services entered the financial industry.

Now, MSU Federal has launched AlumniFi, a digital-only credit union marketed toward recent college graduates who want financial solutions that match their lifestyle. With the tagline “Graduate to Smarter Banking,” AlumniFi is targeted toward 22- to 35-year-olds taking their next steps in financial independence. Services grow with members as they advance in their careers and lives.

“We believe we can make an impact on their financial well-being as they're starting out after college,” says MSU Federal President/CEO April Clobes. “The transition from student to graduate is one of the biggest in an individual’s life. The change in the way they need to manage their finances is real, and many may be doing it for the first time on their own.”

When Clobes started at the credit union 26 years ago, she saw nearly every incoming Michigan State student open an account with MSU Federal. Consumers put a premium on a local institution, as digital services hadn’t fully broadened the reach of financial institutions.

“Fast forward to today and that’s not exactly what we’re seeing,” she says. “People 13 to 15 years old get accounts under their parents’ names and are given a debit card. When they come to the university, they stay with the institution they were with and stay connected to their parents’ account. Now, graduation is the time they’re getting their first account, they’re learning what a credit report is, they’re getting a new job, and they need a credit card.”

MSU Federal saw this change in consumer behavior and partnered with Nymbus, which provides financial technology solutions, to build AlumniFi and bridge the gap between college and financial freedom. Launched in January 2023 and available on Google Play and the App Store, AlumniFi provides a unique digital experience, messaging, and products.

Through fintech partnerships, AlumniFi offers accessible products, integrated debt management resources, and customizable financial education programs to help members create healthy financial habits. Among the features are charitable contribution tools, a cash flow function that allows users to track deposits and expenses, individual goals to work toward, and the ability to round up debit transactions to make incremental payments on their student loan debt.

There’s also a call center and in-app financial education offerings that answer questions about how to buy a first home and how to participate in an employer's 401K plan.

These resources are available to any MSU Federal member who downloads AlumniFi. However, the app is targeted specifically toward 22- to 35-year-olds. “There are digital tools or partnerships they might be seeking that the entire membership may not want, so we can specifically market message target this group of folks,” Clobes says. “We were missing capturing some of these people when they were at Michigan State as students, so we wanted to make sure we could capture them as they were graduating and moving into their full adult financial life.”

Appealing to recent college graduates means launching a marketing campaign that includes all social media sites as well as email, video, and search engine optimization. After Alumni’s initial entry to the marketplace, the credit union plans to expand the product to increase relevance to older alumni.

Clobes’ five-year target is for 50,000 people to be using AlumniFi. Further, the goal is to have about $30 million in balances by mid-2024.

MSU Federal sees AlumniFi as a long-term approach to attracting new members, adding relevant services, and increasing members’ financial well-being. Clobes suggests credit unions looking to implement a similar product adopt a similar long-term mindset.

“Know what your niche is, how you plan to market it, and what you want on your platform,” she says, suggesting credit unions be intentional about their messaging and branding. “It takes time to set it up, so it’s necessary to hone your idea on how you want to utilize this digital niche brand to grow your membership and provide relevant products and services.”