NOT OF­FER­ING DIG­I­TAL ISN’T AN OP­TION

Mil­len­ni­als aren’t the only ones who want con­ve­nience — ev­ery­one, re­gard­less of age, wants it. Where age comes into play is just how some­one de­fines what ‘con­ve­nience’ is.

Credit Union Journal - - Contents - BY JON OGDEN

If credit unions want to cap­ture a new gen­er­a­tion of mem­bers — and build re­la­tion­ships with them through their prime bor­row­ing years — they’re go­ing to have to learn to serve those mem­bers in a very spe­cific way.

IF YOU’VE BEEN fol­low­ing the anal­y­sis on the fi­nan­cial in­dus­try over the last sev­eral years, chances are high that you’ve seen many ar­ti­cles talk­ing about bank­ing and mil­len­ni­als. In one sense, this is ad­mit­tedly a fraught topic. Af­ter all, it’s not as though mil­len­ni­als want the con­ve­nience of dig­i­tal bank­ing and older gen­er­a­tions don’t. The truth is that ev­ery­one wants what is most con­ve­nient. Age has noth­ing to do with it.

And yet, data from a range of sources shows that those who are un­der 30 have dif­fer­ent pref­er­ences for bank­ing com­pared with those over 60. And these dif­fer­ences must be taken into con­sid­er­a­tion when ap­peal­ing to a range of mem­bers.

For starters, 58 per­cent of mil­len­ni­als are in­ter­ested in their credit union “proac­tively rec­om­mend­ing prod­ucts or ser­vices,” com­pared to 46 per­cent of those over 55, ac­cord­ing to Ac­cen­ture. Based on these num­bers, we get the sense that younger au­di­ences see service as some­thing that oc­curs in an app as op­posed to some­thing that oc­curs in a branch. It’s a shift in perspective that credit unions must be more aware of since it means that a fo­cus on the branch is likely to pay fewer div­i­dends with mil­len­ni­als than a fo­cus on mo­bile bank­ing will.

In this same vein, 92 per­cent of mil­len­ni­als say they would se­lect a fi­nan­cial in­sti­tu­tion for its dig­i­tal ser­vices. This mir­rors the re­search show­ing that most mil­len­ni­als choose the na­tion’s big­gest banks, with 55 per­cent say­ing they pre­fer one of the top three — even though mil­len­ni­als si­mul­ta­ne­ously ad­mit that they dis­like the big bank brands. In other words, mil­len­ni­als want to bank else­where, but the dig­i­tal of­fer­ings they get with the big play­ers keep them loyal.

What this means is that, above all, mil­len­ni­als are think­ing about the dig­i­tal ex­pe­ri­ence. This fact puts credit unions in a tricky spot be­cause they sim­ply don’t have the bud­get to pro­duce an app that can com­pete with the likes of Chase, Wells Fargo, and Bank of Amer­ica. How should credit unions pro­ceed?

One op­tion with merit is to fo­cus on do­ing one or two things re­ally well. For in­stance, maybe you can’t of­fer the best over­all app, but you can make cer­tain that the process for sign­ing up for an auto loan is per­fectly smooth. And that may be suf­fi­cient for now — even though you will ac­knowl­edge that your app might not be con­sid­ered the pri­mary fi­nan­cial app for most of your users.

An­other op­tion is to find an af­ford­able dig­i­tal part­ner that can help you im­prove your app in unique ways, set­ting you apart from the crowd. Specif­i­cally, you might look for com­pa­nies that have pro­duced features and apps that have re­ceived pos­i­tive feed­back from end users. You might also find ways to com­bine features via a range of APIS, cre­at­ing an ex­pe­ri­ence that you can call your own while si­mul­ta­ne­ously not drain­ing your en­tire bud­get.

What­ever you choose, it’s clear that the fu­ture of bank­ing lies in the dig­i­tal ex­pe­ri­ence — par­tic­u­larly the mo­bile ex­pe­ri­ence. Af­ter all, mil­len­ni­als spend 35 hours a week with dig­i­tal chan­nels. (50 per­cent more than the av­er­age of the other com­bined de­mo­graph­ics.) If you don’t priv­i­lege the dig­i­tal ex­pe­ri­ence above other chan­nels, the chances of you re­tain­ing the next gen­er­a­tion are slim. The an­swer starts with shift­ing to a dig­i­tal mind­set.

Jon Ogden is di­rec­tor of con­tent mar­ket­ing for MX, a provider of data-driven money-man­age­ment solutions based in Lehi, Utah.

“It’s clear that the fu­ture of bank­ing lies in the dig­i­tal ex­pe­ri­ence — par­tic­u­larly the mo­bile ex­pe­ri­ence. Af­ter all, mil­len­ni­als spend 35 hours a week with dig­i­tal chan­nels.”

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