Credit unions are a distant concept for most millennials, according to a new study released by CUNA Mutual Group and its consumer brand, TruStage.
Published Wednesday, the study of millennials ages 18-34 with household incomes ranging from $25,000 to $100,000 found 69% were open to joining a credit union, but only 25% have and only 14% keep their primary accounts at a credit union. The largest reason for this, the study found, was that millennials said they just don't know much about credit unions.
"Most millennials aren't financially literate but they're willing to ask for help," the study said, noting research found only 8% could answer five basic financial literacy questions correctly.
However, money is important to millennials, the study found. Sixty-six percent worry about their finances on a daily basis, and 84% said they would like advice or guidance on financial decisions. And when it comes to defining success, millennials ranked financial stability as the third most important factor, after having a good relationship with a spouse or partner and raising good/happy kids. "Strong relationships with God" and Happy/content with who they are" ranked lower.
"Millennials tend to be optimistic – though worried about their finances; are more likely than older consumers to purchase a car or home in the near term (especially if they were parents); are attracted to mobile banking and know little about the credit union difference," the study reported. "Millennials also know that their financial acumen is limited and are looking for help in this area. These characteristics, plus the fact that millennials recently overtook Generation X as the number one generation in the workforce, make this segment an invaluable credit union target."
According to the study, credit unions should do four things to woo more millennials:
1. Offer more financial education and advice.
"Education in the following areas will nicely parallel millennials' short- and long-term needs: Private student loans, debt management and consolidation, home buying, small business assistance, retirement and long-term financial planning," according to the research.
Credit unions should also simplify their products and services to match millennials' product comprehension levels, it added.
2. Offer better technology.
Millennials expect an omnichannel experience and aren't afraid to do virtually everything online.
"Credit unions must make critical investments in online functionality, minimize or eliminate the need to come into a branch for most – if not all – functions, and meet the demands of millennials' busy lives with things like nontraditional branch hours and locations (for instance, a mini branch at the grocery store).
3. Get real about social media.
"Credit unions should invest in the channels that millennials use and make a full-fledged commitment to understanding and better delivering products, services and information through social media," the study said.
4. Promote what makes credit unions unique.
According to the research, millennials are open to the idea of bringing their business to a credit union but few really understand why they should – other than a vague awareness that they might get better rates.
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