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(From American Banker) – The future of credit unions depends on attracting young members, and in a world where lack of financial education often leads to banks as the default financial institution for students, the student recruitment strategies of credit unions can make all the difference for their success. That’s because young members are likely to remain loyal to the credit union for the rest of their lives.
The problem: banks’ generally larger marketing budgets make them more visible, which helps drive customers of all ages into their arms. Students, who often take cues from their parents, tend to choose banks, with many not realizing they are eligible to join a credit union. According to a survey by GoBankingRates, 26% of people ages 18 to 24 use credit unions, while 36% of people in this age group opt for national banks such as Chase, Bank of America, U.S. Bank and Wells Fargo. Older people are much more likely to choose credit unions: of those surveyed who are 65 and older, 60% are members of a credit union.
“Many credit unions face an aging generation,” said Spencer Carver, Assistant Vice President of Select Employer Group Development at Mountain America Credit Union, based in Sandy, Utah. “With several financial disruptors such as FinTech industries, Mountain America must be able to provide at minimum equal or greater value to students to attract them to the credit union.”
In an effort to attract students, some credit unions have introduced creative campaigns to appeal to a younger audience. For example, CCU Florida, based in Titusville, Florida, recently launched a program in partnership with Alyssa Carson, an aspiring astronaut who wants to be the first woman on Mars; JT Hassell, a young NFL player committed to supporting the mental health of youth; and Emily Zeck, a young entrepreneur with her own swimwear line. All are part of the newly launched “321 Financial Liftoff” educational series that teaches financial literacy and supports younger generations’ financial needs. The website also features informal, approachable videos that educate about credit unions in general and CCU Florida in particular, further encouraging student participation and increasing awareness about the potential value of credit unions for young members.
Working with community partners allows credit unions to make connections through shared interests and experiences, which often builds trust between credit unions and a younger demographic.
“In my experience, students, especially at the college level, are seeking to align with organizations that have their interests at heart. This can manifest itself in several ways from working with students on scholarship or intern opportunities, to areas of community involvement or charitable giving,” said Carver. “As our efforts align with theirs, this helps to not only pique their interest, but it helps create greater loyalty to Mountain America.”
Similarly, Clearview Federal Credit Union, based in Moon Township, Pennsylvania, also reaches students through community partners. “We’re the official credit union of the University of Pittsburgh athletics and the University of Robert Morris athletics, and those partnerships are near and dear to us here. In addition to Zogo and the other financial education that we offer, student members have the opportunity to apply for one of ten scholarships that we offer at $1,500 a piece, and they are awarded annually,” said Lisa Florian, Senior Vice President, Member Experience, Digital Strategy and Marketing at Clearview Federal Credit Union.
One factor that can make banks more appealing than credit unions to a younger audience is their digital presence, but many credit unions are launching online platforms to make their services and financial information more accessible. Zogo is one example of credit unions’ efforts to educate online: the app partners with over 200 financial institutions, many of them credit unions, to promote financial education and spread information about how to manage money. “It’s a gamified app that makes financial literacy very approachable for students,” Florian said.
Maine State Credit Union is also shifting in the digital direction to attract teens. “We are trying a new model that focuses on technology and digital options to attract a younger demographic,” said Ariel Carron, Digital Marketing Specialist at the credit union, which is based in Augusta, Maine.
In addition to learning financial information online and through apps, teens also acquire much of their financial knowledge from their parents, which is why connecting with parents is an important element of attracting students.
“We approach students and teenagers in a different way to be relevant to both the student and their parents,” said Jake Hall, Marketing Strategies and Analysis Manager at America First Credit Union.
“With the students looking to their parents, we’re trying to speak both to the parents and the students, which is extremely important to let the parents know that we have the education available for their children,” said Florian.
Credit unions’ friendlier nature is also something many highlight in their recruiting of new members. “You get a more personal connection. It’s Mainers serving Mainers. We are growing, we are expanding, we are focusing on the local demographic, the personal aspect, and the community,” Carron said. “Community focus, technology focus, and the personal connection is definitely something that would help and attract a younger demographic.”
In part due to this personalization of the banking experience, many credit unions have high member retention rates and satisfaction scores. “We often say that once you’re a member of Clearview, you’re a member for life. Over 40% of our members have kept us as their financial institution for 10 years or more,” said Florian.
Although students make up only a fraction of credit unions’ members, attracting students is an investment in the institutions’ futures, executives say.
“By targeting students at a young age, we create relationships that have the potential to span their lifetime,” said Hall. “We give them the tools to begin their financial journey on the right foot.”
“[Students] reflect not only future members, savers and borrowers, but also potential employees and the future of our nation’s economy. We create trust when we help young people establish healthy and responsible habits with their finances early on,” Carver said. “By continuing to serve them as different life milestones arise, they’ll become lifelong members.”