9 Reasons Millennials Are Joining Credit Unions (And Leaving Banks)
July 27, 2015
July 27, 2015
Last year when credit union membership broke the 100 million barrier, people born from 1980 to the early 2000s constituted 28 percent of the members. These Millennials have turned to the credit union industry for a variety of reasons, according to Samantha Paxson, Chief Marketing Officer, CO-OP Financial Services (www.co-opfs.org), a Southern California-based financial technology provider to credit unions since 1981.
“The overarching appeal for Millennials is the cooperative, non-profit tradition of credit unions and the industry’s emphasis on the betterment of society,” says Paxson. “These modern consumers are not inclined to follow the financial path of their parents. Instead, they want to encounter a brand experience and are discovering the human side of finance provided by credit unions.”
Paxson offers nine specifics that are contributing to Millennials migrating to credit unions:
- The banking crisis that began in August 2007 led many Millennials, and Americans of all ages, to consider financial services alternatives. Credit unions and their positive social mission are the antithesis of the banking industry. The credit union movement seeks to add value, not extract value from individuals and communities.
- Since their beginning in 1908, U.S. credit unions have been committed to philanthropy (a core Millennial tenet). They are not-for-profit institutions with a focus on improving the financial well-being of their members. This even extends to supplying financial literacy resources so young people can be as savvy financially as they are technologically.
- Credit union members generally benefit from higher returns on savings, fewer fees and lower rates on loans, including four-year used auto, five-year new auto, 48-month personal and 15-year home equity. Millennials appreciate consumer-friendly pricing, whether they’re just starting college, beginning their career, buying a car or home, traveling or seeking a business loan.
- Credit unions are a great place to start building credit. Credit union loans grew 13 percent between the start of the financial crisis and year-end 2012. Bank loans increased only 3 percent during that five-year period.
- Credit unions are no longer the little bank down on the corner that parents of Millennials used to visit. The 3,500 credit unions that are serviced by CO-OP are part of the largest credit union-owned ATM network in the country (30,000 surcharge-free machines) and the third largest branch network (larger than B of A), offering brick and mortar branches in all 50 states.
- Credit unions are renowned for customer service. The American Customer Satisfaction Index (2012): banks scored 77; credit unions 82 (out of 100). And going back a little further, the American Banker newspaper used to conduct an annual consumer satisfaction survey of banks, thrifts and credit unions. Credit unions received first place recognition for 21 consecutive years until the publication stopped doing the survey in 2005.
- Millennials view credit unions as a trusted resource for financial advice, a partner that specializes in member service. Here’s one example: https://co-opcreditunions.org/people/kyle-coleman/.
- Millennials don’t trust banks because they are too big. The four largest U.S. banks (J.P Morgan Chase, Bank of America, Wells Fargo and Citibank) each have more assets than the entire non-profit credit union industry ($1.17 trillion), which returns its earnings to its members.
- The modern credit union supplies its members with the latest in mobile/digital banking services, which are quite often superior to banks. These products, which enable immediate access to accounts anytime, anywhere, are designed for Millennials, including mobile apps, digital wallets and on-line bill pay products. And if their technology is ever unable to suffice, they pick up the phone and are able to speak to a human being on the other end.
Strategic Link is the NWCUA’s wholly-owned service corporation, using the power of aggregation to provide the Association’s member credit unions with exclusive, high-quality, competitively-priced products and discounted services. Contact Director of Strategic Partnerships Craig Reed at email@example.com today to find out how Strategic Link can help your credit union save money while meeting its goals in 2015 and beyond.
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