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Digital convenience: The new imperative to compete for new members

May 11, 2016 -- Digital convenience is the new “must have” for credit unions to compete for new members. A recent article by The Financial Brand titled “Top 3 Banks Get Majority of New Customers” reports the following:

“‘Digital convenience’ helps the top three banks acquire more new checking accounts than the next 17 largest banks combined. To win the battle for a smaller number of checking accounts ‘in play’ requires a better understanding of consumer profiles, attitudes, behaviors and trends.”

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According to a recent article by the Credit Union Times, nearly 40% of millennials plan to switch financial institutions in the next 12 months. Learn how mobile strategies can help your credit union capture your share of these consumers.

Date: May 17
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Based on the 2016 Omni-Channel Shopper Survey of U.S. consumers, the article emphasizes four key factors financial institutions should focus on to build a stronger checking acquisition strategy:

  • Shopper segmentation
  • Millennial opportunity
  • Convenience redefined
  • Being ‘distinctive’

To learn more about each of these four areas and why financial institutions should focus on them, read the full article. For now, though, let’s briefly discuss the second of these four areas, millennial opportunity, and why there’s good news for credit unions.

The term “millennial” gets thrown around a lot these days, but this young audience is currently having and will continue to have tremendous impact on the financial landscape. The need for financial institutions to provide “digital convenience” to capture this share of the market is already apparent. For example, CCG Catalyst reported the following statistics earlier this year about millennial banking needs:

  • 84% want immediate accessibility to their money after depositing.
  • 78% want customer service regardless of in person or on the phone.
  • 24% want fast loan or mortgage approval.

Although this is not a complete list of everything millennials want in their banking relationships, just these few stats remind us that if we don’t provide this audience with the digital tools they want and expect for easy account management, we could lose out on our share of this market.

But I’m not one of these “top three banks” that seem to be getting the majority of these new customers, you may be thinking. How can I compete? Fortunately, The Financial Brand’s article pointed out the following:

“The good news for banks outside the top 3 is that millennials with a checking account at a national bank are more open to moving. Sixty-three percent of millennials who have their primary checking at a national bank also said they were open to switching that relationship, compared with only 51% of millennials at large regionals.”

And there’s more good news, especially for credit unions. According to a study by CUNA Mutual and TruStage, 69% of millennials ages 18-34 with household incomes ranging from $25,000 to $100,000 were open to joining a credit union. Unfortunately, the study also found that millennials said they just don’t know much about credit unions, which means we need to work harder to educate this group of consumers about the value of credit unions.

As we work to better educate the millennial audience and understand consumer profiles, attitudes, behaviors and trends, we’ll find that our ability to acquire new members depends on our ongoing investment in digital channels and offering that “digital convenience.”