Report: Mobile Banking Innovations Help CUs Win College-Age Consumers

Credit unions (CUs) have made efforts to meet digital demands for members since the onset of the pandemic one year ago.

Investments in digital transformations have not only been necessary to help members complete their banking activities from the safety and convenience of home, but they have also been necessary for CUs in order to help attract younger members. This is a perennial challenge for CUs, as the average age of members is 47 years old. Research also suggests that CUs’ appeal among older consumers does not always translate into banking success with members’ adult children.

The March “Credit Union Tracker®” explores the latest in the CU sector, including an examination of how going digital and offering technologies that satisfy members of all ages are necessary for CUs to compete with financial institutions (FIs) and to maintain long-term success.

Around the Credit Union Landscape

With in-person interactions on college campuses limited due to the pandemic, some CUs are looking for new ways to bring younger members into the fold. A survey found CU membership is not being passed from one generation to the next, and digital banking and online outreach are not enough to attract younger members. The Pennsylvania State Employees Credit Union (PSECU) is one such CU that said it is using social media as its primary way to entice students by featuring campus ambassadors. The Harrisburg-based CU also operates ATMs and finance education centers on more than 20 campuses across the state, which act as recruitment tools for students.

CUs may have had a challenging 2020, but there were a few bright spots as well. A quarterly report from the National Credit Union Administration (NCUA) showed that commercial lending and mortgages were strong as interest rates hit historic lows. Lending ended the year with a 5 percent growth rate while the loan-to-share ratio fell by more than 10 percentage points year over year in the fourth quarter of 2020. The report also stated that deposits rose by almost 20 percent year over year during the same period as more members worked to save money during a financially turbulent year.

CUs are also working to meet the needs of small businesses now more than ever. The Federal Reserve’s Small Business Credit Survey revealed that 87 percent of small- to medium-sized businesses (SMBs) that applied for loans, credit lines or cash advances from CUs last year reported being satisfied. SMBs’ satisfaction with small banks’ loan offerings followed at 81 percent while big banks and online lenders lagged at 68 percent and 43 percent, respectively.

For more on these and other stories, check out the Trackers News & Trends section.

Service Credit Union on Taking the Digital Initiative To Attract Younger Consumers

Attracting younger members has been a challenge for many CUs, in part because CUs have been reluctant to invest in the technologies essential to winning them over. While there is no single answer for CUs to address this issue, considering cost-effective digital innovations and specifically tailoring their messages toward millennials could be part of the solution, Dan Clarke, senior vice president of Member Experience at Service Credit Union, told PYMNTS.

In this month’s Feature Story, Clarke discusses how CUs can partner with colleges and push past their risk-averse nature to embrace the technologies younger consumers demand.

To get the full story, download the Tracker.

Deep Dive: How Digital Strategies Can Help CUs Reach Consumers Across Generations

Nearly one-third of millennial and bridge millennial CU members say they would be willing to leave their CUs for financial institutions (FIs) that offer more innovative products and services. This fact cannot be lost on CUs as they strive to update their digital approaches.

This month’s Deep Dive explores the struggles that CUs must confront as they recruit younger members and why focusing on specific digital technologies could be a successful approach.

Read the full Deep Dive in the Tracker.

About the Tracker

The “Credit Union Tracker®,” a collaboration with PSCU, is your go-to monthly resource for updates on trends and changes in the credit union industry.