As inflation looms and costs rise, credit unions are strategically tapping into technology, data analytics, and better loan offerings to attract the attention of the younger generations, particularly millennials and Gen Z. These digitally inclined members demand not just competitive loan terms, but also a seamless, convenient, and personalized banking experience. By skillfully combining these elements, credit unions are emerging as strong contenders in the quest to win over millennial and Gen Z business.
A Secret Weapon: Better Loan Terms
Compared to larger financial institutions, credit unions have a distinct advantage in lending operations. Based on research by PYMNTS and PSCU, it was revealed that almost half of millennials and bridge millennials are willing to switch banks if a financial institution can offer them superior loan terms.
This statistic underscores the inherent strength of credit unions — their not-for-profit structure — that enables them to provide more favorable loan terms compared to traditional banks. Credit unions have the potential to showcase their competitive edge through targeted marketing campaigns that highlight cost-saving benefits such as lower interest rates and flexible payment options.
Innovations such as web loan applications also improve your members’ web experience while increasing loan approvals.
Data-Driven Differentiation
For credit unions that have cracked the code, data is their compass. These institutions are using data analytics to tailor offerings and loan terms, resulting in enduring member relationships. Fine-tuning lending services at an individual level is critical. The traditional method of flooding members with a bunch of offers and hoping one of them will stick doesn’t work anymore. Emphasize personalized interactions over the dated method of inundating customers with multiple offers.
Technology as a Catalyst
With 77% of Americans using credit unions for their primary financial needs expressing high satisfaction, credit unions are using technology to cater to the evolving needs of all age groups.
To sustain this momentum, credit unions are integrating technology into their core operations. A culture of continuous innovation is being nurtured to meet the growing demand for digital solutions.
Innovate to Retain and Attract Gen Z Business
Retaining existing members and attracting new ones is a dual challenge for credit unions. As per PYMNTS research, over 80% of self-identified highly satisfied financial account holders are open to switching providers in search of innovative solutions. The challenge intensifies when targeting millennials and Gen Z, as only 5% and 4% respectively are credit union members.
This is why credit unions are not and should not rest on their laurels. Credit unions are now expanding their product and service offerings. Investment in real-time and peer-to-peer (P2P) payments is on the rise, with 60% of credit unions reporting such investments in 2022, a significant increase from previous years.
According to a survey, only 6% of Gen Z preferred to visit a physical branch, while the majority elected to use mobile options. In response to the increasing preference for mobile banking, credit unions are actively improving their mobile banking offerings.
Meeting Lending Needs through Technology
Technology is reshaping not only the banking experience but also lending strategies. A survey highlighted that 26% of credit union members are likely to borrow from lenders outside their institution based on loan terms. As younger members often bear higher debt burdens, credit unions dedicate significant investments to streamlining loan onboarding processes.
Around 53% of credit union executives are making substantial efforts to reduce onboarding times for prospective borrowers. These endeavors are aimed at creating a frictionless lending experience that resonates with the unique needs of millennial and Gen Z borrowers.
IMSI Web Loan Applications: A Step Ahead
Among the many available tech solutions, IMSI’s Web Loan Applications stand out as a crucial tool. With a focus on user-friendly design and seamless integration, this service not only supports the credit union’s brand but also improves member satisfaction and optimizes the loan approval processes, making it a game-changer for serving millennials and Gen Z.
At IMSI, we’re acutely aware of the changing dynamics of the financial world. Our Web Loan Applications service isn’t just about technology; it’s about enhancing member experiences and boosting loan approvals. Seamlessly integrated with KeyStone, it’s designed to align perfectly with your credit union’s vision of innovation.
Adapting to the Evolving Financial Landscape to Win Millennial & Gen Z Business
As credit unions adapt, technology, data analytics, and innovative solutions are their chosen tools to forge connections with millennials and Gen Z. The synergy of seamless banking experiences, competitive loan terms, and personalized strategies is laying the foundation for a collaborative future. With digital offerings and solutions, credit unions are not only meeting expectations but also redefining themselves as essential financial partners for these discerning generations.
If you’re curious about how IMSI can empower your credit union’s success and meet the expectations of younger members, we invite you to reach out and connect with us. Explore our range of services designed to take your credit union to the next level.
