Are you a credit union looking to tap into the potential of millennials and Gen X? Look no further! In this article, we will explore how you can attract these prospective members while driving loyalty and increasing your bottom line. With their increasing purchasing power and desire for convenient experiences, it is crucial for credit unions to design effective strategies that cater to the unique needs and preferences of millennials and Gen X.
We’ve previously discussed Gen Zers and Baby Boomers in this two-part series, so be sure to check out the insights on those generations, too.
Get ready to discover practical techniques that will help your credit union meet the needs of millennials and Gen Xers in today’s competitive financial landscape.
Millennials and the Great Migration to Digital
Millennials, also known as Generation Y, were born between 1981 and 1996. They are commonly referred to as “digital natives,” but really, they migrated from an analog lifestyle to a digital one as children and teenagers.
As adults, millennials typically live on their screens, but a sub-segment of this generation is purposefully spending less time using technology, favoring an analog lifestyle when possible.
To make matters more complicated, this generation is split into two distinct groups: Gen Y.1 and Gen Y.2. With some millennials being in their late 20s to early 30s while others are in their early 40s, their life stages and financial habits are vastly different. Some millennials are married with children, are struggling to pay off student loans, are paying off homes, and are saving for retirement. Other millennials are single or married without children, are struggling to pay off student loans, and feel like buying a home or saving for retirement are unlikely prospects.
A common thread among millennials is the sense that this generation was lied to. They were told they needed a college degree to get a good job – but the job they got out of college didn’t pay what they anticipated, so they’re still loaded down with student loans. This has led to many millennials waiting to get married and buy homes.
Gen X: Trapped Between Multiple Money Challenges
Generation X, also called the latchkey generation and the MTV generation, was born between 1965 and 1980. Living through the Cold War and watching the world go digital has caused many individuals in this generation to become workaholics. They are currently in the middle of their careers and are approaching their peak income-earning years, which affects their spending, saving, and investing habits.
The challenges they face include raising children while caring for their aging parents, paying off their mortgages, and paying off student loans for themselves and their children, including Parent PLUS loans. Pinned between these challenges, this generation typically has high debt and less retirement savings than older generations.
Generational Banking for Millennials: Focus on Convenience and Rewards
When it comes to banking habits, this generation looks for digital tools to assist with debt management and views their banks as transactional rather than relational. They prioritize access over ownership, which is why they typically choose on-demand services.
Millennials prefer mobile banking but are quick to abandon a mobile app when it is slow or otherwise difficult to use. Usability is paramount for this generation as they use mobile banking apps primarily for these activities:
- Set up direct money transfers between individuals.
- Move funds from one account to another.
- Review past transactions.
Millennials are also highly likely to choose a bank that offers better rewards, such as a more favorable interest rate on deposit accounts, cash-back options when making purchases, and the ability to receive refunds for foreign ATM fees – even if that means switching banks.
Generational Banking for Gen X: Loyal and Low on Funds
The banking habits of Gen Xers toe the line between online transactions and in-person relationships. While digitally savvy, they have brand loyalty and typically build relationships at their local bank.
Statistics about this generation are staggering as they clearly show the challenges they face:
- The typical Gen Xer has $142,000 of total debt, with the majority being in the form of a mortgage.
- Almost half of this generation maintains less than $100 in both their checking and savings accounts.
- Around half of Gen Xers still write checks, while nearly half have not written a check in the past year.
Ideally, they prioritize saving for their future but, based on these statistics, they typically struggle to do so since their time and money are split into multiple directions. This means they may seek out debt solutions, the ability to transfer money between accounts with ease, and the option to automate bill payments.
Provide Convenience with IMSI
In today’s digital age, convenience and efficiency are essential. Millennials expect smooth digital experiences and Gen Xers may need them while juggling various tasks. Our cutting-edge Online Account Opening solution enables credit unions to provide members with a streamlined onboarding process that seamlessly integrates with Corelation and Symitar Cores.
Between weddings and births, millennials will need to add joint owners to their bank accounts. With minimal patience for calling or visiting a bank, they can also benefit from our Add Joint Owner solution for Corelation.
Offer Financial Freedom with IMSI
Stuck in between piles of debt and an urgency to save for retirement, Gen Xers may need short reprieves from their loan payments when life happens outside of their budgets. That’s where IMSI’s Skip A Pay comes in. Skip A Pay works with Corelation and Symitar Cores, and can provide temporary relief for your Gen X members.
Both millennials and Gen Xers seek out loans for a variety of reasons, so it’s a natural extension of your credit union to offer loan applications online. IMSI’s Web Loan Application solution provides members with a fast application process and an immediate response, which can increase the likelihood that they will use your credit union’s loan options rather than seek out a competitor.
Deliver Smooth Online Experiences to Gain Gen X and Gen Y Members
In conclusion, credit unions have a unique opportunity to meet the needs of millennials and Gen Xers. By understanding the preferences of these generations, credit unions can tailor their offerings to effectively attract new members and foster loyalty among existing ones. The key lies in delivering smooth online experiences.
By implementing these strategies, credit unions can not only boost their bottom line but also play a crucial role in the financial well-being of these generations. IMSI can help you ensure a prosperous future for your members, so connect with us to tap into our credit union solutions and start providing your members with excellent experiences.
