Covid-19 has uncovered many harsh truths about the importance of digital transformation. A quick look at some analytics reveals more problems on the way. If your credit union doesn’t value digital transformation, then it doesn’t value its members.
The average age of credit union members is 47.
60% of the children (now adults) of Baby Boomers don’t bank with their parents’ credit union.
Only 9% of members recommend their credit union to their adult kids.
Credit unions do fine with older demographics, but younger generations are taking a hard pass. The reason why is due largely in part to a lack of technology. (A lack of visibility doesn’t help, though.)
Younger Generations Expect More
Everybody under 40 grew up with the internet. Only the oldest Millennials graduated high school without cell phones. Social media has completely transformed modern society in the last 15–20 years.
At the same time, younger generations quickly got comfortable with online shopping at places like Zappos and Amazon. They value convenience, seamless and simple experiences, and intuitive UX design. If they have to take extra steps to accomplish something, they won’t do it—they’ll go to a competitor who can offer what they’re looking for.
That last part cannot be emphasized enough.
It’s time to start thinking of the member experience as a digital one.
Other financial institutions provide more, digitally. Here’s a list of things that younger people (read: in their 30s, not in their teens) might value from their banking app:
- Open a new account
- Apply for a loan
- Invest in the market
- Plan for retirement
- Track savings goals and progress
- Manage payments and cards
The world where people merely want to check and transfer balances doesn’t exist anymore. Everything that can be done in a branch should be available digitally or in your digital roadmap.
Why Is This News?
Recently, we wrote about how credit unions suffer from an awareness barrier in attracting younger generations. That is, Millennials and Gen Z don’t have a solid grasp on what credit unions are.
But this article in the Credit Union Times shows that awareness isn’t the only roadblock to success. Even the (adult) children of credit unions are choosing banks and other financial institutions instead. And these adult children know exactly what credit unions are.
They just choose not to bank with them.
Yes, many younger people would love to be part of a member-owned cooperative that looks out for their best interests. But they also don’t want to wade through outdated technology and bad UX just to complete what they see as basic banking functions.
Next Steps for Credit Unions
There are a few next steps to take. Here are three:
- In your next strategic planning session, ask what’s on your roadmap for digital transformation.
- Review competitor technologies and services to see what might work for your credit union. Absolutely look outside of the credit union industry.
- Contact us at CU 2.0 to sign up for a quick, private quarterly discussion about new technology in the credit union industry.
We love credit unions and want to see them flourish. Please consider the role of member-facing technology in your ongoing growth and success.