By Sarah Bang and Craig Beach
More so than most, young people might just pick a financial institution based on its ability to enable their dreams.
A famous case is the story of Steve Jobs and Steve Wozniak, who sought a loan for their startup company, Apple. Banks weren’t interested in lending money to the two young entrepreneurs, Wozniak told attendees of CO-OP Financial Services’ 2008 THINK Conference in Rancho Mirage, Calif. Yet, a local credit union (he didn’t say which one!) provided them with a loan for a television set that helped produce the first computer monitor prototype – and launch one of the world’s largest corporations.
One thing credit unions that want to reach members of Gen Y (born between the early ’80s to the early 2000s) can do is make sure their branch presence is appropriate.
Interestingly, “young adults view physical branches just as importantly as the Baby Boomers,” says Bryan Sims, CEO/founder of Brass Media, in this slideshow , “but they are twice as likely to open the account online. So what does that mean? It means they want to know there’s somebody there they can talk to if they have a problem or there’s a major transaction like buying a house. Once they get those accounts, they’re all going to take care of it online.”
But, Sims suggests, CUs may need those branches to initiate and maintain the relationship. He likens it to Genius Bar tech support stations at some Apple retail stores, where people go in to talk with a guru for help solving a problem and – while they’re there – get to try out (and purchase if they want) cool new Apple stuff.
The availability of a real branch is a critical component serving the Gen Y marketplace. The proof is in the numbers. A January 2013 study by Javelin Strategy & Research (“A Tale of Two Gen Ys”) found that Gen Yers prefer to conduct transactions in person at branches at a rate of 2.5 times greater than, for instance, consumers over the age of 65, although the older members are often thought of as the heaviest users of branch services. As Sims indicated in his talk, branches are critical to initiating and maintaining member relationships.
CUs that want to reach out to Gen Y might benefit from offering small branches in a variety of convenient locations, Sims suggests. And we suggest that joining – or leveraging your existing membership in – shared branching could help you maximize your appeal to Gen Yers who love convenient and dream-enabling bricks-and-sticks locations.
Sarah Bang is president/COO of FSCC, LLC, and chief strategy officer of CO-OP Shared Branching, a business line of CUES Supplier member CO-OP Financial Services. She can be reached at 800.782.9042, ext. 1205. CUES member Craig Beach is president/COO of CUSC, a part of CO-OP Shared Branching. He can be reached at 678.812.1322.
Also read, from Credit Union Management magazine, "Missing the Gen Y Boat?"
