Gen Y Success

A new study commissioned by CO-OP Financial Services shows that Gen Ys (aka Millennials) know precisely what they want in a financial institution.

CO-OP, a CUES Supplier member based in Rancho Cucamonga, Calif., provides ATM, shared branching, call center and online/mobile banking services to 3,500 credit unions.

The survey, titled "Unlocking the Millennial Mystery," takes a look at services and products offered by credit unions with a special focus on Millennials - consumers born in 1980 or later - and their decision-making in selecting a financial services provider.

"Positive customer experiences (for Millennials) are largely driven by the basics - deliver on expectations and treat people with respect. Positive staff attitudes are more strongly recognized on a local scale," says the study. "Both credit union members and bank customers are generally satisfied with financial institutions - credit union members much more so."

The study reports the attitudes of a 495-respondent survey sample, evenly split between credit union members and bank customers. These respondents also indicated to researchers that they had switched financial institutions in the past 12 months, or were open to switching.

According to the CO-OP study:

• 81 percent of Gen Y credit union members said their institution provides an "outstanding customer experience" compared to 59 percent of bank customers responding so for their banks.

• A total of 96 percent of credit union members said they were very satisfied or somewhat satisfied with their credit union, while the figure was 88 percent among bank customers.

• Credit union members are much stronger advocates for their financial institution compared to bank customers. The survey found a "Net Promoter Score" (likely to recommend) of 38 percent among credit union members, with bank customers registering only 16 percent.

Credit Union Case Study: Georgia's Own CU

One credit union that is taking a big leap into the Gen Y pool is Georgia's Own Credit Union, Atlanta. With more than 170,000 members and $1.7 billion in assets, Georgia's Own CU is one of the state's largest financial institutions.  

"Gen Y consumers are extremely important to us because they represent the future of our membership, and the purchasing behaviors of this demographic will represent the status quo of future generations of consumers," says Laura Sterling, AVP/marketing. "If we can reach this group, we will have the ability to attract even younger generations of members."

Sterling says Georgia's Own CU considers the Gen Y population to be in the18-32 age range and currently has about 32,000 members in that segment. It is also one of the credit union's fastest growing membership groups, growing by 19 percent over the past two years. A major factor in that growth is Georgia's Own CU's "i[x] program," which was created to attract members in the 14-25 age range. The i[x] program is accessed via a blog-based website.

Website content is designed to help young people "get control of their money" by offering financial products and services tuned to their age and life stage, with tailored assistance for setting up a checking or savings account, beginning investing, or securing a new car loan. Georgia's Own CU also publishes a quarterly magazine (Ne[x]t Magazine) which is sent exclusively to i[x] members. "Since the program started in the fall of 2009, we've seen membership grow 35 percent among the 14- to 25-year age group," says Sterling. "Our success is measured through total members, number of checking accounts and through outstanding loan balances among i[x] members."

Although Gen Y is a very tough demographic to reach, Sterling believes credit unions are making progress in marketing to this group. "Through social media, product development and branding, credit unions have changed the way they advertise and have dedicated enormous resources to this segment of the population," she says.

Since much of what credit unions and other institutions do to attract younger consumers centers on technology, the investment can be costly.

But it's a necessary expense. CUES member Kathy Igou, VP/branch services for Georgia's Own CU, points out that Gen Yers pride themselves on being multi-taskers, and financial institutions must respond accordingly. "This Gen Y group needs a wide variety of channels," she says. "They want it all. In our experience, we find that if we put it out there, they will use it."     

Bill Prichard is manager/public relations and corporate communications for CO-OP Financial Services, Rancho Cucamonga, Calif. He can be reached at bill.prichard@co-opfs.org and 800.782.9042, ext. 3450.