Credit Unions are Banking on Millennials
Tuesday, May 30, 2017
Minnesota Business Magazine (May 30, 2017) - Emojis. Craft beer. Selfies.
That’s a very small (and admittedly, somewhat condescending) list of things that the millennial generation values.
Now add to the list…credit unions?
In a biennial survey commissioned by the Minnesota Credit Union Network (MCUN) to measure Minnesotans’ attitudes about credit unions and banks, millennials showed a higher preference for credit unions compared to other generations.
“We do the survey every other year, but we had not broken out the results generationally in the past,” explains Andrea Molnau, communications director for the statewide trade association for credit unions. “Our members asked for help in reaching millennial market and getting insight into their for preferences and attitudes.”
It’s no wonder there’s an intense focus on the financial preferences of the young adult cohort. Millennials, born between 1980 and 1995, are now aging into the life stage where they are—or soon will—seek loans for major purchases like cars and homes.
“Millennials are thrifty. They’re in tune with their finances from growing up in the recession and the student loans they have to deal with,” says Molnau.
Currently Minnesota credit unions have nearly $20 billion in assets and serve more than 1.6 million members at almost 400 branch locations across the state.
About a quarter of Minnesota millennials say they use a credit union as their primary financial institution, with 61% of them reporting that they “love” their credit union. That compares to a “love” response of 41% for Minnesotans of all generations.
The MCUN survey found that millennials demonstrate a corresponding level of dissatisfaction with traditional banks; 42% have an unfavorable feeling about banks, compared to 16 percent of all Minnesotans.
Conducted in March, the poll of 728 respondents was done by Target Smart and Fluence Media. The survey reports a margin of error of ± 4.4 percentage points.
“When consumers join a credit union, they are members and have a voice in how the institutions are run,” Molnau adds. “Because credit unions have a cooperative model, we return profits to members, not shareholders. That’s how credit unions can offer lower fees and closing costs with mortgages.”
The trend of youthful skepticism about traditional banks is consistent with the narrative in a new book.
“Managing Millennials for Dummies” was released earlier this month, authored by Hannah Ubl, Lisa Walden and Debra Arbit. The trio of generational experts are on staff at Bridgeworks, the Minneapolis-based generational consulting firm.
“Many millennials blame those in the financial sector for the 2009 recession,” one section of the book notes, making “…the next generation extremely distrustful of people who manage money.”
The book also cites evidence that millennials care deeply about the values of the firms they do business with, noting “…in purchases they make and places they work, they want to know that their decisions serve a higher purpose.”
“We think the outlook for credit unions is bright., Molnau says. “The credit union model is local and transparent, which aligns with the preferences of millennials. We’re excited about where this is going.”