Credit unions (CUs) weren’t the first on the block to offer the digital tools and services most prized by high-earning millennials and bridge millennials, but they’re pulling out the stops in 2022.
Coming though the pandemic rather well considering how many were lagging in digital innovation prior, CUs are in a competitive race with nimble banks and FinTechs to bring these coveted younger consumers into their orbit by taking an unmistakably digital posture.
The June 2022 Credit Union Tracker®, a PYMNTS and PSCU collaboration, draws on data from several studies to connect the dots between what CUs now offer and what they must still bring in to attract and retain the coveted customers in lucrative younger demographic groups.
“Today’s CUs face deeper challenges than the immediate macroeconomic outlook. Stiff competition from deep-pocketed national banks and FinTechs is nothing new,” the Tracker states, “but it has become more critical than ever for CUs to keep pace with digital innovation.”
See it now: Credit Union Tracker®
CUs Get Real About Real-Time
A new battleground for CUs to gain or lose members is real-time payments, as awareness and demand for the service begins to snowball with the FedNow RTP rail debuting in 2023.
PYMNTS research finds that 99% of credit unions now offer some form of real-time payments service, although close to 25% do not offer it to all members. That’s out of step with younger demographics who see real-time payments as a valuable option that should be available from their own CU.
Per the Tracker, “Real-time payments are especially important to CUs in attracting members from the millennial and bridge millennial age groups, with 61% and 59%, respectively, indicating that they are ‘very’ or ‘extremely’ interested in the service.”
CU Classics Meet the Cutting-Edge
While traditional credit union strengths including personal service, fee transparency and local branches all rate well with younger demographics, the digital services these consumers most desire from CUs right now are great mobile apps and anywhere account access.
That is not to say that longstanding CU services aren’t highly valued. They are, and younger members feel those classic CU strong points can be even stronger with digital dimensions.
Per the Tracker, “Respondents under the age of 45 identified five factors as the most valuable in selecting an FI. Surprisingly, just two of these — mobile apps and easy account access — relate to digital services. The other three are all core traditional CU strengths.”
When looking at the list of digital services that would inspire a consumer to switch to another CU or another kind of financial institution (FI), we find a litany of millennials’ favorites, including mobile deposit, instant provisioning to digital wallets and peer-to-peer (P2P) transfers.
The Tracker cites a PYMNTS that found 39% of consumers “would switch to a different FI that offered instant cards issued to their digital wallets, a technology that allows customers to begin making purchases immediately without waiting for physical cards to arrive. Thirty-eight percent would move to a new FI to use mobile check deposits, 36% would do so to get basic digital wallet access and 35% would switch for peer-to-peer (P2P) payment functionality.”
Get your copy: Credit Union Tracker®
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