In 2024, SRM was thrilled to kick off a partnership with the excellent team at Filene Research Institute, where we established ourselves as a sponsor and collaborator in their Center of Excellence focused on the Next Generation of Member Growth. That’s a mouthful, admittedly, but it’s one of the most critical issues facing credit unions. With that in mind, we wanted to share some of our thoughts on attracting, engaging, and retaining younger credit union members.
Although credit unions have wrestled for years with the challenge of an aging member base, recent statistics bring the issue into even sharper focus. Excluding activity from indirect lending (a means of attracting younger car buyers), the age of a credit union member is creeping up, with sources noting averages 47-55 years old, compared to the US overall average age of 37 years old.1
Gen Z comprises a mere 10% of overall credit union membership2. It wasn’t long ago that popular opinion assumed that Gen Z would eventually get serious about their finances and onboard to traditional servicing options, including choosing a credit union that fit their needs. However, in what seems like the blink of an eye, the oldest cohort of Gen Zs is now pushing thirty and poised to control $10 trillion of deposits by 2030.
Credit union missions and messaging seem well-aligned with attitudes typically attributed to Gen Z, namely shopping local and preferring values-based organizations over faceless corporate entities.
Yet, when the industry surveys those under 30 years of age about their servicing preferences, credit unions or community banks are less likely to appear among the cohort’s top choices. Instead, they cite the use of Cash App or larger banks with the best mobile and digital banking technology.
A Data-Driven Approach to the Problem
It’s not a stretch to label this an existential threat, particularly for credit unions under $1 billion in assets that are already experiencing membership declines. Given the shared challenge and widely dispersed nature of the credit union landscape, a collaborative industry-wide analysis of contributing factors and potential solutions seems the best approach.
It’s for this very reason that we’re so excited about the Filene Center of Excellence. The initiative brings together a highly respected generational expert and researcher – Kim Lear of Inlay Insights – with an advisory council of credit union leaders and advisory thought leaders like SRM.
Together, we aim to identify how products and services must evolve, test marketing strategies and tactics, identify emerging capabilities and growth opportunities – digital and physical – to convert Gen Z and Millennials into members, and investigate the infrastructure needed to accomplish these goals.
The Messaging and the Capability
The Center of Excellence will naturally dig into far greater detail, and we look forward to the unbiased research that results from this initiative. As a starting point, SRM sees some key factors driving the financial behaviors of younger generations.
Naturally, best-in-class technology and the frictionless experiences it enables top the list. There is a perception gap, as many credit unions have made impressive strides on the digital transformation front, often in partnership with a wide array of fintech providers. Getting that message out without the multi-million-dollar marketing budget of the country’s largest banks becomes the challenge.
Once credit unions close the technology perception gap, as well as any actual gap that remains, the mission shifts to crafting a compelling story. There are plenty of reasons credit unions should appeal to the next generation of members. The task is to identify the angle that resonates and ensure that the message is received far and wide.
The Bottom Line
SRM sees a future where the mission of credit unions, the everyday conveniences of digital tools and experiences, and the continued emergence of fintechs can thrive together. Collaboration and research are essential to this desired outcome. We will keep our readers updated on the progress of this exciting Center of Excellence.
Resources
1Filene Research Institute Study, 2024
2McKinsey Consumer Financial Life Survey, 2023
