The youth of today are the consumers and investors of tomorrow. Yet, statistics continue to show far fewer numbers of youth members in the credit union and banking space. The average credit union membership age in North America is 53, according to the 2020 World Council of Credit Unions Statistical Report.
We have heard time and again that the millennial youth stand to inherit the boomer wealth. The gap in generational tendencies is growing larger by the day and has transformed into what is being called Experience Economy.
After World War II, the world experienced an age of material accumulation as they worked to rebuild and gain status. Since then, we’ve experienced The Great Recession, one of the worst economic challenges in US history, from December 2007 to June 2009. The collapse of the housing market, resulting from a confluence of economic and regulatory factors, led to the economic crisis. Millennials witnessed many people of the prior generation lose their life savings and go back into the job market. Banks are working hard to regain trust, especially with millennials, and Credit Unions are contending to make a name for themselves, teaming up with fintechs to make it happen.
Experience over things. That is the world the financial industry is coming to understand and learning to adapt to. In a competitive environment that is constantly changing, consumer loyalty is crucial. The key to obtaining that loyalty is creating a positive experience for accountholders and borrowers within the financial institution, throughout the journey of the consumer life cycle. Financial institutions should seize every opportunity to enhance their culture through education and improve the consumer experience by offering consultative insights, relevant technology, and decisive education.
Maintaining the consumer base is the beginning of consumer loyalty. Increasing volume and attracting new consumers by remaining current with technology, product and service offerings, and consumer education will allow credit unions and banks to retain current consumers and attract new ones.
3 Ways to Attract and Retain Consumers:
- Embrace advanced technology
Money followed the fintech fixation. The amount of venture capital funding in fintech hit $7.5 billion, according to CNBC. Consider that accountholders expect financial institutions to offer online and mobile technology for bill pay, account and balance inquiries, check cashing/deposit, and peer-to-peer payments, among other transactional needs. These types of services require an ongoing commitment to and investment in digital tools. - Offer competitive products
To remain competitive, consumers need to know what the offerings are and how each one benefits and protects them. POS products can be mutually beneficial offering protection to both the financial institution and the accountholder. Here is a list of POS products that can help attract and retain accountholders:
- Focus on financial literacy
Financial institutions are in an optimal position to offer skills and tools to consumers related to budgeting, managing, and paying off debts, and understanding credit and investment products. Some elements you could consider adding to your financial literacy program include how to:
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- Create a budget
- Track expenses
- Plan timely payments
- Save money
- Know your credit
- Invest in the future
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Equipping consumers with the knowledge they need to make smart financial decisions with their money, no matter their financial stage, will help to improve consumer loyalty. Nurture the consumer by helping them get faster approvals and receive better offers (payment, rate, and shorter loan terms) on both new and/or existing loans. Make services easily accessible.
Remember these three words: Experience. Experience. Experience. In today’s ever-changing financial industry, financial institutions have great opportunity to thrive. Every financial institution has their advantages. Banks leverage numbers, money, and members alike as well as their well-known names. The credit union’s core pillars are their commitment to serving their members and communities. They are known for their great loan rates, excellent customer service and ability to assist the underserved. If financial institutions want to be viewed as a place to build financial stability and security, they must find more ways to promote personalized products and services while being interactive, educational, and engaging to enhance the consumer experience.
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