Almost every bank or credit union wants to get younger. To reduce the average age of consumers using their financial institution. The average age of membership at credit unions hovers around 48, while the average age of most community banks is not much lower.
Strategically speaking, younger consumers also means more loan growth. Plus, the more young people in your financial institution could potentially translate into a lifetime of future business. While Generation Y balances may not be large, their profitability probably is.
So how does your bank or credit union get younger? It’s start with change. You cannot continue doing business the same way. While you can’t turn your institution into Logan’s Run, where you kill everyone over 30 (or stop doing business with them when they turn 30), the reality is this new generation has new banking demands.
Here are the four changes your credit union or bank must take to get younger:
- Change your focus—Stop focusing your marketing efforts to reach older Boomers. We financial institutions talk a good game about getting younger but then we still try and serve people of all ages. If you are serious about reaching the Millenial generation then your strategic plan, your marketing plan and your marketing budget will reflect that focus. Here’s a hint: drop traditional marketing methods and replace them with digital.
- Change your rates—As mentioned above, you don’t want to become Logan’s Run. But one way to get younger is to “run off” those older deposits by lowering your deposit rates (at least on CDs and similar products). Are you running your ALM balance sheet to please a select group of older depositors? Then you’re really not all that serious about getting younger as a financial institution.
- Change your management team—It’s amazing how much grey hair there is in the “C” suite of most banks and credit unions. And that’s not even talking about board or directors! I speak regularly at bank and credit union conferences about generational issues. When I ask attendees under 30 to raise their hands, precious few do (because they’re not there!). You won’t get younger as a financial institution if Generation Y is not represented on your management team.
- Change your technology—The easiest way to reach Millenials is through their parents and with technology. Whether it’s a digital wallet, cross channel banking experiences, or a more robust tablet/mobile app you need products and services geared to young people. Because they live on their mobile devices, this is where you reach them.
Getting younger as a financial institution will not just happen by accident or by osmosis. You must be intentional in your efforts. Your bank or credit union must change.