Generational Trends Shaping Growth Goals

By Kelly Flynn, National Director, ADVANTAGE
August 16, 2024

In today’s competitive financial environment, understanding generational preferences is crucial for expanding your credit union’s market share and distinguishing yourself from the competition. Insights from a recent BAI report reveal how different generations value distinct features from their primary financial institution (PFI). To successfully attract and retain members, it’s vital not only to recognize these preferences but also to implement the right digital tools to meet and surpass their expectations.

Tailoring Strategies for Every Generation

Different generations have unique priorities when choosing a primary financial institution (PFI). Here’s a breakdown of what each group seeks:

• Baby Boomers: Value convenience, reputation, and comprehensive financial services. They look for high-yield money market accounts, wealth management options, and reliable peer-to-peer (P2P) payment solutions.
• Gen X: Prioritize convenience, solid reputation, and competitive rates, similar to Boomers, with an added emphasis on practical financial management tools.
• Millennials: Seek cash incentives, budgeting tools, and financial education. Millennials aged 18 to 24 prefer institutions offering these resources, while 81% are willing to switch for a better digital experience. They also prioritize no-fee banking.
• Gen Z: Seek seamless digital experiences and mobile-centric services. Although they heavily rely on technology, they still value the reassurance of physical branches for added security.

Meeting the Digital Demands

To remain competitive with the big banks, credit unions must offer a blend of digital capabilities and member-focused services. Baby Boomers and Gen X value branch and ATM convenience, whereas Gen Z’s expectations are centered around a seamless digital experience. Despite their reliance on digital platforms, they still find physical branches necessary for peace of mind.

For credit unions, this means integrating robust technology that aligns with member needs. Whether it involves upgrading existing systems or partnering with new vendors, having the right digital tools and platforms is crucial for delivering a compelling member experience. It could involve upgrading existing systems or finding new vendors that align with your goals.

Essential Offerings for Growth

Baby Boomers and Gen X are significant demographics with substantial wealth, making it important to focus on high-value services and competitive rates. However, Millennials and Gen Z are drawn to features like cash incentives and advanced digital tools. Understanding these preferences is not enough – it takes having the technology to deliver them effectively.

For instance, Millennials are more likely to switch PFIs for a better mobile app, underscoring the need for top-notch digital solutions. Gen X values competitive rates but also seeks financial institutions with strong reputations and convenient service options.

Overcoming Tech Challenges With Strategic Support

Integrating and upgrading technology can be complex, often presenting challenges for credit unions that may be understaffed. This is where strategic partnerships become invaluable. Collaborating with experts who specialize in working closely with the industry’s technology vendors can help credit unions seamlessly enhance their digital capabilities without being overwhelmed by the process.

Such partnerships offer the expertise required to implement and manage advanced systems, ensuring your credit union delivers the digital features that your members expect. This added support not only saves time and energy but also helps in developing an effective action plan. It ensures your credit union remains aligned with industry standards and poised to stay ahead of competitors.

Preparing for the Future

With Millennials and Gen Z set to inherit significant wealth by 2030, there’s a unique opportunity to attract and retain these younger members. However, focusing solely on these younger generations without neglecting existing members can be a delicate balance. Baby Boomers and Gen X should also be considered in strategic planning to avoid alienating any demographic.

Implementing a comprehensive strategy that caters to the needs of all generations and leverages the right technology is essential for sustainable growth. By doing so, your credit union will not only meet current member expectations but also be positioned to adapt to future demands.

To thrive in a competitive environment and grow market share, credit unions must align their offerings with generational preferences and invest in the necessary digital tools. Understanding what each generation values and partnering with the right technology vendors will enhance member experiences and keep you competitive with national banks. This balanced approach will help attract new members while retaining the existing base, ultimately driving long-term success.

Need help evaluating your legacy systems to position your credit union for the future? Connect with ADVANTAGE and learn more about a complimentary assessment today.

About ADVANTAGE

ADVANTAGE, powered by JMFA, is dedicated to empowering financial institutions with strategic solutions for growth and success. Our comprehensive services include overdraft program consulting and compliance, checking account acquisition strategies, contract negotiation expertise, and consulting for technology strategy, evaluation and selection. With a rich history of serving credit unions nationwide, we are committed to delivering exceptional value and fostering long-lasting partnerships. Choose ADVANTAGE, to elevate your performance, identify new opportunities, and build more value.