Young whippersnappers are a virtually untapped market for credit unions, but how do you speak their language and capture their attention? The right mix of technology and personal touch could have this demographic eating out of your CU palm. But the benefits you'll derive from their membership are just as exciting. Learn why these relationships are so mutually rewarding.

By Nancy Mann Jackson

It's no secret that, across the nation, credit union membership is graying. In fact, according to research data from the Credit Union National Association, 61 percent of non-credit-union members between the ages of 18 and 34 are eligible to join a credit union, but they have not chosen to do so. As their current members age, more and more credit unions are taking notice and are looking for ways to attract new, younger members. But times have changed, and reaching members of the younger generations now requires new and innovative strategies.

For instance, today's young adults are more comfortable and capable with technology than any generation before them. So not surprisingly, some of the most promising approaches for reaching this group involve high-tech solutions. However, hightech must be accompanied by high touch. Like every other group, the younger generation also values good old-fashioned member service and simply wants to feel that they are being heard and that their needs are being met.
"I think sometimes we try and make it a little too hard," says Denise Gabel, chief innovation officer at Filene Research Institute. "No matter what the demographic is, they want someone who's going to listen to them and meet their needs."

Why Care About Youth?

Before implementing programs to attract 18- to 34-year-olds, it's important to understand why this group is important to credit unions. More than just replacements for aging members, young adults have much to offer.

"In addition to the obvious reason that credit union membership is aging and we need to replace older members with a younger demographic, it's also important to recruit younger members because that younger demographic stretches us," Gabel says. "It's a bit like being around a younger person who comments on your outfits and lets you know when you're wearing something that isn't quite in fashion anymore. [Having younger members] makes us more aware of how fast the world is changing and how we need to keep pace."

At the Washington State Employees Credit Union (WSECU), executives are dedicated to reaching out to young adults not only because such individuals will be valuable future clients, but also because the credit union believes it can meet a great need for financial guidance among this demographic. "We're already aware that the peak borrowing years are from ages 35 to 44, and like the national average, our average member is 47 years old," says Kristina Walters, WSECU's vice president of marketing and business development. "We want to groom these young people for the coming years when they will need a financial partner, but we also believe that young people need guidance in spending habits. We're concerned that 18- to 24-year-olds are being aggressively targeted by credit card companies and we want to educate them now so they can avoid problems in the future."

Getting With It!

To catch the attention of a new generation, credit unions like WSECU are developing creative programs that are focused on the unique needs of today's young adults. WSECU is making a strong push for new members between the ages of 18 and 24. For instance, the credit union recently partnered with brass|MEDIA (www.brassmedia.com), a company that was launched by a college student who was interested in educating other young adults about "the money side of life." brass|MEDIA publishes "brass|MAGAZINE," a glossy publication that is targeted to young adults and is full of content about managing money – from how to budget for a road trip to early planning for retirement. As a Brass Media partner, WSECU will receive 15,000 copies of the magazine, each one branded with the credit union's logo. WSECU will mail its personalized copies to its members between the ages of 18 and 24 and will have copies available within each branch.

"brass|MEDIA is completely geared to that age group," so it's an ideal partner for WSECU, Walters says. "They're providing tools for us to begin a direct mail campaign for young adults, and they also provide Web tools we can utilize."

In addition to mailing youth-focused financial magazines, WSECU is also rolling out its first vodcast, also targeted to the same age group. More cutting-edge than a podcast, a vodcast utilizes video-on-demand and is gaining popularity among young adults. Aware that technology interests will continue to evolve, WSECU has already reserved a page on Facebook, the popular social-networking site, and has just developed an e-services unit within the credit union to focus on investigating new electronic channels of communication. "Electronic communications offer the ability for young people to tap into information when they want it," Walters says. "They can download a podcast, read an article or watch a video whenever they want to. We believe it's our obligation to have financial education at every turn for this age group."

Because high-tech tools come so easily to many people in the 18-to-34 set, WSECU also believes members of this demographic will be among the first to adopt its newest product, the Mobile Financial Manager. Currently in pilot phase, the new product allows users to conduct some financial business via mobile phone. Credit union members with a smart phone can view financial statements, transfer funds and check balances. In addition, the free service offers customized alert messages to keep members from incurring

unnecessary fees. For instance, a member might choose to receive a mobile alert when his or her account reaches $50 or when an electronic deposit has been made.

"The Mobile Financial Manager wasn't designed just for younger members, but it happened to fit them well because many of them are so tech-savvy and most have smart phones," Walters says. "We thought it might be the right product to catch their attention, to allow us to become an expert they can rely on." Rollout of the new product will coincide with the mailing of WSECU's first branded issue of "brass|MAGAZINE" and will represent the credit union's "first big push with youth," Walters says.

Filene Research Institute has developed other creative programs that are focused on reaching the same underserved group of young adults. One project, CU Pick 64, combines social networking and financial acumen as participants engage in a competitive stock market simulation game. Each week, players fill out an NCAA-type bracket where the competing teams are companies and a win is having the highest percentage price appreciation. The credit union stays in frequent contact with players, updating them on the standings and reminding them to enter new picks. This program leverages young adults' interest in video and computer games to educate them about credit unions, to guide them toward undertaking investor education and to encourage them to form a deeper relationship with a credit union.

Making Youth a Priority

In addition to implementing unique, creative programs that are targeted to young adults, credit unions can attract this group in more traditional ways. To do so, credit unions simply have to keep young people and their priorities in mind on an ongoing basis and make reaching out to them part of their institution's ongoing pursuits.

For instance, WSECU has branches on the campuses of the University of Washington, Washington State University at Pullman and Evergreen State College, in addition to some community colleges. While these branches were originally in place to serve the employees of the colleges, they are in perfect locations to attract students and to begin relationships that could last for decades. WSECU made a few regulatory changes to allow students at specific colleges to join. As a result, its presence on campus now offers a convenient solution for students with financial needs. And by simply being on campus every day, WSECU employees are able to stay informed about college students' interests and needs.

WSECU has also recently formed a Youth Council, an inhouse group of employees who fall within the ages of 18 to 24 years. This group will meet regularly "to look at the advertising we're doing, to talk about the needs of their age group and to discuss what holes we can fill," Walters says. "We hope we will have a representative leader from that [council] to periodically attend board meetings and speak to the board about their issues."

KISS Method

While younger adults respond to high-tech initiatives and are frequent users of social media and other new technologies, reaching them isn't all about offering new, cutting-edge programs. In fact, simply doing things in a way that makes sense is highly important to people in this age group.

"For the younger demographic, silly rules and outdated processes just don't fit," Gabel says. "They're looking for customization, social networking and very robust online access; these [attributes] are basics for the younger generation. Beyond that, [it's possible to] get too tricky. They just want it to work and be simple."

While in some circles, credit unions still have a reputation as stuffy, old-school institutions, widespread changes over recent years have begun to transform this viewpoint. "We're getting there," Gabel says. "Most [credit unions] have online banking. But are they going to implement mobile banking? Is there instant messaging? Is there online-chat capability?" These simple-to-use tools offer the convenience and comfort that may convince the vital younger generation to give credit unions a chance.

Nancy Mann Jackson is a freelance writer who writes frequently about business and travel.