NEW YORK–A new survey of credit union members over the age of 65 has found more than half say their children chose not to do business at their parents’ credit union.
The survey, conducted by Access Softek, Inc., a provider of online and mobile banking software, included more than 500 credit union members over the age of 65 who have adult children. The company said the goal of the research was to better understand how credit union membership changes generationally and the role family plays in that change.
The survey, conducted by Google Surveys between May 22-29, 2020, found 60% of respondents had children that chose not to bank at their parent’s credit union. The company did not say whether the children of CU members now do their banking with a different credit union.
“In addition to seeing their children choose different institutions, despite a typically long-term relationship with their credit union, only 9% of respondents had recommended their credit union to their adult children,” the company said in releasing the findings. “This indicates that credit unions have an opportunity to expand their membership by cultivating family relationships. This could be achieved through offering a suite of products and services that appeal to all ages, especially for those services adult children are most likely to ask for advice about, such as loans and investments.”
Access Softek pointed to a study from FICO that found that credit unions are seeing attrition in Millennials as they leave home, with the percentage of Millennials using a credit union dropping from roughly one-in-five for those under 25 to 10% for those 25-34. The company further cited research done by Trellance that showed the average age of credit union members is 47 and suggested the two findings highlight the need for credit unions to track, understand and predict churn based on demographics.
"Credit unions appear to be doing great with loyal members over the age of 65, indicated by the 68% of surveyed consumers who had been with their credit union for more than a decade, but this loyalty does not make the transition to the younger generations," said Chris Doner, founder, and CEO of Access Softek. "Credit unions need to ensure that they are not just offering the tools that appeal to their existing base but add in digital offerings such as real-time online loan products and mobile-based investing that are needed by Generation X and Millennials."
The Strategic Opportunity
Doner further stated that not only is there a strategic opportunity to try and keep families in the credit union, but there is another opportunity for a strategic shift. Offering digital solutions that rival those of the big banks and challenger banks is one method credit unions can demonstrate their long-term value to younger individuals. Especially as wealth is transferred from one generation to the next, providing digital wealth management tools, like a robo-advisor, directly through the credit union is just one way that credit unions can entice younger members to keep those assets at the credit union in which their parents held them.
"It’s important for us to understand how credit union membership is evolving and it is our hope that credit unions also take note of this data," Doner said. "As membership is aging, it is critical that credit unions adapt in order to keep families in the credit union for generations to come."