Only 14% of Young Consumers Favor Credit Unions

When it comes to the bank versus credit union (CU) debate, it’s clear where the loyalty of younger consumers lies.

A PYMNTS survey found younger consumers show a stronger preference for national banks than for CUs.

There’s a bright spot here for CUs, however, as more consumers between the ages of 18 and 24 use CUs than those 24 to 34 and 35 to 44, meaning CUs have an opportunity to see a comeback with the youngest generation of banking customers.

The survey showed that the greatest preference for CUs can still be found among baby boomers and seniors, with 60% of those ages 65 and older reporting CU membership.

In addition, 54% of those respondents between 55 and 64, and 35% of those between 45 and 54, are CU members, while just 19% of consumers ages 35 to 44 and 14% of those ages 25 to 34 said they turn to CUs for their banking.

While 36% of consumers ages 18 to 24 select national banks for their financial services, 26% said they belong to CUs. CUs have a disadvantage here, in that they tend to be far less visible than their competitors.

Still, the substantially higher interest from the youngest generation of banking customers suggests CUs have a chance to appeal to them if they can offer the digital tools that many expect, coupled with the member-focused mission that has long been a CU trademark.

PYMNTS’ research has found that 23% of CU members would consider switching their primary financial institutions (FIs) for the sake of innovative digital banking products. This included 38% of CU members who would switch for access to mobile check deposit, 38% who said they would switch for access to digital cards that can be issued directly to their digital wallets, 35% for peer-to-peer (P2P) payments and another 35% for cardless cash withdrawals.