By Damien Simonneau
When it comes to courting millennials, there’s a lot banks can learn from credit unions. While banks have more overall marketing power, with bigger budgets and more branch locations than their credit union counterparts, credit unions have one major advantage over banks today: their ability to be nimble and experiment with new technologies to attract and retain members — especially the digital-savvy millennial. According to BluCurrent Credit Union, nearly half (44 percent) of all new members are millennials.
It’s no accident that credit unions have become popular among the millennial demographic. These financial institutions recognized early on that the long-term sustainability of their brand depends on understanding and connecting with millennials given their massive buying power, which is estimated to reach $1.4 trillion by 2020. For this generation, experience matters more than products. Credit unions have the potential to be a valuable resource for them, but only if they can offer convenient and easy experiences that don’t require a lot of effort.
In addition to providing trust and transparency that millennials feel is missing with big banks, credit unions have also been able to attract and retain millennial members by offering more convenient banking options — namely, video banking. Multiple surveys have shown that even millennials who bank with credit unions rarely enter a branch and prefer to conduct most business online. Video banking enables consumers to connect face-to-face with their financial institutions without having to leave their home or office. One click connects them with a specialist who can quickly resolve an issue or provide the guidance they need.
Prioritizing Video Banking to Capture Millennial Mindshare
Video has proven to help credit unions enhance their service and increase satisfaction and loyalty, all while growing revenue and driving productivity gains. That’s why so many financial institutions (82 percent) are planning to follow the same path, making video a key channel to engage with customers.
Like most consumers, millennials are already using video chat services in their everyday lives and are willing to use video with their financial institutions. In fact, a recent survey of over 4,000 consumers found that most -— regardless of age, gender, social class, or working status — are eager to adopt video banking.
For millennials, there are several trends that make the case for prioritizing video banking in order to win them as customers:
- Mobile banking is on the rise: Each month, millennials access their financial information via mobile device nearly three times more often than other generations do. Offering the ability to initiate a video chat session from a mobile site or app will help resolve issues and cross-sell products more easily while giving millennials the on-the-go convenience they crave.
- Millennials seek education and guidance: Beyond convenience, millennials also want to feel financially empowered, yet they aren’t getting the support they need from their financial institutions. In fact, only 39 percent of millennials rely on advice from a professional working in the financial industry, and they are five times more likely than other demographics to close their accounts and leave a bank if their needs aren’t being met. They are also the largest group among customers buying a house for the first time. They need a financial institution they can trust to walk them through the often overwhelming mortgage application process. Video banking offers opportunities to build lasting relationships with millennial members in the moments that matter most.
Gary Kirk, executive vice president of BluCurrent Credit Union, notes, “Convenience is a primary focus for consumers, which is why technology is so important today. Video technology is growing not only because of convenience but because people value relationships. Video allows the opportunity to share product information, educate, and assess needs all while building trust in a face-to-face encounter. Our experience at BluCurrent has shown that members gravitate toward video technology because it allows them to be ‘conveniently relational.’”
- Student debt remains a burden: Despite being the largest group of homebuyers, many millennials are burdened by student loan debt. According to research from the National Association of Realtors, student debt is delaying millennials from purchasing a house for an average of 7 years. This is also a time when this demographic is planning for a family and may be thinking of their first big job or career move. Offering education and advice for managing finances without requiring a physical visit to a branch location will go a long way with this group, and the face-to-face opportunities video offers will help engender trust throughout the process.
Millennials are a well-informed generation looking for financial partners that understand their needs. Video banking is an effective way to bring the human touch to the digital interactions they want and expect. As banks begin to pilot video banking solutions, they should look to some of the credit union use cases that have made this technology a hit with millennials.
Damien Simonneau is EMEA marketing director and global head of financial services solutions marketing at Vidyo.