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GOOD NUMBERS MAKE FOR GOOD NEWS

GOOD NUMBERS MAKE FOR GOOD NEWS. According to the National Credit Union Administration (NCUA), there were 5,964 federally insured credit unions as of the end of Q1 2016, with $1.2 trillion in total assets, 103.7 million members and the average credit union with $208 million in assets.

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GOOD NUMBERS MAKE FOR GOOD NEWS

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  1. GOOD NUMBERS MAKE FOR GOOD NEWS • According to the National Credit Union Administration (NCUA), there were 5,964 federally insured credit unions as of the end of Q1 2016, with $1.2 trillion in total assets, 103.7 million members and the average credit union with $208 million in assets. • In its Credit Union Trends Report for May 2016, Credit Union National Association (CUNA) Mutual Group stated there were 6,126 credit unions, decreasing by 291 YOY, and credit unions added 431,000 new members during the month. • Callahan & Associates in a late-August press release reported that credit union membership increased 4% during Q2 2016, compared to Q2 2015, to a total of 106.4 million and average member relationship reached an all-time high of $17,340.

  2. LEVERAGING LOAN DEMAND • Credit union growth is also occurring in its loan products. During the first half of 2016, first mortgages increased 9.7%, at an annual rate, or a total of $62.6 billion in originations, with $340.7 billion in first mortgages held, an all-time high balance. • During the year ending June 2016, credit unions added 572,550 new auto loans, which represented a $20.7-billion increase. As of the end of Q2 2016, the average auto loan was $19,719, a 3.6% increase from June 2015. • Strangely enough, credit unions’ total used auto balances also increased $20.7 billion from June 2015 to June 2016. The number of used auto loans increased 13.4% during the same period, reaching a total of $175.1 billion in loans held.

  3. BRANCH EVOLUTION • Although fewer consumers are banking at a commercial bank or credit union branch, a 2016 TimeTrade Systems survey found that convenient location, at 38%, was the most-important factor for visiting a branch; followed by personalized service, 35%. • The study found that just 27% of consumers considered a branch’s hours of operation important; however, when asked which service enhancements they would like, 69% of consumers said “ability to bank after typical business hours.” • According to a 2015 Crimson Hexagon survey of social media users, bad customer service, at 29%, was the first reason consumers switched financial institutions; and bad service increased percentage points from the 2010 survey.

  4. MILLENNIALS MOVE INTO FULL VIEW • Although many financial institution managers may be weary of the emphasis on the Millennial consumer, 25% of all credit union members were Millennials during Q1 2016, compared to 20% during Q1 2013. • According to The Financial Brand’s 2016 State of Financial Marketing report, 55% of participating credit unions said acquiring new members was one of their top-three priorities, and especially Millennials, as they begin to form families and start careers. • The Financial Brand Report indicates that financial institutions will be marketing products focused on Millennials during the next 2 years, with the top two being mortgage loans, 64%, and mobile banking solutions, 61%; however, financial education is 12th, at 24%.

  5. DEVELOPING A DIGITAL PERSONA • According to a January 2016 study from SimilarWeb, while most US industries generate almost 50% of their online customer traffic via the mobile channel, it’s just 39% for the leading credit unions. • The study also found that the average duration of visits to credit unions’ digital banking channels via a desktop computer was 6 minutes, 32 seconds, compared to 3 minutes, 24 minutes on a mobile device and 2 minutes, 44 seconds on an app. • Although the SimilarWeb study revealed that social media “was the least significant source of Web traffic and referrals,” Facebook “likes” for 169 credit unions representing a third of all members increased 13.2% from Q4 2014 to 3.34 million for Q4 2015.

  6. WINNING THE HEARTS AND MINDS OF MILLENNIALS WITH MOBILE • According to Salesforce Research, 82% of Millennials view mobile banking services as beneficial to credit unions who want more young-adult members; however, just 27% of 79.5 million Millennials are members, compared to almost 50% of adults older than 36. • The research also found that Millennials are 1.3 times more likely than Generation X members and 2.0 times more likely than Baby Boomers to rely on a mobile banking app for regular banking activities. • This disconnect is further revealed in the 37% of Credit Union Times readers who said in a poll that they didn’t know if their mobile app had increased member loyalty in terms of services and revenues per member, although 47% said their mobile app had.

  7. ADVERTISING STRATEGIES • Instead of running TV spots with people stating they could only obtain an auto loan from a credit union (which many credit unions do), credit unions should share a more positive message, with various audience types extolling the benefits of a credit union auto loan. • Engage with Hispanic American Millennials by running English-language and Spanish-language spots on both types of radio stations. Use Hispanic American voices to describe, “America’s Best Ideas,” from their perspective, which include credit unions. • Since the majority of credit union members are older than 36, promote services, such as wealth management, retirement planning and insurance, and that credit unions have just as highly qualified professionals as banks to help customers with these needs.

  8. NEW MEDIA STRATEGIES • With email one of the most credible channels to reach Millennials, credit unions should develop comprehensive email lists, and then initiate campaigns that help Millennials improve their financial education, which is what many of them want and need. • As such email campaigns generate results, invite responders/participants to share short videos on Instagram and Snapchat in a series called “What I Learned Today About My Finances” or “How My Credit Union Helped Me Take Control of My Financial Future.” • Research shows credit union customers who actively use credit card rewards programs use their cards much more than inactive users. Use social media to share ideas of how customers can use their cards daily or weekly and how quickly rewards points accumulate.

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