How To Build Millennial Loyalty

We aren’t known for our tight relationships with financial services providers, but credit unions can set their business apart from the competition.

Millennials pose a growing problem to the financial services industry: They lack banking loyalty.

In a 2015 FICO survey, only 25% of millennialrespondents reported having strong brand loyalty to a financial services provider. The credit score company further reports thatmillennials are five times more likely than those 50 years or older to close all accounts with their primary bank and three times more likely to open a new account with a primary bank.

This is not good news for credit unions.

The good news, however, is there are ways to appeal to millennial members. But first, you need to know why millennials are leaving. It boils down to competition, fees, and access.

The Importance Of Competition, Fees, And Access

Competition: There are a lot of options for financial services, and millennials take advantage of that. If an institution doesn’t meet expectations, then a millennial will find one that does. According to a Facebook survey, 45% of millennials are open to switching banks, credit cards, or brokerage accounts. My financial well-being is of utmost importance to me. Brand loyalty is second.

Fees: Fees, such as overdraft fees, monthly maintenance fees, withdrawal fees, etc., are a major reason why millennials leave their institution. According to a 2015 article on, Community banks won with younger customers last year, netting a 5% increase in account holder’s ages 18 to 34, while credit unions recorded a 3% gain. According to the same article large banks lost, 16% of them over the same period.Big banks are charging more for their fees compared to smaller banks and credit unions. This is where credit unions can excel, by marketing themselvesas the local, member-friendly alternative.

Access: Branch banking is a crucial component of the banking experience. Human interface is sometimes necessary to make deposits, resolve problems, and seek financial guidance. This is not just a millennial trend. According to a survey at, Nearly half of Americans, 45%, have been in a bank branch for personal business within the past 30 days. According to the same survey branch loyalty is evenly split among generations. You need to have multiple personal touchpoints to serve your members. Advances like mobile chat and interactive teller machines (ITMs) certainly help, but afriendly face is irreplaceable.

The Do List

So, how can a credit union apply this knowledge?

First, take advantage of the fact millennials are fleeting. It sounds counterintuitive, I know, but use that lack of loyalty to market yourself as an alternative financial institution with all the benefits and none of the hassles of anational bank.

Second, if you’re part of a shared branching network, make that obvious. The main reason I stay with major banks is because I know there will be a branch wherever I go. Availability and ease of access are important to me, especially when it comesto cashing checks. Mobile deposit has alleviated some the need for a physical location, but deposit limitations mean I still need a branch to deposit larger checks. I need to know if I can access or manage my money at a physical location whereverI might be.

Finally, make the benefits of banking with you easy to find. I want to see you online, in videos, and even on TV. Don’t forget channels like Facebook and Twitter. Millennials drive more than 40% of the financial conversation on Facebook, with 76% of money conversations taking place on mobile. Join the conversation and be the alternative. I need to have a basic idea of what you are and what you offer before I’ll commit tolooking you up on Google.

The Don’t List

Some credit union sites I’ve visited make it difficult to ascertain membership information. One site even used census tract data and left it up to me to determine whether I was eligible. I have lots of options, so make it easy for me to choose you.I want all the information I need on one page. I won’t pursue membership down the rabbit hole; I just don’t have the time for it.

Don’t rely on a smartphone app alone to bring in younger members. You can’t expect millennials to stay just because they can bank from their phone. It’s the overall mobile presence and how applications benefit me that matter. Do youoffer smartphone wallet services for your credit/debit card? Do you offer live chat via your app? These are just some things to consider.

Don’t ignore the whole customer experience. According to J.D. Power’s U.S. retail banking satisfaction study, improved technologyand better in-person interaction with millennials has driven the nation’s largest retail banks ahead of the credit union community. That and is important. Millennials want an efficient mobile system for quick, daily accessto their banking needs, but they also rely on branches to solve problems and provide guidance. Millennials want their branch to be a personal extension of their banking experience, not just another retailer.

Mark Manicone writes the My Generation blog for He is a student at the University of South Carolina in Columbia, SC. Contact him by email at

February 13, 2017

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