Transcend’s Teen Account Banks On The Future

Transcend Credit Union ($526.9, Louisville, KY) is tackling a pivotal challenge many credit unions face: how to attract younger members.

Fewer than two years ago, the cooperative’s average member age was in the 50s and trending upward. As these members typically need fewer services, it falls to younger cohorts to ensure future growth and viability.

“Most of our older members already have credit cards, can pay cash for autos, and are downsizing rather than upgrading their homes,” says Darran Stopher, chief retail officer at the Kentucky cooperative. “To maintain loan growth, we needed to bring in younger members.”

At the time, Transcend was fielding growing requests from parents interested in accounts for their teens, a demographic Stopher says is underserved by most financial institutions in the Louisville and Lexington areas his credit union serves.

So, in March 2023, the credit union launched an account designed to not only attract 13- to 17-year-olds but also engage their parents. Since then, Transcend has opened more than 530 teen accounts, helping to lower the 47,818-member credit union’s average member age to approximately 47.

Most of those are new members, an added benefit that accompanies strengthening relationships with families and building long-term loyalty among young accountholders. Such success, according to Stopher, is the product of strategic planning and close collaboration with teens as well as parents to design an account that works for the young folks, their parents, and the credit union itself.

Catering To Teens And Parents

One key factor in the success of Transcend’s teen membership initiative was uncovering what teens and their parents actually want from a checking account. Focus groups with both generations helped the credit union identify must-have features.

“The teens wanted access to the account from their phones and the ability to use a debit card,” Stopher says. “Parents wanted the ability to monitor their teen’s account.”

So, Transcend built an account that offers a mobile banking app, ATM fee reimbursements, and a debit card for teens. For parents, the account gives them to ability to monitor the account, transfer funds, and set daily spending limits.

Another key feature in the teen account is overdraft avoidance. If an accountholder doesn’t have sufficient funds for a purchase, the transaction is simply declined.

According to Stopher, this balance between teen independence and parental oversight has been crucial in driving engagement. In fact, parents — who have been satisfied with the control they retain over the account — have also been “huge advocates” for the credit union.

“When they feel secure about their teens’ financial experience, they are much more likely to bring their teens into the branch to get involved,” Stopher says.

The combination of features that appeal to both generations has made this teen account one of the cornerstones of Transcend’s youth membership strategy. But there are others.

Financial Education And In-Branch Engagement

Transcend Credit Union didn’t just launch a teen account and leave it at that — it built a comprehensive educational experience along with it.

“Although parents can open the accounts online, we always recommend bringing their teens in when opening the account,” Stopher says.

There, Transcend staffers review budgeting and ensure the young member understands what it means to have sufficient funds to cover transactions. They also cover how to use an ATM, how to safely use digital payment methods, such as ApplePay and Venmo, and, if they have a job, the importance of direct deposit.

“We also cover topics such as proper use of the debit card and how to safely maintain it, such as where to keep it and not sharing it with their friends,” Stopher says. “We also take the time to log them on to mobile banking and navigate the site.”

The important thing, Stopher stresses, is that Transcend uses every interaction with young members as a teachable moment.

“We believe every moment with the teen can be a teachable moment,” the veteran CRO says.

Those teachable moments don’t stop at the branch. Transcend works with local high schools to provide workshops on personal finance, mock job interviews, and itself hires students for summer jobs.

According to Stopher, this deep community engagement reinforces the credit union’s commitment to financial literacy and fosters goodwill among educators and students alike. Importantly, it has positioned Transcend as not just a financial institution but a trusted partner in the community that helps teens gain essential financial skills that will serve them throughout their lives.

Account Performance And Long-Term Growth

As of August 2024, 530 teen accountholders held a total balance of $460,557, averaging approximately $864 per account. Additionally, the accounts generate nearly 3,000 debit card transactions every month.

Although these accounts might not significantly impact the credit union’s overall liquidity, the steady inflow does add value.

“Anytime we can get cheap deposits, that’s a win for us,” Stopher says.

Promotional campaigns also have played an essential role in maintaining growth. Transcend’s August 2024 back-to-school campaign, where it offered to match deposits up to $200 for new teen accounts, was particularly successful.

“We were able to double the number of checking accounts opened compared to what we had been averaging each month,” Stopher says.

According to Stopher, accountholders often used the deposit match for back-to-school supplies, making the promotion even more practical and appealing.

There For The Financial Journey

To juice engagement, Transcend has also run campaigns encouraging teens and parents to refer their friends in exchange for gift cards to popular coffee shops, gaming stores, and the like.

These promotions, coupled with ongoing community outreach and strong social media engagement, help keep the credit union’s teen account top of mind. Instagram has proven particularly effective in reaching teens with promotions and financial education articles, whereas Facebook has worked well for engaging parents.

Looking ahead, Transcend is a planning how to maintain and grow these relationships as teen members move into adulthood.

By offering first-time credit cards, car loans, and other products tailored to young adults, the credit union hopes to be the first choice for these members when they reach new financial milestones.

“We want to be there when they purchase their first car or home,” Stopher says.

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