Much has been written over the years about the average age of credit union membership. The premise to most analyses is that average age is rising, creating marketing challenges for some cooperatives.
Not so fast! There is plenty of indication that just the opposite is happening. The secret may be as simple as relationship building, which increases trust.
According to a 2014 Harris Poll, trust in Wall Street and mortgage lenders has fallen by 57%, half of American adults (50%) say their trust in banks has declined in recent years compared to just 18% that say the same about credit unions.
The biggest factors influencing trust across demographics are personal experience, customer care, and engagement. Known for their unmitigated commitment to advancing financial education in the communities they serve and their member-oriented proclivity, credit unions have increasingly defined themselves as the most secure alternative to traditional banking. Despite that roughly a quarter of respondents place community involvement high on the influence factor, the poll suggests that visibility in the community is what gives credit unions a nearly three-quarter favorability rating.
Big banking has unwittingly abetted their own trust decline through collusion in the housing bubble and sub-subsequent burst, government bailouts, and endless consolidations, mergers, and closures—which combined led to higher bank fees and declining interest rates on savings.
Millennials and Gen-Xers are among the most distrustful of all financial institutions. So, engaging young adults is imperative to long-term stability. The challenge is employing an approach that does not alienate older demographics.
Ironically, financial education is a viable solution and one that comes naturally to credit unions, which have had to explain their way into society. That is, as they’ve grown, credit unions have had to define member-owned financial cooperatives, how they work, how they benefit individuals and communities, and the paths to membership. Thus, credit unions have been decades ahead of the financial literacy trend.
Still, by all accessible public accounts, the average age of credit union membership is 47. A solution to reducing the average age without compromising the older demographics is to provide financial literacy programs for young learners beginning at the time they learn to read.
Several programs accomplish this but none is as highly visible as The Berenstain Bears Financial Literacy Program, which uses the iconic children’s characters to teach the money management concept Save, Share, Spend, Earn and is easily recognized by millennials and their parents, both of whom grew up with The Berenstain Bears. In essence, this high-profile program reaches multiple generations.
The program was developed by educators at Franklin Mint Federal Credit Union (FMFCU), which had been conducting financial education lessons from Kindergarten through retirement-age. Not coincidentally, FMFCU’s average membership age remained steady at 39 between 2005 and 2012 and skewed slightly upward to 41 in 2013 following a couple of mergers. At 41 and holding, FMFCU anticipates a downward tick in average membership age in 2015 and 2016, broadening by about a decade its gap with the national average.
Leading with education, FMFCU is able to cross-promote products. For example, the parents of Cub Account holders are introduced to a myriad of products like interest-bearing checking, low-interest auto loans, first mortgages, etc. Likewise, members inquiring about refinancing, second mortgages, financial planning, and the like are introduced to Cub Accounts for their children and grandchildren. The Cub Account is a product within The Berenstain Bears Financial Literacy Program suite. Available to children ten and under, it comes with perks such as a membership card, matching piggy bank savings, and a birthday bonus. For the Credit Union, the Cub Account establishes membership for life.
FMFCU’s commitment to financial education and literacy within its defined operating region and under-served areas also provides a natural vehicle for expansion of select employer groups. These efforts evolve into new branches, ATMs, and online banking opportunities—all of which are embraced by Millennials, and none at the expense of existing demographics.