MADISON, Wis.—That credit unions are at risk of continuing to lose members to fintechs and even big banks is well known. Less well known is the key to changing that, according to one person—and that key is communication.
Ronaldo Hardy, president and CEO of the National Association Of Credit Union Service Organizations (NACUSO), told TruStage’s Discovery 2024 conference that communicating with Gen Z and the generations behind it requires, first and foremost, an understanding of the generations.
“This is obvious: Gen Z expects a first-class digital experience,” Hardy said. “They want everything to be at their fingertips, everything to be able to work quickly and they want it to work. They want to be able to access and operate all aspects of their financial institution through their cell phones.”
That’s a given. But beyond that, he explained, the younger consumers credit unions very much are seeking to attract and retain as members expect their FIs to offer financial education. And that, Hardy reminded, is something CUs have traditionally done well—but perhaps aren’t doing as well now.
“But we need to learn how to repackage our financial education to be effective in reaching this new generation,” Hardy said. “Yes, we provide access to the information they need. However, if we convey it in a way they cannot consume it, it will not be effective.”
Trust Us. No, Seriously
Trust and transparency is also important to younger members, Hardy said, citing a recent survey that revealed 85% of Gen Z respondents said trust in a brand had a major effect on their purchasing decisions.
“So, when it comes to Gen Z and them engaging with your credit union, building trust and transparency is pivotal,” Hardy said.
Trust goes beyond a credit union just keeping its promises. Hardy said it’s communicated and reinforced in other ways, including through focus on communities and environment.
“They want to make sure you are focused on sustainability and social responsibility,” he said. “We are dealing with a generation that's very committed to making things better. What part of your organization is focused on environmental sustainability? What have you done in order to make sure that you can participate in making that impact? And don't keep it a secret. If you're doing it make sure you let your members know.”
Of course, Hardy added, innovative products certainly catch the attention of younger consumers.
“They want crypto, they expect P2P…technology and access to digital products and services will certainly do wonders for you in reaching this generation that expects these things from you,” he said.
Fast—And Personal
And yet amidst all the technology, those same younger members and prospects want personalization.
“Think of all of the many places that you and I visit on a regular basis, companies that have crafted an experience for us that's personalized to us, based upon the activities that we do on a regular basis,” Hardy said. “We have to be thinking through how we create those same experiences for our members because this expectation is developing in every other aspect of Gen Z’s lives.”
One Surprise
Younger members are also focused on data security, something Hardy acknowledged surprised him.
“I look at the younger generation and it feels to me like they don't always care about keeping things secure,” Hardy told the meeting. “However, even though they might not always do what they need to do to keep things secure, they do expect you to be doing what you need to do to keep them secure— having the appropriate security measures in a time where cybersecurity is becoming such a threat to all of us.”
The Core Issue
Ronaldo Hardy speaking to Discovery Conference.
With all of that said, Hardy emphasized everything comes back to the issue of communication.
“Here, we could stand to grow as a movement in how we create compelling content that is going to connect with younger generations,” Hardy said. “I think about companies like Apple, which was built years ago targeting my generation, specifically understanding that if they could target us and reach us well that the technology they created would also reach additional generations. I believe that this is the thing that we have to do right now: Our approach to communication needs to evolve to adapt to what the market is doing.”
Getting Uncomfortable
The evolution needed may force some credit unions into an “uncomfortable” space.
“What's happening from a creative perspective in communication today stretches outside of the boundaries of the normal comfort of financial institutions,” Hardy said. “We are living in the influencer generation. So much of the content that is being consumed on a regular basis has a ton of creativity put to it. As a matter of fact, influencers and micro-influencers are creating entire careers from this. You may be thinking to yourself that's just a hobby. No, they're actually multi-millionaires who wake up every day to create content in a period in which content is moving everyday.
“Consumers are literally consuming content all day long. You have to be thoughtful in how you are building your content.”
‘Grabbing Your Attention’
Hardy told attendees that he knew that many of them were likely looking at other communications sources as he was speaking.
“Something is always grabbing your attention. Messages are moving all the time,” he said. “But the messages that are the most creative and the most thoughtful are the ones that typically resonate the most.”
Hardy concluded by urging credit unions to make their communication to members instant and direct, and allow members to view information in an on-demand environment.