By Ray Birch
RIVERSIDE, Calif.–Altura Credit Union is reporting impressive growth figures it is attributing to a Millennial-led campaign to focus on Millennials, auto lending, and a tough decision it made to pull back on shared branching.
For Q3 2017, the $1.28-billion Altura reported net income of $8.091 million, an increase of 9.9% compared to the same period in 2016. Total assets also increased 4.8% over the comparable period last year, while net worth rose to of 10.7%. Through the first nine months of the year total loan balances were up 15.19%, driven primarily by indirect auto loans. The credit union has also begun offering more mortgage loan options and its new Uphora Rewards Credit Card program.
CEO Jennifer Binkley, who joined Altura in February of 2017, said the credit union has been effective at adding Millennials to the membership, and along with that checking and interchange growth.
“We are seeing a marked increase in our younger members and more products and services per household,” she said. “We started several years ago focusing more on Millennials, creating a Millennial account.”
Hassle Free
That account, iChecking, is a simple “hassle free” account for young adults between the ages of 18-24. The CU’s ads explain “At that age, there are plenty of things going on like getting ready for college, graduating college or building your career. A checking account isn’t something you should worry about.”
The free account comes without a minimum balance requirement and gives Millennials five card designs to choose from. The card can be personalized with a “nickname” or phrase.
“This account has been very successful,” said Binkley, who added the product is promoted at two local universities within Altura’s field of membership. “We show up when students return to sign up for classes and we always get a great response.”
What has led to the interest in iChecking, said Binkley, is letting Millennials guide the program.
“We created an internal marketing team of our own Millennial-age employees to help us develop outreach campaigns to these potential members,” said Binkley. “The results have been incredibly successful. We are 127% over our 2017 target for new members in this age group.”
Not Easy Decision
Binkley said at first it was difficult for the credit union to give up direction for the program to its young adults.
“I have to admit that I would not have chosen some of the advertising approaches they did,” said Binkley, who is 44. “The team, in the past, has looked at some of the concepts we have designed and did not like any of them.”
Binkley said that all of the decisions related to its Millennial marketing are driven by the youth team.
“We do an annual fall giveaway associated with the account and for the last two years we gave away tickets to Knott’s Scary Farm, which is the Halloween event at local Knott’s Berry Farm,” said Binkley. “I definitely would not have chosen that giveaway, but it has been incredibly successful. Millennials know what Millennials want.”
The credit union also sends out regular surveys on its Millennial account to the rest of its Millennial staff who are not on the 12-member team. Binkley said that those who provide regular feedback are asked to participate on the team as turnover opens seats.
Asking for feedback is what also led to the decision to pull back on shared branching, explained Binkley.
She explained Altura’s regular member polls consistently found members complaining about long wait times at its branches. The CU investigated and found branches were understaffed, but also learned that 40% of transactions at its offices were shared branch transactions. Binkley noted that there are not many other credit unions located near Altura branches, which likely has driven up the amount of shared branch business.
Long-Term Objective
Altura made the move late last year and is no longer providing free banking services in its branches to members of other credit unions, but is continuing to participate in CO-OP Shared Branching to allow no-fee usage of all Altura ATMs for members of other credit unions. Altura still pays for its members to use another CU’s shared branch.
“We are giving up significant revenue,” said Binkley about the decision.
She emphasized that member service and keeping members happy and loyal to the credit union long term weighed heavily into the decision.
“The shared branching model is something our board and credit union supports and we want to participate in any way we can,” said Binkley. “But we have to take care of members first and build the cooperative. But because of the number of complaints that were coming in—some members saying they had to wait 20 minutes in line—we determined shared branching was no longer working for our membership. We needed to make our service more convenient.”