By Frank J. Diekmann
Just in time for Halloween, over a five-day period in Las Vegas (where it’s always a certain scary holiday), two different groups of consumers appeared before different credit union audiences as much more than apparitions—they made quite mortal appearances and handed out both tricks and treats, revealing a Milky Way of financial decision-making, some M&Ms (money mysteries), Mounds of reasons they do business with banks and competitors, and more than one observation that brought some Snickers.
I mean how often do you hear a credit union member tell a credit union audience that a credit union “sucks?”
To their credit, both of the five-person focus groups that appeared before two different CU meetings offered a pumpkin's worth of unvarnished, may-not-be-what-credit-unions-want-to-hear observations that brought to real-life what are typically presented as dull data points in reports or bullets in PowerPoint presentations about why people do what they do, including not being able to explain the why (which is why you see more attention being paid at CU marketing events to brain science).
Busting Stereotypes
The first to open the doors on their financial lives was a demographic every credit union—and bank and fintech—is trying to get its name in front of and then keep it there: college students. Five undergrads, all finance majors at UNLV, took to the stage as part of a session during Mitchell Stankovic’s Underground Collision, where they responded to questions about their financial habits.
This session was something of a stereotype-buster around financial services, beginning with the first student to speak, who despite a future in which climate change is a real threat to the only planet he has to live on, and even though with his diploma will also come a national debt that comes to just over $100,000 per person (and climbing), said his view is “the future is bright. We’re in America and there really isn’t anything for us to worry about. History is bound to repeat itself and regardless of the turmoil we are experiencing, it is going to be bright.”
Ahh, youth.
Gen Tech Not Always a Tech Gen
And speaking of youth, it’s supposed to be a known-known that younger members prefer (demand) to deal with technology over humans. We’re told they’re Gen Tech, that they are “digital natives,” and that their first language is a mixture of texting abbreviations and emojis. And yet during both consumer panels a young person said, “I don’t like to go into a branch, but I really hate the bots on the customer service side. I think the future is going to be kind of a hybrid. Our generation doesn’t like the 100% technological interface. We like the connections between people, the relationships.”
He offered this recommendation: “I would just say to people in management with credit unions to take some time and talk to people in my demographic.”
Other issues that made the syllabus with the students:
- They said the fintech apps they like include Mint and Acorn, with one person saying that what they have in common is “easy integration into your life.” There was agreement the apps made it “easy” to see one’s finances aggregated in one place.
- Trust, which credit unions love to talk about, was cited as a deal-maker.
- Not every generational stereotype was dragged to the desktop trash bin and deleted. “…We are a generation looking for instant satisfaction. Wr are looking for things to be done (at the snap of a finger). We like to have processes that are quick, clean and easy to use.”
The Frank Five
Meanwhile, there was an extra-large bag of tricks and treats to be taken home during a consumer panel held as part of the California and Nevada leagues’ REACH Conference, and you should grab as many pieces as you can.
I highly recommend you give it a read.
This quintet of members and non-members-alike revealed just how big the challenge of winning consumers’ walletshare really is, not so much because of big banks’ budgets or some snazzy fintech app, but just due to good old-fashioned inertia and lack of knowledge.
All of the panelists, three men and two women, were in the sweet spot age range of 28 and 39. The panel was assembled by Dr. Neil Goldman, who also moderated and who deserves credit for putting together and then leading of the most insightful such discussions since many of those Halloween ghosts were still walking this earth.
Only one of the five said a credit union was his PFI (Navy Fed), one had a car loan through a credit union, and the others used mostly national, name brand banks and USAA. One person also had something of a head-scratcher of a financial strategy, with what sounded like a dozen-plus different relationships.
Love Those Rewards
But they did have one behavior in common and that was how motivated they were and are by rewards programs and how ingrained the expectations of rewards are in their decision-making, mostly in the cards they use.
As a man named Josh summed up, “For me, it’s all about rewards. I try to use them to my advantage.” Added a woman named Andrea, “I love playing the (card) game. I emotionally can’t spend money without feeling like I’m getting something back…I won’t spend (on a card with an) annual fee. Morally, I won’t spend money to just spend money; it hurts my soul.”
As was heard in the first panel when it comes to personal contact, Keith, the member of Navy Federal, said what he likes is that “you can always talk to someone.” A man named Diego added, “I prefer to talk to someone other than a robot or AI.”
Only one person said she prefers not to “talk to anyone.” She’d rather send a text.
While there was some intriguing talk about the use of branches and cards, the real takeaways for me included:
What Should Financials Provide and What Do You Value?
Prodded by Goldman over what they are really looking for, members of the panel again cited card rewards, before the discussion moved a little deeper.
“I feel communication is key,” one person said, before adding a sentiment I’m pretty sure we all share. “Being able to get ahold of someone rather than having to go through eight or nine people” is critical.
Another person followed with an answer that while truthful, also has to be frustrating for credit unions.
“Specifically, resources,” said panel member Gabriella in response to Goldman’s query. “I would love a bank to say, ‘This would be more efficient for your money or time.’ Provide me with what I don’t know to make my money work better. That would be really valuable to be with a bank that looks out for my best interests.”
Credit unions across the audience and reading this must all be reflexively shouting, ‘That’s what we already do!” But it's also evidence once again that just because you build it, it doesn't mean the will come.
What Would You Like to Know More About?
“I feel like not a lot of people in our age group know a lot about credit, how it works, how to increase your credit score,” said Keith.
As CUToday.info has previously reported, just FYI, one of the most Googled questions is, “How do I increase my credit score?”
And then, maybe just to turn up the frustration a bit more, Keith added, “There are not a lot of resources you can go to that are cost-effective to plan your life.”
OK, everyone, all together now: “Yes, there are!”
Josh said he has a financial advisor, but would like more personalized advice. Diego said a “friend” helps him with his finances. (One member of the panel said if she had gotten better advice on her mortgage she would have been able to buy more weed.)
All said they would look to their apps, online and Google when they needed help, and would not think to first look to their first PFI. Several other said they also turn to social media “influencers” for their financial advice. Because, hey, who would know more?
What is the Difference Between Credit Unions and Banks?
Goldman asked the group what they knew about the difference between credit unions and banks. One panelist said he knew they are member-owned and members have “influence.” Another said CUs are “community oriented,” and yet another offered up that all she knows is that “credit unions give you a good rate on an auto loan” (could be an indirect member). The fifth person admitted, “I don’t know much.”
What Advice Have You For Credit Unions That Want to Earn Your Business?
Finally, Goldman asked what was on everyone’s minds, which was, basically, “What’s it gonna take?”
If you’re looking for a 100 Grand Bar in the responses, you’re gonna come up Butterfingers. But there are some Oh Henry! insights.
Gabriella was looking for more life hacks (overlooking the fact credit unions are the original financial life hack). Andrea said she has two accounts with her credit union and their “app sucks.”
“I wish my credit union would invest more in technology,” she said. Added fellow panelist Josh, “Credit unions are just not up to par with the big banks technologically.”
And Diego added once more in case anyone missed just how fundamental the needs of most Americans are: “If you could provide more credit information, how to improve it, give me more knowledge.”
Frank J. Diekmann is Cooperator in Chief of CUToday.info and can be reached at Frank@CUToday.info. Mr. Diekmann is also author of several new book, including the brand new “The Last Lyric,” a humorous satire about a murder investigation at the Rock & Roll Hall of Fame in which every line of dialogue is either a classic pop/rock song title or lyric. Available on Amazon, Apple iBook, Barnes & Noble and Smashwords. Mr. Diekmann is also author of a non-fiction compilation of the very best & worst he has seen and heard in covering more than 500 CU meetings and conferences, “501 Name Tags: How Everything You Need to Know About Business Can Be Learned at a Conference & Forgotten in the Trade Show.” It is available on Amazon, Barnes & Noble, Apple, Lulu, and Smashwords