What Do Young People Want and Need?

What do young people want and need from their financial institution?

Tim McAlpinePRESIDENT & CREATIVE DIRECTOR

CURRENCY MARKETING

CREDIT UNION MAGAZINE, APRIL 1969

Although the average age of today's population is getting younger, the average age of today's credit union member keeps creeping upwards. But credit unions can remain young—in thought, service and membership—by serving today's youth as well as their aging membership.”

“

Gen Y and Z1

Young adult staff2

What young adults need3

Young & Free learnings4

• Founded in 1990• Based in Canada• 80% of business is in U.S.• 100% credit unions

30 and counting!

currencymarketing.ca/think

What makes Gen Y and Z tick?

1

Silent1928-1945

Baby Boomers1946-1964

Gen X 1965-1979

Gen Y1980-1996

Gen Z 1997-Now

78million

GEN Y

50million

GEN X

76million

BABY BOOMERS

23million

GEN Z

7 more years left in this generation

SOURCE: CUNA, CUCC, U.S. CENSUS, WIKIPEDIA

35

NORTH AMERICAN

Averageage

The great divide

48UNITED STATESCREDIT UNION

MEMBER

CANADIAN CREDIT UNION MEMBER54

0

3

5

8

10

1989 1996 2000 2002 2006 200817of the population is between 18 and 24

%

SOURCE: CUNA MARKET RESEARCH

4 %of credit union members are between 18 and 24

40 TRILL

ION

BOOMERS

$

X + Y+Z

98of next gen inheritors CHANGE advisors, and move away from their parents existing banking relationships

%

SOURCE: THE RUDIN GROUP

anti hype technology confident spenders savvy cool goals college respect

planning influence truthful authenticity distrust forward thinking family

questioning quality media university wary friends fun world view connected






questioning quality cool truthful truthful confident savvyYGEN

Gen Y‣ Follows Generation X

‣ Largest generation in history

‣ Born from 1980 to 1996 (17 to 33 in 2013)

‣ Socially conscious‣ Distrust companies and media

‣ Could care less about credit unions!

Gen Y‣ Entering and finishing college

‣ Finishing college and university

‣ Planning five years ahead

‣ Looking forward to relationships‣ Confident but wary

‣ Practical world view

Gen Y‣ Respect parents and education

‣ Shopping is an event, not a chore

‣ Raised on texting and IM

‣ Social networking is huge‣ Open to spirituality

‣ Indifferent to Christianity









questioning quality cool truthful truthful confident savvyZGEN

Gen Z‣ Follows Generation Y

‣ Born from 1995 to 2011 (2 to 18 in 2013)

‣ Smaller than Generation Y

‣ Only knows of a world with the Internet‣ Faces a dismal economic picture

Growing up digital‣ Constantly connected

‣ Phone serves as everything hub

‣ Internet access mostly via computer

‣ Still regular TV watchers‣ Digital connections trump money, music, movies

‣ Reluctant to disconnect

Growing up digital‣ Legally or not, Facebook is the place to be

‣ Constantly chatting, often online

‣ More at ease socializing online than offline

‣ Spenders first, savers second‣ Sensitive to family’s financial situation

‣ Parents have mixed feelings about social networks

Growing up digital‣ Both online and offline shoppers

‣ Parents usually pay online

‣ Tethered to parents for shopping

‣ Economic concerns weigh heavily‣ Girls more concerned about war and crime

‣ Pessimistic about the near term

Young adult staff

2

Typical staff pictures

Typical board pictures

Credit Union Central of Canada’s National Young Leaders Program

cucentral.ca

World Council’s Young Credit Union People (WYCUP)

woccu.org

CUES Next Top Credit Union Exec

ntcue.com

The Cooperative Trust

trust.coop

CU Water Cooler

cuwatercooler.com

Positive energy and a palpable sense of frustration

“I’m out!”

I wanted to stay, but I had to better myself.”“

YOUNG MALE MARKETER WHO RECENTLY LEFT A $90 MILLION CREDIT UNION FOR A

CAREER IN ANOTHER INDUSTRY

We see this huge opportunity to turn this very archaic industry into something huge, but we all see the same brick wall from our credit unions.”“

YOUNG MALE MARKETER WHO RECENTLY LEFT A $90 MILLION CREDIT UNION FOR A

CAREER IN ANOTHER INDUSTRY

“We aren’t like our parents, stuck in a rut

for our whole life.”

I wonder if the accessibility to information, the mobility of the workforce and the global awareness of a multitude of complex issues leads some of my generation to say, ‘I’ve contributed to the tackling of these financial issues; maybe I’ll tackle something else for a while; the world needs me!’”

BEN IS AN ADVISOR AT $800 MILLION MENNONITE SAVINGS AND CREDIT UNION, ONTARIO, CANADA

“

Mark Zuckerberg

Jack Dorsey

“My credit union doesn’t behave like

a credit union.”

The bill of goods that has been sold to young credit union professionals is that our model puts our members first (and profits last). What’s hard to understand, however, is why our response to the economic collapse has been so similar to that of the banks we were told had business models that were completely foreign to ours.”

MATT DAVIS, INNOVATION DIRECTOR AT THE FILENE RESEARCH INSTITUTE,

MADISON, WISCONSIN

“

“I love credit unions, but I can’t stand my credit union.”

The reality is, many credit unions today have lost sight of their original purpose of people helping people. They suffer from the myopia of immediate stressors, the fear of change, and can’t shake loose from the inertia of what has been. I can’t tell you how many credit union employees I’ve heard say, ‘I love credit unions, but I can’t stand my credit union.’”“

BRENT DIXON, YOUNG ADULT RESEARCH ADVISOR AT THE FILENE RESEARCH INSTITUTE

AND THE CREATOR OF THE COOPERATIVE TRUST

“We want to make positive changes that will

push our industry”

Title here

In an industry that is already old-fashioned in many ways, smothering our voice becomes a de-motivator. I think that’s what causes people to leave it altogether. I believe in the possibilities of what we can be, and that’s why I’m committed to the movement.”

RONALDO HARDY, CEO AT $400 MILLION LA CAPITOL FEDERAL CREDIT UNION, LOUISIANA

“

“I’m in for now, but frustrated!”

“The saddest thing about the credit union system right now is it’s

inability to articulate a vision.”

A YOUNG CANADIAN CREDIT UNION PROFESSIONAL IN HIS 30S

It is the responsibility of senior credit union leaders to create a sense of mission or vision that can feed and sustain the idealism. In Canada, this idealism has essentially evaporated. Our credit unions operate profitably and professionally, but our operations are bland and undifferentiated as we navigate the unclear cultural relevance of being a credit union.”

“

It’s not all doom and gloom

“I’m in for life!”

MATT VANCE, MARKETING/COMMUNITY MANAGER AT $139 MILLION INDUSTRIAL

CREDIT UNION, WASHINGTON

I have a voice and I see myself as part of the solution. My credit union was the first to give me a shot right out of college. I was handed the keys to a marketing department at the age of 24. I’ve had an amazing opportunity to learn, try new things and fail and grow over the past five years.”“

I have been allowed to bring some of my own innovation to the credit union and run with it. This, added with my current role, has provided me with a greater purpose and it has made all the difference. It has allowed me to be more engaged, more committed and wanting to do more for my credit union, along with providing me with the motivation to do a better job in my current role. By being provided with these types of additional opportunities and responsibilities, I do believe I will be a lifer.”

“DEVIN SELTE, CORPORATE TRAINER, LEADERSHIP

DEVELOPMENT AND CHANGE LEADERSHIP AT $10 BILLION SERVUS CREDIT UNION, ALBERTA, CANADA

“My personal values are so aligned with

the mission”

WILLIAM AZAROFF, DIRECTOR, BUSINESS & COMMUNITY DEVELOPMENT AT VANCITY,

$18 BILLION, BRITISH COLUMBIA, CANADA

I don’t think age or size of organization has anything to do with it. I think the fact that my personal values are so aligned with the mission of Vancity is instrumental and perhaps completely unique. For me, that is the critical ingredient.”“

It’s not about the money‣ A credit union that believes in innovation and free thinking

‣ A superior who they respect

‣ A belief that they are part of something bigger than just their own credit union‣ Continued educational opportunities

More success ingredients‣ A personal passion and purpose that aligns

with credit unions

‣ Room to try new things

‣ Opportunities for growth‣ An obvious path for advancement

More success ingredients‣ Flexibility on hours and location

‣ Casual environment

‣ Lack of politics

‣ Young credit union professionals appear to thrive at larger credit unions

What do young peoplewant and need?

3

Chris and his friends tell us everything we need to know...

I need a bank that tries to understand.”“

Show you understand‣ Explain the credit union difference

‣ Listen and show compassion

‣ Use straightforward language

‣ Offer tailored products and services‣ Deliver plain-English financial education

‣ Provide do-it-yourself accessibility

69of consumers ages 18 to 24 are “not at all familiar” with credit unions

%

SOURCE: CREDIT UNION NATIONAL ASSOCIATION’S (CUNA) 2011-2012 SURVEY OF POTENTIAL MEMBERS

5of Gen Y will consider a credit union the next time they need a financial product

%

RON SHEVLIN, AITE GROUP ANALYST

SOURCE: AITE GROUP ENGAGING GEN Y: CULTIVATING A NEW GENERATION OF BANKING CUSTOMERS

Free debit card for the ATM.”“

Transaction products are very stickyOffer free access to:

‣ Online banking

‣ Online bill-pay

‣ E-statements‣ Offer relevant debit rewards

15Your first credit card lasts

YEARSON AVERAGE

Average credit card debt for a college senior2,846$

Characteristics of a responsible card‣ Start with low introductory rate that rises steadily and

predictably

‣ Allow three over-the-limit or late-payment fees per year

Characteristics of a responsible card‣ Link to a savings or investment account and offer

“overpay” option or cash back to savings automatically

‣ Share credit scores with your members regularly

Customization

First was the traditional

flame job, which I used to modify this

lame-ass card.

Swimming in debt from student loans.”“

$20,000

In the past decade, average student

debt levels rose by over $10,000

$9,250

By 2004, people under 25 were the fastest growing group in

BANKRUPTCY DECLARATIONS

Student loans program‣ Huge opportunity: A generation of well-educated and

disenfranchised young adults who need help

‣ Concentrate on consolidation

‣ Offer a lower-than-standard rate‣ Communicate the benefits of one bill instead of many

I just bought a new car that I can’t afford.”“

First car loan‣ Great opportunity to start long-term relationship

‣ In addition to credit score, evaluate on character, capacity and collateral

‣ Bundle with checking account and require automatic payroll deposit

A credit union is where you need to be.”“

14% 4%

8%22%

16%

30%

Consumer Trust by Age

Younger consumers trust banks while older consumers trust credit unions most

“How much do you trust the following entities with your money?”

% calculation: Top 3 box responses (“trustworthy”) less bottom 3 box responses (“not trustworthy”)

18–34

BANK CREDIT UNION

SOURCE: MCKINSEY FINANCIAL INSTITUTIONS CONSUMER INSIGHTS SURVEY, 2009

35–54

55+

Education and technology are key‣ Don’t assume young adults know or care about your

credit union

‣ Build trust over time

‣ Stress accessibility (shared branching and ATMs)‣ Keep up to or ahead of your competitors’ technology

63 of the population is comfortable with making payments on their smart phone as soon as the service becomes available

%

SOURCE: MASTERCARD

Checking my account at 2 a.m.”“

Self-service is the new service with a smile‣ Modern online banking system

‣ Mobile website

‣ iPhone and Android banking apps

‣ Personal financial management tools‣ Remote deposit capture

Younger members want mobile cheque deposit, external account transfers, online account opening, instant withdrawal of bill payments, cheque image viewing, pending transaction viewing, and budgeting tools.”

“

Be aware of new competitors

ONLINE BANKSare your real future competition

86 of online bank customers said customer service is the reason they would not switch

%

ROB RUBIN, FACILITAS

SOURCE: YOUNG ADULTS EVOLVING FINANCIAL PREFERENCES, FILENE RESEARCH INSTITUTE

simple.com

moven.com

“The people you see here are outspoken fans of Virtual Wallet – that's how we found them. To thank them for

spending a day talking to us about life with Virtual Wallet, PNC offered them each a gift.”

AND OF COURSE...

And finally, don’t forget what makes credit unions special

I need a place where I won’t be ignored.”“

Young & Free learnings

4

Launched September 2007

Credit Union Central of Canada• National CU Innovation Award

CUES Golden Mirror Awards• 1st place coordinated campaigns• 1st place segmented campaigns• 1st place for PR

CUNA Diamond Awards• 1st place for PR

Forrester Research Groundswell Awards• 1st place in the talking category

MAC Network Awards• Gold Award for market segment program• Gold Award for PR• Gold Award for websites• Best of Show MACQUEE

MAC Marketing Now Awards• Winner video• Winner blog• Winner podcast• Winner social media engagement• Winner social media personality

MACU AIME Awards• Gold AIME new product launch• Silver AIME coordinated campaigns• Silver AIME radio• Silver AIME websites• People's Choice Award

Recognition

You deserved to win.You did a great job and just as important, actually delivered business value with your application. The big companies did too, but your application was more impressive based on the creativity and the results delivered on a limited budget.”

“JOSH BERNOFFSENIOR RESEARCH ANALYSTCO-AUTHOR OF GROUNDSWELL FORRESTER RESEARCH

2006 2007 2009 20102008 2011 2013

Growth

UNIVERSALPRINCIPLES

Make a big deal out of everything

29 surprise events to date

Don’t stand still

2008

2011

2013

Fill the calendar

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MFCU2011 MFCU2011 - Web Banner TNL Coop.indd 10-4-2011 11:14 AM Kevin Castillo / Kevin Castillo

CURRENCY MARKETING

IMPORTANT: This art has been checked and proofed for accuracy. It is the responsibility of the client to make all final approvals before the release of this art. Please double check for accuracy.

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Keep doing new things

318 APPLICANTS

Inspire people to creatively spread the word

Make yourself the center of the local universe

Be ever present on and offline

Don’t dismiss traditional media

#1 Friend

#3 Facebook

#2 Radio

Where did you learn about this opportunity?

Spend as much time in the community as you do online

Deliver on the promise of financial literacy

Collaborate

Recruit and engage young employees2Offer relevant products and services3

Integrate your marketing4

Understand Gen Y and Gen Z1

Thanks!Tim McAlpinePRESIDENT & CREATIVE DIRECTOR

CURRENCY MARKETING