By Dan Kaiser
Sponsored by CUNA Mutual Group.
I came across an interesting stat the other day and had an enlightening conversation soon after. I’ll get to the conversation in a bit, but first the stat:
According to the Pew Research Center Internet & American Life Project, May 2013 Tracking Survey, 56 percent of people aged 45 to 54 (younger Baby Boomers) own a smartphone.
The younger age groups had the ownership percentages you would expect–high 60s to low 80s. But the stat above caught my eye--in that group, which has established itself financially and is starting to seriously plan for retirement, a majority have smartphones. Even the next age bracket of pre-retirees–55 to 64–had a surprisingly high penetration of smartphones at 39 percent.
The takeaway for me was that credit unions need to address the mobile channel to reach all their members, not just Gen Y. A CEO for a rural northeast credit union recently told me that they were waiting on mobile because the technology wasn’t relevant for their members. I trust he knows his community, but I’m not sure how long a CU can wait.
The enlightening conversation came in a summer’s end presentation from our college interns. They had hosted a focus group with 20 or so of their Gen Y peers. One of the insights they shared jumped out at me. For their first major financial life event–auto purchase–focus group participants were uniform in their desire to come into a branch and have a loan officer guide them in a face-to-face transaction. It challenges our assumptions that the younger generations exclusively want a technology channel.
My conclusion is that credit unions can’t expect to have any one channel dominate in the future, whether it’s the convenience of high tech or the differentiating personal touch of face-to-face. According to “The Future of the Branch” study by Filene Research Institute, credit unions need to manage their channels in a more holistic fashion, so members can move seamlessly from one channel to the next. Projections from the Tower Group show branch, ATM and contact center interactions flat or slightly growing, with online (including mobile) growing rapidly. Channel growth is additive, not reductive. New channels are just that: new channels. The challenge is to efficiently and affordably meet members’ needs in the channels they desire.
Dan Kaiser is SVP/lending products for CUNA Mutual Group, a CUES Supplier member based in Madison, Wis. Reach him at 608.665.6243. He will be a featured speaker at the free, fourth annual Online Discovery Conference on Oct. 1.
Also read "CU (Shared) Branches Can Facilitate Gen Y Dreams" and "Does Chicago's 'Cupcake ATM' Suggest Creative Options for CUs?"
CUES Supplier member and strategic provider Cornerstone Advisors has a wealth of expertise in helping CUs with channel strategy and management.
