We’ve previously reported on the efforts credit unions across the country are making to connect with Gen Y. Programs like in-school branches and classroom presentations for students, young adult-oriented products, and community events help credit unions demonstrate their value to the community. These initiatives develop a sense of trust between Gen Y and the credit unions—they provide examples of the kind of mutually beneficial relationship that can occur between a member and their credit union.
But how do current and new Gen Y members feel about their credit union’s services? We wanted to get a better sense of individual Gen Y members’ opinions, so we asked them for general feedback, as well as more pointed observations about the products available to them, the technological capabilities of their credit union and the quality of member service.
- A common thread running through each of these members’ comments is the importance of member service. Most of the credit unions mentioned make comfort and familiarity a high priority. They “recognize loyalty”, they are “protective”, and they exhibit a “sense of community”. This is an important advantage credit unions have—they are truly seen as members of the community.
- Several members noted low interest rates as a benefit to credit union membership. If a decision comes down to who has the best rates, maintaining area-low interest rates offers a clear advantage.
- Little emphasis on technical innovation was another common theme. An inability to deposit checks remotely through a smartphone and outdated communication services were both cited as major issues for future membership potential. This caused some members to open accounts elsewhere, to make up for the technological deficiencies.
- Outreach was cited as a problem area: word of mouth being the only way to hear about credit unions. Not all credit unions are interested in national attention due to restricted membership eligibility, but it does point to a lack of public knowledge regarding credit unions.
Here’s what they had to say:
Chris McCauley, CEO of Whizkins, Age 30, Santa Clara, CA
Credit unions can inspire more trust than big banks.
“Our company currently uses a credit union (Tech CU in Silicon Valley), and prior to moving to California, I used a credit union for personal banking. My decision to use a credit union stems from my having worked in financial services industry as a PricewaterhouseCoopers auditor and securities attorney for almost a decade and being a customer to Wells Fargo, Regions and Bank of America. I’m a bit jaded and cynical towards big banks. We found out about Tech CU by asking around in the Silicon Valley area. They were recommended by several people.”
Credit unions can provide valuable member service. Lower and fewer fees are a nice benefit, as well.
“As a company that values customer service, we seek to find other businesses that value customers too. While our credit union can pose problems at times, I can usually get a real person on the line within a few minutes to answer my questions, and they will solve them without a headache. Additionally, the fees aren’t as bad with our credit union. It also helps that this particular credit union specializes with our industry.”
But, business account setups and website security can sometimes complicate the banking process.
“Setting up a corporate account is a little arduous, and while banking security is important, the separate application we use for accessing our bank account information can create problems at times. Not as simple as login ID and password in a common browser.”
Dana Humphrey, Owner of Whitegate PR, Age 30, Astoria, NY
Credit unions are sometimes viewed as reliable friends. They are depended upon for many personal financial needs. But, business finances are trusted to larger institutions.
“I have been a member of the Chevron Federal Credit Union since I was 8 years old. I’m now 30 and own my own business. I have several business accounts with Chase, but I will always keep my credit union, too. You never know when you want to get a loan for a car or house or big purchase. Plus, because I’ve had an active account with them for so long they appreciate and recognize my loyalty and longevity with them. I will always keep a small balance with my credit union.”
Leia Ferrari, Engagement Manager at Prosper Public Relations, Age 24, Chicago, IL
Many credit unions work with universities to develop relationships with students that will last their entire lives.
“I’m a current member of a credit union in my home state of Wisconsin, although I have lived in Chicago for two years now. I chose to open accounts with UW Credit Union because it was affiliated with my university, and I’m so happy I did. I found out about it through on-campus advertising and UWCU ATMs on campus. I have nothing but good things to say about my experience with UW Credit Union. The customer service is unbeatable–particularly how proactive they’ve been when notifying me of potentially fraudulent activity on my accounts–and I’m so happy to belong. I will most likely stay a member for life.”
Low interest rates are a plus.
“Their low interest rates have guaranteed I’ll keep a credit card with them indefinitely, and will probably consider taking out future loans with them as well. I have a decent credit history but while I continue to pay off student loans I appreciate their interest rates since I rely on my (one and only) credit card fairly regularly.”
Credit unions are seen as people-driven, while banks are viewed as business-driven.
“I recently opened an account with an online bank that allows me to deposit checks from my smartphone, but I still use my credit union account fairly frequently. Based on all I’ve heard from financial experts (in books and on the radio), credit unions are much better suited for individuals like me, whereas most big name banks primarily aim to serve businesses.”
However, not keeping up with technological developments, such as mobile check deposit, can hurt their ability to compete with more forward-thinking competitors.
“The main reason I opened the online bank account, as I said, is because I can quickly and easily deposit checks from my iPhone instead of holding on to them for a few months until I can make it back to a branch, or sending them in the mail which doesn’t seem totally secure once they’re endorsed.”
Pamela Capalad, Financial Planning Analyst at WealthEdge Advisors, Age 27, Brooklyn, NY
Sometimes credit unions just have better rates and products, plain and simple.
“I am 27 years old and just joined my first credit union last week. I have wanted to join a credit union for a long time and what finally made me decide to pull the trigger was shopping around for a mortgage refinance. I had my current mortgage lender quote me on rates, which were 0.5% higher than the national average. I remembered hearing about PenFed Credit Union from a mortgage advisor a while back and decided to look into them. They ended up having a great program for their Adjustable Rate Mortgage, where they pay for all your closing costs, and offered a great rate. I went back to my current lender to see if they could match it and his exact words were, ‘I can’t even touch that.’”
But, confusing membership requirements and antiquated systems can make joining a credit union difficult.
“I looked at a couple of credit unions when I first moved to NYC. I was met with two obstacles:
“1. It was hard to get into an NYC credit union – the requirements were all so specific (i.e. you needed to live in the Lower East Side or be a welder/actor/playwright).
“2. For the credit unions I could get into, their products were not as good as a lot of regular bank products – for instance, one credit union had a $5 monthly charge for having a checking account and their mortgage rates were almost 2 percentage points above most other banks I looked into. Also, a lot of credit unions in general are so buried in past processes, that it’s often cumbersome. For instance, the only way to open an online account at my boyfriend’s credit union is to fill out a paper application and mail it to them.”
Slow adoption of new technology is a major issue.
“This credit union hasn’t quite caught up yet. For instance, you can’t deposit a check on your mobile phone; you would need to scan a copy of the check on your computer. I don’t know if I will be able to 100% move all my banking to the credit union for this reason. I am such a huge user of mobile banking that this is probably going to be a big hole for me. Their customer service has been top notch though, and that goes a long way.”
And, a lack of outreach hurts credit unions’ ability to increase membership bases.
“I feel like credit unions don’t spend a lot of time marketing to people in general, at least not in NYC. I know I had to do some serious research just to find the ones I did—and PenFed is actually based in Oregon! So far, word of mouth has been the only way I’ve really found out about credit unions.”
Kate Lawton, Brand Manager at Filene Research Institute, Age 27, Madison, WI
A strong sense of community goes a long way toward instilling trust.
“I switched from a bank to a credit union six months ago. I switched because I accepted a job with a nonprofit that works with credit unions. I was a life-long bank customer and didn’t necessarily have frustrations with my bank. I didn’t even think of the differences between banks and credit unions, to be honest. Two differences that really stood out to me were that package levels are based on the number of products you have, not the amount of money in your accounts, and the sense of community. Last time I was at my local branch, a handful of older members were there, sitting in the lobby chairs, drinking coffee, reading the paper and chatting, and the staff was really welcoming of that.”
Shekinah Monee, brand strategist, Age 27, NYC
Financial security, quality member service and a family history of membership add to the appeal of a credit union.
“I have belonged to a credit union since 2007. This credit union has been a part of my family since I was born. I have belonged to regular banks, but I love my credit union. My mother was a part of the credit union as a teacher, and when I became a city worker, I quickly opened an account. They have security during stock market fluctuations, they have great auto loan rates, and I can save a college fund for my Godchildren (and my future children). I highly recommend it to anyone.
“I had my first bank account at 12 years old. It was with a bank, that was then bought by another bank and I stayed with them until I was in college. The bank had a minimum balance, mandatory direct deposit, and there was little protection pertaining to unauthorized charges. My credit union is very protective and calls me whenever something seems out of place. I totally appreciate that.”
Terri Huggins, Freelance Writer/Journalist, Age 25, New Jersey
Personal service and good interest rates are big draws.
“I am a member of the Raritan Bay Federal Credit Union in NJ. I opened an account there because I’m a fan of the personalization and the interest rates.”
Hannah Priscilla Craig, Incoming Student at Antioch College, Age 17, Madison, WI
Credit unions are invested in their members.
“I did have a bank account before my membership with Summit Credit Union. I think the main differences between the two have been that the credit union is very much invested in making their members succeed. There are constant workshops, seminars, and counseling to educate their members. I didn’t notice that in the banking community.”
New tech services could be implemented faster.
“Though I wish my credit union had adapted to remote check cashing services sooner, for the most part the technological advances of my credit union have been satisfactory. I am more than happy with the online banking system.”
Better publicity could help showcase credit unions’ community service
“I am truly happy with my credit union. From my local branch services, to online banking, to mobile banking, I have been extremely happy with my choice to go with Summit Credit Union. I think that one thing that may make people’s experiences even better would be to better publicize exactly why credit unions are so important and how joining one is truly a personal choice that will benefit the community. Credit unions really are fantastic outlets for building community on a local and grand scale.”
Full disclosure: Hannah Priscilla Craig was the winner of the 2013 Summit Credit Union Mary Siedlecki Honorarium Scholarship.
Group of students arms up in classroom image courtesy of Shutterstock.