#3321: Union Credit Shares 3 Strategies for Credit Unions to Attract Younger Members in 2024...

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​Barry Kirby, Co-founder and Chief Revenue Officer of Union Credit, joined us on the show to share customer acquisition strategies for community financial institutions in 2024, as competing fintechs and a tightening economy calls for a new perspective from today's credit unions.

Here are three strategies Barry discussed for community financial institutions to ramp up acquisition of new relationships and position for growth:

1. Address the aging accountholder challenge. Millennials are the largest generational group in the United States, at just over 72 million people, and do most (80%) of their shopping online, often using embedded finance for purchasing. Forward thinking community institutions will invest in an embedded finance strategy to appeal to modern, young and digital-savvy consumers. This approach integrates competitive offers directly into younger consumers’ everyday shopping experiences, simplifying interactions and making it more convenient to engage with and join the institution. 
2. Shift focus from large to small deposit acquisition. With an aim to attract younger demographics, who generally have limited funds, focusing on short-term growth tactics like Certificate of Deposits (CDs), which target high-income individuals, is not a sustainable strategy. Instead, focus on a diverse customer base with modest deposits.  Millennials and Gen Z can be courted with smaller deposit opportunities that build financially healthy behavior and drive growth and long-term engagement. 
3. Consider lending as a strategic avenue for growth. Many community institutions prioritized deposits over lending in 2023 to counteract shrinking margins. In the background, fintechs and megabanks quietly constructed robust loan portfolios, addressing market needs and gaining a substantial customer base. It's crucial for community banks and credit unions to recognize that, as of 2022, the majority of their memberships originated from lending activities. Therefore, viewing lending not just as a short-term fix but as a long-term vision becomes paramount, offering an opportunity to make a lasting impact on communities. This shift in perspective may necessitate embracing innovative approaches beyond traditional methods like indirect lending, delving into more targeted strategies for attracting new prospects and infusing vitality into the institution.

Kirby explained, "Lending fintechs have set a new bar for consumers. Community financial institutions can no longer operate under a siloed thinking model that necessitates consumers to seek them only during times of need; instead, they need to proactively connect with them in those moments. Local lenders have a distinct advantage in terms of trust, service, and local impact. The next generation expects connectivity; they prefer shopping local and having trusted providers. Credit unions and banks that can break through the old ways to meet them where they are will forge lasting relationships within their communities."

Check it out and let us know your thoughts. And be sure to watch the entire episode below for all the details.