Posts Tagged young adult

>Indirect Lending & Young Adults

Posted by on Monday, 20 October, 2008

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I just finished preparing a presentation for the upcoming Lending Council Annual Meeting (insert shameless plug here.) As I was doing my research for the presentation, I ran across the article, Building Members from Indirect Borrowers in the Idaho Credit Union League’s August 2007 newsletter that peaked my interest.

The article covers a portion of CUNA Mutual’s Discovery Conference in 2007, where Bill Jolicoeur, vp and executive product leader at CUNA Mutual, discussed the opportunities indirect lending presents to credit unions since roughly 40% of existing loans in 2007 were made to indirect borrowers.

It’s tricky, of course. As the article points out, these members don’t switch over to other services easily… either because they are wed to their existing financial institutions and/or they don’t know that your credit union can do more for them.

But Jolicoeur suggests that the opportunity really lies in what he calls, “data mining,” according to the article. Data mining is essentially taking a look at the indirect borrower’s financial information and targeting messages for products and services that meet their needs, like loan consolidation. Here’s Jolicoeur’s point…

“Data mining allows you to look at what they have outstanding,” said Jolicoeur. “You have to be able to show them there’s a really good shot at helping them financially.”

I’d like to take this a step further. I think indirect borrowing offers an incredible opportunity for credit unions who want to better serve 18-to-30s.

When it comes to attracting young adults, making the most of every opportunity is just as important as relevant ad campaigns, messaging, and Web sites. In this case, the opportunities are presented through indirect borrowing & Jolicoeur’s concept of data mining.

Many of these indirect borrowers are entering their prime borrowing years, and the credit union has an opportunity to examine their info to determine where the credit union can help. Once that’s established, it’s a matter of developing your relationship with these new-found young adult members and proving to them that you have what it takes to meet their needs. Follow up with a phone call, relevant messaging, maybe even point them to your Web site if it has the right information presented to meet their needs and answer basic questions.

No, it’s not simple. No, it’s not the “silver bullet” most folks are looking for. It is, however, another tool in the credit union toolbox for better serving young adults.

Thanks to copyblogger for the cool pic


>Illinois CUs share piece of student loan program pie

Posted by on Tuesday, 23 September, 2008

>Big news from the Land of Lincoln… CUNA News Now reports two Illinois state agencies and eight Illinois credit unions will work together in a new state program to provide financial aid to as many as 20,000 college students each year.

An article today confirmed that the Illinois Student Assistance Commission approved the arrangement which was announced earlier in September.

Two points I’d like to make…

  1. It’s wonderful to see that kind of collaboration. In fact, the News Now piece mentions that the Illinois Student Assistance Commission had approached six foreign banks to invest in student loans. However, due to the subprime lending crisis, lenders have had to pull out of the student loan arena, says the News Now article.
  2. Student loans in particular, and catering to the needs/preferences of college students in general, are only the tip of the iceberg when it comes to truly serving the needs of the demographic and attracting more young adults as credit union members. Not all Gen Y’ers, Millenials, Echo Boomers (or whatever you want to call us) are in college. Many of my fellow young adults didn’t go to college or to a trade school and will be facing a tough road if the economy continues to sour. The needs between a 21-year-old in their Junior year at college, and a 21-year-old mechanic are vastly different… even if they both have an iPhone.

On a slightly related note, our credit union friends down under at BDCU in Australia seem to be doing a great job letting members know they’ve avoided direct exposure to the subprime meltdown. Check out this news piece published in their local paper, the Southern Highland News. Know of any CUs doing the same? Post a comment with a link to the article.


>Do Credit Union "Values" Resonate with Young Adults?

Posted by on Thursday, 24 April, 2008

>I ran across something tucked away in my files entitled “Top Ten List of Credit Union Values.” You can find them at the YES CU Community if you’d like to check them out.

Finding this got me thinking and I want to post about this today because an overwhelming number of 18-to-30s don’t know the differences between credit unions and other financial institutions. Almost 50% of young adults are either “not very familiar” or “not at all familiar” with credit unions according to CUNA’s 06-07 National Member Survey and it’s 06-07 Survey of Potential Members.

What’s puzzling is that these surveys also found that out of all the age groups studied, young adults are “most likely to say they’re eligible to join a credit union.” That tells me that folks my age only understand that credit unions exist… but beyond a better interest rate on savings there isn’t a compelling reason to become a member.

Yes, it’s tough for credit unions to compete with larger institutions on products and services. Perhaps that bank down the street is more convenient or has more ATM’s. So where do credit unions have a competitive advantage? In credit union philosophy and values.

Why? Because young adults, and people in general, like to know they’re supporting a good thing simply by going about their everyday lives. Being a member of a not-for-profit institution that helps out in the community and gives to their members instead of fat-cat board members is right up our alley. The following, from an article on USAToday.com, helps illustrate this point

69% (of 13-25 year-olds) consider a company’s social and environmental commitment when deciding where to shop, and 83% will trust a company more if it is socially/environmentally responsible. The online study — by two Boston-based companies, Cone Inc. and AMP Insights — suggests these millennials are “the most socially conscious consumers to date.

But how often do credit unions communicate “values and philosophy” and/or do so in a meaningful way that resonates with my demographic? Not often enough, or at least not in a way that we’re able to pick up as demonstrated by CUNA’s Survey of Potential Members. The best I’ve seen is from this YouTube video from the Young And Free campaign in Alberta, Canada.

After you watch the video… check out some of the comments left below the video. They’ll illustrate my point even further. In fact, here’s one of the comments…

…Except for the fact that in reality there ain’t one iota of difference (in North America anyway) between the two!

They’re both indifferent, self-interested financial service rackets.

Communicating how and why credit unions are different is an important aspect of gaining younger members… it speaks to the heart of why credit unions exist and offers another reason for someone to go to you instead of the bank down the street.

The more credit unions can communicate the philosophical differences that set them apart from other financial institutions, the more young adults will want to become members. As I mention in a previous post, it’s called Dominating with Difference.


>Mobile Banking Ready to Takeoff, Gen Y On Board?

Posted by on Wednesday, 16 April, 2008

>A blurb in the latest CU360 Executive Newsletter caught my eye the other day. It states that cell phone banking is on the verge of catching on. The article attributes this to information from BAI’s Banking Strategies that says improved technology and a surge in cell phone ownership have created fertile soil for mobile banking to grow.

Of course, to really make mobile banking (or “credit unioning”) takeoff is to make it more than just a way to check your balance. The key, according to the CU360 article, is to make payment transactions part of the package. Adding this functionality makes it incredibly convenient for the user to buy something or pay any bill on the fly with a few taps on their keypad… just as people use their desktop to pay their utility bill or purchase that toaster oven/MP3 player combo they’ve always wanted.


This is an important point, especially for us Gen Y folks. According to Forrester Research, we Gen Y’ers are mobile phone junkies AND have no qualms with using new technologies (see the chart directly above and below for Forrester’s findings to back this up.)

It’s not a huge leap of faith to see that if the right features are added to mobile banking, we’ll be the ones to jump on the bandwagon first and use these features the most.

Case in point… During the 2007 YES Summit we heard about a successful mobile banking initiative from Paul Sidhu, Manager of Electronic Commerce over at The Golden 1 Credit Union located in sunny California.

The Golden 1 has two services billed under the online banking moniker… a text messaging service and a wireless web service. And members who use online banking are able to use their cell to access accounts, transfer funds, and pay bills (all with a password and username, of course.)

Paul explained that almost half of all members using the text messaging service and almost a third of all members using the wireless web service are under the age of 30. Paul was also kind enough to share that 6% of all The Golden 1′s members are using one of these mobile banking programs.

So, can mobile banking work for credit unions? Yes. Is mobile banking relevant for your members under 30 as well as other members? Yes, and even more so as technology develops. Will members use it? Yes, especially Gen Y.

If that’s the case, then why aren’t more credit unions pursuing and/or offering mobile banking?


>Take your VITA-mins

Posted by on Wednesday, 13 February, 2008

>Tax season is a confusing time. It’s especially bewildering for those of us “youngins” filing for only the first, second, or even third time in our lives. If we’ve never filed, or are filing for the first time as newlyweds, chances are we don’t have a clue.

In that case, we are likely to spend money on some tax prep software or find a family member or a friend to do it for us. And even if we’ve filed taxes in years past, it’s likely that we’ve relied on the above and/or are now in a financial situation where filing a simple 1040-EZ is no longer an option.

Credit unions have an awesome opportunity here to help young adults (and other populations) in need of tax preparation advice and become an advocate for their needs thanks to the IRS’ Volunteer Income Tax Assistance (VITA) program. Essentially VITA sites offer free tax help from trained volunteers for low-to-moderate income individuals and families. You can find more information on the VITA program here at the IRS website.

In fact, it’s such a great opportunity that the NCUA is getting in on the act. They’ve recently teamed up with the IRS to produce this webcast on the issue and continue to offer resources that help credit unions establish VITA sites. Check out what NCUA offers to help credit unions here.

Setting up VITA sites are a great way to serve the community, promote your credit union, and demonstrate you’re an advocate for young adults (as well as other populations in need). By doing so your credit union is perceived as an financial institution that lends more than just dollars by lending a helping hand during a time of need.

You’re also building trust and exemplifying a major tenet of credit union philosophy… people helping people.


>Student reps part of the CU solution

Posted by on Thursday, 7 February, 2008

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Here’s an idea that folks outside the Credit Union Movement have used with great success… hire student reps to act as roving young adult delegates who advocate on your behalf.

Some call these folks street teams, brand ambassadors, or promotional teams. I call them a great way to communicate to this demographic that your credit union is there to help them out. This approach also adds a personal touch, offers someone young adults can identify with, and personifies your marketing efforts.

Here, take a look at an article describing what other companies are doing at UCLA. There’s also a discussion in the YES CU Community Forum about hiring college students to teach personal finance to their peers.

These efforts can be inexpensive and if given the right motivation and support, they’ll come up with some fun ways to bring a young adult touch to your credit union. Keep in mind this approach is best served with an equal dosage of services fit for the demographic. Otherwise it’s an attempt that will fall short and young adults see right through it. Espeically when they unable to find services that meet their needs.


>If a Government Agency Blogs Why Can’t Your CU?

Posted by on Thursday, 31 January, 2008

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The next time a nay-sayer mentions that blogs or social networks aren’t safe for credit unions thanks to regulators, negative publicity, or that they’re not worth the effort you can point them directly to a new blog unveiled by the Transportation Security Administration… wait… the TSA?

Yep! The TSA has unveiled a new blog to better communicate why they do what they do. Check out the following article to learn more about the TSA’s efforts and don’t forget to take a look at the blog itself.

Why does this matter? This shows that if a government agency is willing to put themselves out on a limb a little, then more credit unions can do the same… not simply with blogs but with other “risky” propositions such as targeting young adults with new and different products that better serve their needs.

>How Can CUs Use Web Widgets?

Posted by on Tuesday, 29 January, 2008

>We’ve touched on Web widgets before, thanks to Christopher’s Blogging 102 post. But I’d like to take the coversation on widgets a bit further. You see, widgets can be used for more than just blogs.

What are widgets, exactly? Basically they are bits of code embedded in html to customize a Web page. A user selects them from a third party and installs the ones they like. RSS feeds are an example of a widget. Countdown timers and quiz results on individual social network profiles are also widgets.

To learn more, check out the following post on the Project New Age blog. There you’ll find a good description and several useful examples. And if that doesn’t do it for ya, there’s always the following wikipedia entry. Want to know how to make a widget? Here’s a really cool resource (albeit very technical) from the World Wide Web Consortium

Okay, so why could this be important? Well, widgets are popular with a lot of Web users, but especially popular on social networking communities such as Facebook, which are heavily populated by the 18-t0-30 crowd. Come up with a widget that someone likes, and they’ll spread it around to their friends, and their friends friends like… well, like a virus. It’s good ole’ fashioned viral or word-of-mouth marketing on a new stage… if you do it right.

It all sounds great, but a few words of caution…
  1. Most widgets I’ve seen aren’t commercial, or meant to advertise a service or a product. They are simply to make a user’s experience unique, fun and they become another way for users to interact with eachother. For example, you find out that your friend Sarah is also a fan of the Muppets, or that you have 30 friends who have scored higher than you on the sports trivia challenge. So, you’ll have to be creative in figuring out a way to develop a widget that “sells without selling” if you want to use a widget to bring traffic to your credit union

    With that said, there are an ever increasing number of “widgets with a purpose” (as I like to call them) being added on social networks and Web sites alike.

    In fact KeyPoint Federal Credit Union is a prime example of a credit union using widgets in this fashion. They’ve developed a Facebook widget that allows users who are on Facebook to access their KeyPoint account online. Of course, just to confuse the matter, Facebook calls widgets “apps” (as in applet). Essentially, they’re the same thing… bits of code used to customize a Web page, or individual user profiles in Facebook’s case.

  2. This isn’t the answer to all of your young adult worries at your credit union. This, just like a MySpace profile or any other initiative is simply a step in the right direction. There are many other steps needed to reach your destination.

But don’t let that stop you! Get out there and come up with some great widgets. Get some input from young adults at your credit union and make it happen.


>Is traditional lending headed out the door?

Posted by on Wednesday, 17 October, 2007

>Hey folks, I just ran across a really interesting article that you need to check out. Not only does it give a pretty good overview of the current peer-to-peer landscape, the author highlights an individual who uses peer-to-peer lending as a means to escape the for-profit payday lending trap.

The article goes on to talk about how peer-to-peer groups such as Lending Club are using social networking sites to conduct business. Credit unions also get a shout out, as Aite research director Christine Barry points out, “Peer-to-peer lending reminds (her) very much of the credit union model… You’re usually lending to people that belong to the same kind of affinity group. There’s a certain degree of trust.”

Call me a credit union dork, but I love reading about this kind of stuff. I get all excited thinking of all the possibilities for credit unions with peer-to-peer lending, social networks, and specifically the 18-to-30 demographic.


>Young Adults in Credit Unions Have Something to Say

Posted by on Wednesday, 26 September, 2007

>The folks over at Filene are launching a new initiative called “30 Under 30.” It will bring together 30 credit union professionals under the age of 30 to develop solutions that help credit unions better serve the 18-to-24-year-old segment of young adults. If you’re interested in becoming involved, and/or want more details, check out their 30 Under 30 page.

Okay, so let me share my personal thoughts…

This is an awesome idea and long overdue. Why? Have you ever found yourself chatting with two other people, who are talking about you but not involving you in the conversation? It’s frustrating, isn’t it? You try to speak up and express your thoughts, but the other two don’t really listen and continue on.

Well, as a young adult dedicated to the Movement, I can tell you many of us feel as though we’re in the middle of that same situation. We’re the “C” in an “A” and “B” conversation. What’s best for our generation and credit unions is being discussed, but doesn’t actually involve those of us already in credit unions.

In the off chance we ARE asked to offer our thoughts, it rarely involves anything beyond, “hey what’s your opinion of this marketing campaign… is it ‘hip’ with the kids these days?”

Don’t get me wrong, getting young adults involved in those types of discussions is a good thing. However, we have more to offer the discussion on how credit unions can better attract and serve our generation then if an advertisement looks “cool”.

Right now, only a handful of us young adults are able to speak up about this issue and have someone listen. The 30 Under 30 initiative is a way for more young adults to have their voices heard. That’s important, because credit unions can’t base the future of credit unions on the opinions of other generations and 5 or so young adults… myself included.

If we, as a Movement, are going to successfully address the ageing of credit unions, we need the collective input of young adults within credit unions. And that’s where programs like the YES Summit and Filene’s 30 Under 30 initiative step in.