Credit unions turn to digital outreach as membership growth slows

With in-person interactions on college campuses limited due to the coronavirus, some credit unions are searching for new ways to bring potential new, young members into the fold.

Membership growth has slowed in recent years and the industry has not been able to move the average member age below 47 for decades. As more and more consumers age out of their prime borrowing years, credit unions will need to replenish those members with a younger cohort – and then find ways to keep them in the fold.

Online outreach and digital banking capabilities may not be enough. A 2020 study from Access Softek found that credit union membership is not being passed from one generation to the next, and digital banking isn’t enough to keep many members’ business.

Among those trying a new strategy is Pennsylvania State Employees Credit Union, which is now using social media as its primary “in” with students. PSECU is primarily a digital credit union and while in the past it operated ATMs and financial-education centers on more than 20 campuses across the state that doubled as recruitment tools for student members, those facilities were not set up for conducting financial transactions.

COVID-19 forced the $7.5 billion-asset credit union to shift its strategy. PSECU recently began piloting a campus ambassador initiative in conjunction with SocialLadder, a platform that helps brands create their own ambassador programs. The credit union hired approximately 30 ambassadors as independent contractors to network and otherwise use social media to pump up PSECU to their friends, peers and followers.

Some banks have adopted a similar strategy in recent months.

Chris Rhine, the credit union’s university development manager, said the move is a natural progression from PSECU’s old philosophy of having student interns work at the credit union and then take those positive experiences back to campus to spread the word.

“This is a 21st century version of a student representative,” he said. “It gives us a lot more flexibility, especially in this environment where it’s hard to reach people.”

SocialLadder co-founder Alana Bly said many brands have struggled to reach college students since the pandemic hit, particularly since they can no longer get in front of students as easily through things like sponsoring on-campus activities.

A virtual-events strategy is helping boost membership at Massachusetts Institute of Technology Federal Credit Union in Lexington, Mass., which had to close down its primary branch that serves students after the pandemic necessitated limiting access to the building where it is housed.

“We jumped right in with virtual info booths and educational sessions,” said Madeline Anderson-Balmer, marketing manager for the $693 million-asset institution. “While at first glance it might seem that college and university lockdowns would be a problem, we’ve found a lot of new ways to connect and we’ve seen a higher level of interest in learning about the credit union. It’s been a good experience with a bad situation.”

Since COVID began, she said, the credit union has ramped up email communications, started a newsletter providing multiple online resources for students and families, and launched a new website with multiple educational resources. Advertising dollars have also been shifted to more digital platforms and credit union leadership expects to roll out a video banking service later this year.

“We’ve changed our focus to becoming a digital credit union. Yes, we have branches, but our membership can do anything they need to with us virtually,” she said.

Because Evergreen Credit Union in Portland, Maine, has a community charter, it’s relatively easy for college students to join, said CEO Jason Lindstrom. The $402 million-asset institution had a robust social media profile before COVID hit, he added, so there wasn’t much need to change its strategy, which includes things like online raffles and fundraisers, and monthly contests on its Facebook page to win one month’s auto loan payment.

“We’ve been consistent with [social media] and have had great engagement,” he said.

However, experts said, successful online engagement is often the exception rather than the rule. The pandemic has highlighted larger issues credit unions have with delivering access across various channels, said Anne Legg, founder of THRIVE, a data education and consulting firm.

Increasing the use of online engagement channels to grow market share among younger clients remains a challenge for many institutions in part because of consumers’ high expectations based on interactions with platforms such as Uber, Amazon and Netflix.

“This is one area that some credit unions really struggle with,” said Legg. Some of the factors that have contributed to that, she said, include the fact that credit unions have historically handled the bulk of their transaction activity in person. Online channels and drive-thru windows have helped but aren’t prioritized as outreach tools to the same extent that branches are, she said. COVID forced many in the industry to revamp those strategies in short order.

“This hard pivot probably felt a lot like taking a luxury liner through a race course with sharp turns,” she said. “Not pretty, but doable. But it appears one of the great opportunities from COVID has been the focus on credit unions to increase the self-service offerings.”

If credit unions want to improve their track record with young consumers, said SocialLadder’s Bly, they’ll need to focus on building trust while also remembering what moves the needle for younger generations.

“We’re in a scrolling culture,” she said. “Video testimonials and reviews are gold, so try to encourage members to share when possible.”

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