By: April Lewis-Parks, Director of Education and Corporate Communications, KOFE.
Millennials (generally defined as age 18 to 34) are quickly becoming the largest consumer segment in the U.S. They outnumber baby boomers by 11 people. However, despite their numbers, Millennials struggle to achieve financial independence. They are among the least likely to engage with traditional financial products and services. So, what can credit unions do to bring this generation into the financial fold?
The financial experts at KOFE: Knowledge of Financial Education captured this dilemma in a new infographic, “Millennial Money: Banking and Credit Fear.” As you can see, it details the challenges facing credit unions that are eager to engage America’s largest consumer segment.
The biggest roadblock to millennial product engagement is the inherent mistrust of financial institutions. Many believe big banks played the largest role in causing the Great Recession, and they don’t have the knowledge to differentiate those organizations from smarter alternatives, like credit unions. As a result, they lack an understanding of how traditional financial products improve their ability to manage money effectively.
Nowhere is this more apparent than with millennials use of basic checking accounts. Nearly one in four millennials say they will never open a bank account. However, more than half that number say it’s because they don’t have enough money to keep the account open. That points to a lack of knowledge about accounts that offer no minimum balance requirement and protections to avoid overdrafts.
Education is often the key to fostering more engagement. By increasing awareness of credit unions’ member-centric culture and educating consumers on the benefits offered by traditional financial products, credit unions can overcome millennials’ reticence.
This is the driving principle that led the certified credit counselors of Consolidated Credit to create KOFE, developing an out-the-box platform that can be used by partners, such as credit unions, to educate unbanked and underbanked individuals, particularly millennials. Using a third-party platform allows credit unions to engage in effective outreach, without diverting revenue into developing in-house education systems.
For an in-depth conversation about how to use financial education to capture your members’ attention watch KOFE’s webinar on demand now.
KOFE (Knowledge of Financial Education) is the NAFCU Services Preferred Partner for Financial Literacy. More educational resources and contact information are available at www.nafcu.org/KOFE.