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“Banking on Youth”

Tue, Jan 14, 2014

Columbia, Maryland

Hard to believe but I am now 51 years old.  It seems like it was just yesterday when my Mother and Father opened my first savings account for me.  At first I was so excited to have the account, and the passbook that any money that was given to me would quickly lead to my begging my Mom to take me to the bank so that I could make a deposit.  The novelty of feeling so grown up wore off quickly and soon I was spending my money as fast as it was coming in.  My want for Matchbox cars exceeded my income stream.  It was at that point my Dad made a deal with me.  For every dollar I saved over the next 12 months he would give me 25 cents and also double whatever interest I accrued.  He followed up by taking me into the branch and explaining what he wanted to do with me with the branch manager.  The branch manager was an older lady who was gushing over what a great deal that was for me.  Additionally, she asked me what my favorite candy was.  Of course back then it was bubble gum. 

Bazooka Joe bubble gum to be precise.   The branch manager told me that every time I came into the branch to make a deposit she would give me two pieces.  Those two interventions changed my behavior from my being a spender to a saver.  I also, think that my career choices were influence by that pivotal time too!  That bank ended up becoming my bank of choice when I left for college and as a young professional.  But like many banks they were bought so many times and the people changed so often that the reason I chose them was no longer evident and I moved my relationship to MCT FCU (of course I was working for them too!).  You may be saying to yourself “That’s very nice but what’s the point?”  Well here’s the deal.  According to a December worldwide survey by Gallup only 83% of all young adults in high income geographies and only 40% of young adults in low income areas have bank accounts.  The survey cited the primary reason cited for the 700 million worldwide unbanked younger adults not having an account “was a lack of money (29 percent) and the high cost of bank accounts (27 percent).” 

Additionally Gallup also noted “Since 2012, there has been a general decline in the proportion of students learning about business or money at school. In 2013, more than half (55.3%) of students said their school teaches them about money and banking, down 10 percentage points from 2012.”


So as credit unions what can we do to help capture young people and help to create loyalty that will payoff once they are affluent and or borrowing adults?    This is a quick list of some strategies that may be helpful in growing your fair share of the market and winning young adults to the credit union before they choose a bank.

  • Be intentional about growing your “Young Savers Accounts”
    • Make asking about children in the household an expected behavior in all new account opening interactions
    • Market to your members, encouraging them to get their children into the credit union
    • Provide educational materials for young adults at account opening and at least annually thereafter.  If possible segment into age groups such as under 12, 12 to 15, 16 -21.
  • Target these members for checking accounts when they become seniors in high school.  This allows them to learn about managing their money while still at home.  Consider offering low balance credit cards, share secured credit cards, or pre-paid cards as a way to put their toe in the water using “credit”. 
  • Promote the technology you have available – younger demographics are much more comfortable banking using mobile and internet
  • Consider using iTunes gift cards or Amazon gift cards as a way to promote young adults referring friends or as account opening gifts for the children of members.  No toasters for this group! 


Finally, ask yourself, “How much time, how much of our strategic plan is dedicated towards this segment?”  If you don’t feel good about the answer, now might be the time to begin thinking about what you can do this year, and what your plan should look like next year.