A new survey by The Filene Research Institute tracked 862 people who moved to a different U.S. city between 2011 and 2014 and found that 69 percent of them did not change their financial institution.
Of the survey respondents, 80 percent were female, and 45 percent were between the ages of 18 and 29. The young demographic highlighted its preference for staying with their current credit union through the assistance of online tools, rather than changing after their move because local branches were no longer convenient.
Technology key to keeping customers
According to the U.S. Census Bureau, the average American moves once every five years. In 2012 and 2013, the Bureau reported that 12 percent of the population - or 36 million people - relocated. Many moved within the same county or state, but others went to a completely different part of the country. No matter where they moved or what their reason for relocating was, the majority of survey participants opted to stay with their credit union.
The Credit Union Times spoke with Manpreet Nat, an associate at Filene, who gave suggestions on how credit unions entice members to stay loyal even after they move away. The survey found that new technology, as opposed to more traditional in-person meetings, was a main reason members stayed.
"In order to ensure members feel engaged in any location outside of the branch, your credit union should invest in robust online do-it-yourself tools and applications," Nat said. "The priority should be to broaden access points and service channels to afford members multiple opportunities to stay connected. Moving doesn't have to mean the end of your relationship with your members."
"The young demographic highlighted their preference for staying."
Local convenience still matters
Many credit unions are well aware of the importance of technology and keeping in touch with members in non-traditional ways. In March, U.S. News and World Report stated that eight of the 10 top-reviewed banking apps came from credit unions. These apps allow members to transfer money and keep in touch with their credit unions, even if they are not close to a physical branch.
For credit union managers, all these people moving can be a tremendous gain or loss to their member base. That is why it is so important to retain the people who move away. The Filene survey asked those who did opt to leave their credit union why they changed financial institutions, and the leading answer was "I wanted to be closer to a branch," which received 29 percent of the vote. Tied in second place, with 17 percent each, were "Service was better" and "My previous financial institution did not meet my needs."
The survey summarizes that in today's financial environment, a member moving doesn't automatically lead to them changing credit unions. More people are opting to stay loyal. However, that is dependent on the credit union having modern digital tools that give the member access to financial data even when they are away. If a community-based credit union doesn't have a strong online banking service, it risks losing transplanted members.
Credit union executives can make a real difference for their organization by making sure their website and mobile application are easy to use and efficient. A FICO study in 2014 stated 70 percent of millennials ages 25-34 use mobile banking apps. Doing well in that field can lead to more members, as the study found that 76 percent of mobile app users are likely to recommend their financial institution, compared to only 67 percent of nonusers.
Members' desire to be close to a branch can be negated if a credit union has current and easy-to-use online tools. As long as members can still access their money and feel safe about their income, credit unions should be able to entice people to stay even if they move to a different city.