About 20% of U.S. Millennials aged 18-24 say they use credit unions as their primary financial institution attracted by low and transparent fee structures and better interest rates. Credit card rates are also significantly lower too.
For the second year in a row, the FICO survey showed the number one reason that consumers leave their primary financial institution is the perception of high fees. Of those consumers who have switched institutions, 49% listed high fees as the top reason. For Millennials, fees are still the number one reason for switching, followed by poor customer service or ATM/branch convenience issues.
FICO’s consumer finance trend survey reveals Millennials, aged 25-34, say they are two-to-three times more likely to close all accounts with their primary financial institution than other age groups, creating an opportunity for credit unions to win their business.
FICO’s survey revealed that there might be an opportunity for credit unions to win over 25-34 year olds, as the survey reveals these Millennials are two to three times more likely to close all their accounts with their primary financial institution in the next 12 months.
Looking at consumers of all ages, the survey reveal that 14% of respondents with accounts at major banks said they are likely to close all their accounts in the next 12 months, compared to just 4% with credit unions. Capturing some of these customers when they are looking to switch presents a chance for credit unions to increase their share and keep it.
According to the 2016 US Credit Union Profile report by the Credit Union National Association (CUNA), there are over 6,000 credit unions in the US. These credit unions, which hold over $1.3 trillion in assets, earned high marks in the survey on overall trustworthiness among consumers, especially around the perception of providing greater transparency on fees.