9 Statistical Challenges for Credit Unions
9 stats that will truly scare credit unions into improving their processes, marketing strategies, and strengthening relationship management.
By Sarah Snell Cooke, Cooke Consulting Solutions
Statistics can sometimes seem a nightmare for Credit Unions, but they don't always have to be
Some of the statistics outlined below should truly scare credit unions into making it easier for consumers to join their institutions, improving their marketing strategies, enhancing and streamlining onboarding, and working to improve member retention. The percent of credit union members in the peak borrowing age range has dwindled significantly. Meanwhile, millennials seem to have poor or no credit history for the most part. And if they’re aren’t getting a good experience at your credit union, they know where they can because the vast majority of credit union members also have a relationship with a bank.
This all presents several statistical challenges for credit unions, and some numbers to make you go hmmm...
- In 2014 (The Credit Union National Association's (CUNA) last study found), 35% of credit union members were peak borrowers, which was down from 51% in 1989 but up a few points from 2012.
- Just 7% of credit union members are ages 18-24 versus 18% of the total U.S. population, CUNA’s study found.
- The average age of a credit union member is 47; the average age of all Americans is 37.8 years old, according to CUinsight.com.
- 4 of 10 credit union members have college degrees, compared with 24% of nonmembers, CUNA reported.
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- 54% of members work full time versus 39% of nonmembers, CUNA’s report read.
- CUNA’s study found 76% of members are homeowners, compared with 52% of nonmembers.
- 86% of members also are bank customers; 65% of nonmembers use banks, according to CUNA.
- Credit union members have used their services an average of 16.2 years, according to CUNA.
- CUinsight.com posted that 1 in 6 millennials have saved $100,000, yet fewer than half of millennials have good enough credit to borrow. Lack of credit history is a problem for one-third of millennials, while those that are scorable most likely (two-thirds of them) have a nonprime credit score.
So what can credit unions do about these statistics to carve a path to a brighter future? Strategically focus with intentionality on growing members in the prime borrowing age range and younger to ensure long-term viability and relevance. Ensure your credit union is actively pursuing a diverse membership, not just highly educated, higher income earners. Adding members in underserved areas and with lower credit scores not only can help them build wealth and gain access to life-changing services, but this strategy can also help grow net interest margins through risk-based pricing on loans and fulfill credit unions' mission.