Products developed for the Young & Free program include “First Gear” free checking and savings accounts with no minimum balance requirements or fees. The checking account features “Oops Protection” to waive two overdraft fees annually.
Gen Y members enrolled in Young & Free use an online banking site that shares the standard Michigan First Web functionality but replaces its corporate design with Gen Y graphics and opportunities to interact.
Other elements with high appeal to Gen Y:
- A 1% interest-rate reduction on auto loans when Young & Free members finance a vehicle purchase with Michigan First;
- A custom debit card unique to First Gear. The ability to upload images to the card will be available in early 2012;
- “Student Choice” private student lending that offers a line of credit with low interest rates, no origination fees, and flexible repayment terms; and
- Robust online and mobile banking. In the works are remote deposit capture within online banking and mobile deposit capture.
Michigan First’s efforts to engage Gen Y have increased membership among the 18- to 25-year-old age group from 6% of total members in 2002 (2,887 of 45,836 members) to 11% in September 2011 (8,886 of 79,842 members).
Momentum generated by Young & Free Michigan is reflected by a 28% increase in new Gen Y members, from 1,708 who joined between January and September of 2010 to 2,194 who joined during that same period in 2011.
Average deposit balances increased nearly 20% annually among Gen Y members, with First Gear accountholders using 26% more services than other Gen Y members. Loan penetration among Gen Y members also increased, from 14.3% of members holding loans in September 2010 to 15.1% holding loans in August 2011.
A Gen Y Convert
Serving as Michigan First Credit Union’s Young & Free “spokester” for Gen Y members convinced Janelle O’Hara that credit unions have something special to offer.
O’Hara competed with other Gen Y applicants for the one-year term representing Young & Free Michigan by producing videos and blog posts, and making public appearances. She earns a $30,000 annual salary and received an Apple laptop, a smartphone with a one-year contract, and a digital video camera.
A native of Eastpointe, Mich., O’Hara knew little about credit unions before she won the Young & Free “spokester” contest in April 2011. O’Hara is a December 2010 graduate of Lawrence Technological University with a degree in media communications.
“Right off the bat, learning about credit unions and the fact they’re member-owned and not-for-profit opened my eyes,” O’Hara says.
Credit unions can attract Gen Y by offering education in a way that reflects young members’ slightly different outlook on life, O’Hara says. Allowing young members to make transactions using their cell phones is also valuable.
“Generation Y doesn’t have to be this big mystery or problem or obstacle,” O’Hara says. “Just listening to their concerns and offering education in a low-key environment can help jump-start a relationship with the 18- to 25-year-old crowd.”
O’Hara researched topics such as credit, loans, and budgeting so she could deliver reliable information about Michigan First. Along the way, she learned that credit unions offer lower rates and fees than banks while delivering friendly, personal service.
“I trust credit unions more now than I ever thought I could trust a financial institution.”
Next: ‘Buck the Norm’