Banks, CUs Aim To Attract The Youngest Savers
In recent advertisements, banks and credit unions have attempted to woo younger customers and their money, but whether those efforts are working is difficult for bankers to know.
Some of that difficulty comes from the fact that banks and credit unions are treading new territory not just for financial institutions, but for society as a whole.
Southbridge Credit Union has a Facebook page and has 70 “friends” there. Paul Raffa, SCU’s business development chief, said its presence on the social networking site is part of an overall strategy to get younger customers to open accounts as its membership ages.
Raffa said SCU has had moderate success with its Facebook page.
“It could be a lot better,” he said. “… 70 to 100 friends is about average, so we’re average.”
SCU’s web site and many of its advertisements feature young people, and they focus on the fact that there isn’t much an SCU member has to step into a branch office to do.
“We offer the ability to do everything on the phone or online. Everything except closing an account, they can do online. Obviously, we want to make that harder,” Raffa said.
And that is a direct response to big banks like Bank of America, which began offering such services well before SCU and other, smaller banks and has been stealing customers from them as a result.
Facing Facts
Community banks may soon be headed for another kick in the pants, according to Matt Sosik, CEO of Hometown Bank in Oxford.
Accepting that technology and the fact that marketing that technology to a new generation of depositors is necessary for small banks to survive in a saturated market like Central Massachusetts has been “a bitter pill to swallow for community banks,” Sosik said.
“Technology is removing the customer from the face-to-face contact we need to make our business model successful,” he said. “Every bank needs to be registering that the game is changing rapidly and our number one strength, because banking is so homogenous, so similar, comes down to customer service.”
Savers Co-operative Bank in Southbridge has a healthy web presence and pushes its tech savvy on the 18-34 age group with laptop giveaways, and like SCU, the ability to do all one’s banking without setting foot in a branch office.
And it’s noticed a difference. Almost 20 percent of the bank’s customer base is between the ages of 18 and 34 and that percentage creeps up a couple of points each year, said Chris Martin, the bank’s head of retail marketing.
But there’s still a problem. In Central Massachusetts, there may not be enough potential customers for all the banks that call the region home.
Several banks, in addition to offering the latest technology to attract younger customers, are also finding their way into schools in the hopes that delivering lessons on saving and basic money management now will result in loyal depositors later.
Savers starts “real young,” Martin said, with seminars for children.
SCU has a branch Southbridge High School and sees teens with an interest in saving.
“They’re 17, 18 and they’ve seen a recession,” Raffa said.
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