To lure Gen Z, credit unions power up with online gaming

Young members can bring new growth opportunities for credit unions, but recruiting those consumers remains a challenge for many institutions.

Some credit unions have turned to creating online games as a way to engage and attract a younger demographic. Analysts said this strategy can work since younger consumers are more digitally focused, and credit unions can use analytics to be very targeted in these marketing campaigns.

“A billboard might catch your attention, but ultimately, this demographic lives and dies on their phones,” said Douglas Strickler, founder of HOT Inc., a brand strategy and communications firm. “You gotta catch them through the phone and keep it digital.”

Overall credit union members tend to be older. Only about one-fourth of credit union members are millennials, while half of them are older than 50, according to data from FIS. This can limit lending opportunities for institutions since young people may require more credit to buy homes and other big-ticket items, and will seek services throughout their financial life cycle.

Many credit unions fail to attract a younger demographic because they don’t fully understand this age group and therefore don’t cater to their needs, said Bo McDonald, president of Your Marketing Co., a brand and strategic planning firm.

“You got a bunch of 40- or 50-year-olds sitting in a room writing a marketing strategy, then [thinking], ‘Gee, this 25-year-old would like this,’ instead of actually bringing a few 25-year-olds in the room and saying, ‘What can we do to reach people like you?’” McDonald said.

To win digital-first consumers, credit unions need to market digitally, Strickler said. About 85% of millennials log into mobile banking every week, compared with 72% of Gen Xers and 38% of baby boomers, according to an Aite Group survey conducted in the first quarter.

Creating a social media presence with videos is an inexpensive solution if a credit union does not have much bandwidth for digital marketing, Strickler said. But for those who have more resources, creating digital games can be an effective way to target young members.

Texas Trust Credit Union in Arlington released an interactive game, called “Game of Loans,” on Facebook and Instagram in May 2019 as a way to win new members between the ages of 24 and 34.

Inspired by the HBO series “Game of Thrones,” the game featured red dragons blowing fireballs over a backdrop of ominous black clouds, steep mountains and a rugged coastline.

If a player eliminated 10 dragons within 30 seconds, they won a prize, such as no payments for the next 90 days on a personal or auto loan of at least $5,000 and cash when taking out a new loan or opening a new credit card.

Almost 9,000 consumers played the game in May 2019. The credit union said the game helped it originate 25% more loans through its mobile and digital banking services that month compared with a year earlier.

The cost for the game was lower than other marketing campaigns, such as direct mail and digital ads, according to Sidney Henderson, vice president of marketing at Texas Trust CU.

“And it allowed us to position ourselves as technically savvy, fun and relevant,” Henderson said.

Using Facebook analytics, the game targeted consumers within a certain age range who were not already members. More traditional email ad campaigns can’t be that exact due to the Controlling the Assault of Non-Solicited Pornography And Marketing Act of 2003, or the CAN-SPAM Act, a law that protects consumers from unsolicited commercial emails.

Being that targeted in its reach contributed to the game’s success, Henderson said.

Still, credit unions need to be wary of data privacy concerns when marketing with games, multiple experts said.

Most credit unions do not have the budget or expertise to create a game or an application from scratch, McDonald said. Therefore, they have to seek third-party service providers for technical support. Sometimes, credit unions may have to share member information or transactional data with a third party, meaning there could be concerns about data leaks and misuse.

During the heyday of the augmented-reality game Pokemon Go in 2016, some banks tried luring players into their branches by placing game items there. One of the credit unions that McDonald collaborated with jumped onto the Pokemon Go craze as well.

“We saw some credit unions dip their toe in the water until their IT person slapped their hands, saying, ‘We can’t do this, it’s unsafe,’” McDonald said.

Credit unions should complete due diligence on any third-party providers to ensure they are legitimate and have the proper training, McDonald said.

Meanwhile, credit unions that do attempt gamifcation strategies should make games that align with their institution's personality, said Peter Stackpole, president of Stackpole, a marketing firm based in Newburyport, Mass.

“I think credit unions have to have a strategy and define what they’re trying to accomplish, and then evaluate whether gamification fits into that strategy,” Stackpole said.

Credit unions should be careful not to assume that younger customers will only be drawn in by digital campaigns. Diving into local communities and sponsoring events such as music festivals, can also attract a younger demographic, Stackpole said.

For example, Vermont Federal Credit Union, a client of Stackpole, partnered with Ben & Jerry’s last summer, serving free ice cream with cups branded with the institution's name.

“Credit unions have to be warm. They have to be part of the community,” Stackpole said. “Otherwise, all the stuff is just shiny objects. [Online games] are just tactics.”