As the average age of state residents continues to rise, it’s becoming increasingly important for Connecticut’s banks and credit unions to attract younger depositors.
But marketing to that demographic isn’t always easy, as finance isn’t usually a priority of teenagers and young adults. But in a growing trend around the state, local banks and credit unions are finding ways to get close to teens by opening branches within in their schools.
Middletown-based Seasons Federal Credit Union, for example, opened a new branch in Middletown High School last week. The branch, named the Dragon’s Vault after the school’s mascot, will be run by Seasons’ employees who also attend thehigh school.
Dragon’s Vault, which is located in the school’s cafeteria, is set up like any other Seasons branch and will be open to students and faculty during lunch hours.
Robyn Swanson, senior vice president of member experience at the credit union, said the branch serves as an olive branch to the younger generation.
“Our membership is aging. We need to be more accessible to teen markets and this gives us the opportunity to do that,” Swanson said.
Swanson said the average age of their credit union members is between 48 and 50, and many of them are turning into savers, rather than borrowers. That’s a problem for credit unions since they make most of their money through loans.
By establishing a relationship with students before they go to college, Swanson said they are hoping they become lifelong members. Swanson said the credit union is working to open another branch in Westbrook High School by early next year.
Meanwhile, Rockville Bank opened its first “in-school” branch this year at South Windsor High School.
The new branch serves only South Windsor High School students, faculty and administrative staff and is not open to the general public. The branch, which is located in the school’s main lobby, is staffed by a supervisor from Rockville Bank and two student employees called “student bankers.”
“All the students are going to see the Rockville Bank brand,” said William J. McGurk, president and CEO of Rockville Bank. “We are looking forward to creating that awareness.”
Hartford-based Franklin Trust Federal Credit Union is in the process of opening their Downtown Hartford branch at High School Inc. the finance and insurance academy for city high school students. It will be a full-service facility, with an ATM that is accessible 24/7, said Aaron Carbone director of business development at the credit union.
Carbone said the credit union is also in the process of opening a satellite office inside Hartford Public High School for exclusive use by the school’s students, staff and employees when school is in session.
Besides the marketing aspect, local bank and credit union executives say the in-school branches fill a glaring need to help improve student financial literacy.
According to a 2008 survey done by the Jump$tart Coalition, high school seniors have a lot to learn about important financial concepts. As part of that survey, high school seniors across the country were given a 31-question exam on basic finance topics. On average, students only answered 48.3 percent of those questions correctly. That average score was a decrease from those posted by the senior class of 2006, which correctly answered 52.4 percent of the questions.
Among the findings in the survey:
•Forty-eight percent of students correctly said that a credit card holder who only pays the minimum amount on monthly card balances will pay more in annual finance charges than a card holder who pays their balance in full;
• Seventeen percent correctly answered that stocks are likely to yield higher returns than savings bonds, savings accounts and checking accounts over the next 18 years, even though there has never been an 18-year period where this wasn’t true; and
• Forty percent correctly answered that they could lose their health insurance if their parents become unemployed.
Swanson said Seasons Federal will give students the opportunity to learn how to manage their money and make responsible financial decisions.
“It’s our responsibility to help educate young people on how to properly manger their finances,” Swanson said. “We need to help them grow to be financially responsible adults.”
Greg Bordonaro is a Hartford Business Journal staff writer.
