Call them what you will. Gen X, Gen Y, Millennials orthe Echo Boom. They are the next generation of consumers who havecrossed the bridge from a brick and mortar world to an environmentthat thrives on digital interactions.

More importantly, they expect credit unions to be there to servethem digitally by putting information at their fingertips 24/7.This population, comprised of 70 million young adults 18 to 35years old, is the market segment that will sustain credit uniongrowth and relevance over the next 20 to 30 years. Fortunately,they also happen to embrace the same values that credit unions werebuilt on: trust, community and service. Therefore, credit unionscan be perfectly poised to meet the demands of these covetedconsumers when they go shopping for financial services, providedthey are able to deliver digital financial services.

Without question, opportunity for growth in this segment isabundant. Credit unions added a record setting three million newmembers in 2012. Now the challenge is to delight these members withengaging and innovative services that exceed their expectations forconvenience and value. But it is important to note, that whileyounger consumers are driving early adoption of mobile technology,mobile is expected to quickly become an essential service forconsumers of all ages. So, for a number of compelling reasons, nowis the time to move.

A recommended first step into this market is partnering with aflexible mobile wallet solution that is not constrained to a singlebrand. For example, Lake Trust Credit Union in Lansing, Mich., wasthe first credit union in the U.S. to deploy MasterCard'sMasterPass digital wallet service. Like other mobile wallets,MasterPass provides online shoppers with a simple checkout processby eliminating the need to enter detailed shipping and cardinformation with every purchase.

The mobile wallet is also a building block for a host of otheropportunities. Credit unions can leverage the mobile channel todeliver value-added services such as rewards, coupons,location-based offers and other analytically driven services thatimpact the spending behavior of consumers.

There is enormous attention focused on the new entrants into themobile payments arena with the likes of PayPal and Apple iTunescompeting for the eyeballs and fingertips of consumers. The likelygoal of this new breed of mobile financial ­services providers isto ultimately offer products that directly compete with creditunions. Their strategies center on giving consumers precisely whatthey demand: information, ease of use, speed and convenience.Solutions from these interlopers can cut out traditional aspects ofthe value chain, including the revenue from paymentsinterchange.

So the market for mobile payments technology represents both anopportunity and a threat when viewed through this lens. Theopportunity is clearly increased revenue and member loyalty. Thethreat is the looming recognition that credit unions that are notadopters of mobile technology can lose a significant share of boththeir payments income and future membership.

That's why the real motivation for offering a mobile walletshould be more than just satisfaction of your current members. Eachcredit union needs to demonstrate a commitment to innovation thatattracts new and younger members and creates the opportunity forenduring relationships, which is vital to the continued success ofour industry.

Venturing off into this brave new world can be intimidating. Themost efficient path to success for credit unions is acollaborative, strategic partnership with an organization that hasalready forged relationships with technology leaders andinnovators. Such relationships can streamline a credit union'sentry into the digital and mobile payments game and deliver theprovisions a credit union needs to survive and thrive across thedigital divide.

Fredda McDonald is executive vice president of the credit unionexperience division at PSCU.
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