How Credit Unions Can Attract & Retain Gen Z Members
Why Gen Z Holds the Key to Credit Union Growth
Gen Z is one of the most discussed demographics in the financial sector, offering credit unions an unparalleled opportunity to expand their membership base and foster long-term growth. However, effectively capturing Gen Z’s attention requires a deep understanding of who they are and what drives their decisions. With the right marketing strategy, credit unions can align their offerings with Gen Z’s demand for innovation, transparency, and meaningful financial solutions.
Understanding Gen Z
Gen Z—born between 1996 and 2010— are the first generation of true “digital natives,” having grown up with technology and the internet embedded in their daily lives (McKinsey & Company, 2024). Characterized by their idealism, this generation has a heightened focus on social responsibility issues like climate change, more so than any other generation. For Gen Z, online platforms are the primary space for forming opinions, making decisions, and shaping their worldviews, from work and shopping to building relationships.
Modernization is central to Gen Z’s priorities. Unlike older generations, who may approach digital innovation cautiously, Gen Z demands seamless digital banking experiences, a strong commitment to social responsibility, and cutting-edge financial solutions. Falling short in these areas can have significant consequences. According to PYMNTS’ How Credit Union Innovation Can Drive Gen Z Engagement Report, an astounding 42% of Gen Z members switched financial institutions in the past year, compared to just 3.9% of baby boomers and seniors. This high turnover rate underscores a unique opportunity for credit unions to step in and capture the loyalty of this pivotal generation.
Credit Unions: Ready to Fill the Void
Credit unions are uniquely positioned to meet the needs of Gen Z where traditional banks fall short. By adopting a thoughtful and authentic marketing strategy that highlights innovation, member-focused values, and social responsibility, credit unions can build meaningful connections with this generation. Now is the time to embrace the challenge and deliver the digital, socially conscious, and community-driven banking experience that Gen Z seeks.
Why Digital-First Banking Matters to Gen Z
The Challenge:
Understanding why Gen Z moves away from financial institutions is key to addressing their needs. Gen Z has high expectations for digital banking products, with 30% of Gen Z credit union members stating they would switch financial institutions if theirs did not innovate (PYMNTS, 2024). While “innovation” is often touted as a priority, many financial institutions fail to transform this idea into tangible, actionable solutions—particularly in delivering seamless, end-to-end digital-first experiences.
For Gen Z, digital convenience isn’t a luxury; it’s a baseline expectation. According to a survey conducted by MX Technologies, 79% of Gen Z prefer managing their financial needs entirely online. Furthermore, Cornerstone Advisors reports that 95% of Gen Z use mobile banking apps as their primary money management tool. Failing to provide these digital-first experiences can hinder retention, as Gen Z demands more integrated, accessible and flexible financial service options.
The Opportunity:
To truly capture Gen Z’s attention, credit unions must prioritize digital solutions that are easy to use, secure, and efficient, like mobile apps with robust features, P2P payment platforms, and QR-code payment options. However, offering the right products is just the beginning—marketing them effectively is what sets credit unions apart.
Credit unions need to highlight how these digital tools enhance convenience, security, and the overall member experience. Effective credit union marketing campaigns should focus on showcasing real-life examples that resonate emotionally with Gen Z. For instance, a campaign might feature a young member who, using a mobile app, saved for their first home and effortlessly managed their mortgage payments. This not only demonstrates the innovation and reliability of the tools, but also illustrates how the credit union empowers its members to achieve important financial milestones.
Key Takeaway:
By offering innovative, digital-first products and marketing them effectively, credit unions can build strong connections with Gen Z and reduce member churn.
How Credit Unions Can Help Gen Z Build Financial Confidence
The Challenge:
Financial literacy remains a significant challenge for Gen Z. A study by the TIAA Institute-GFLEC found that only 37% of Gen Z correctly answered financial literacy questions on assessments covering budgeting, investing, and credit management. Similarly, a Credit One Bank survey revealed that more than 50% of Gen Z enter adulthood without any formal financial education. Despite these challenges, Gen Z is eager to take control of their financial future. A new study by FICO found that 50% of Gen Z believe personal finance is one of the most valuable subjects that should be taught in high school. When it comes to real-world financial skills, 61% say understanding credit scores is a top priority, second only to managing a checking and savings account (64%). This demand for financial education signals an opportunity for credit unions to provide the guidance Gen Z is actively seeking.
The Opportunity:
Credit unions can address this gap by offering tailored tools and resources that meet the needs of young adults. Budgeting calculators, investment simulators, and savings planners accessible directly through a credit union’s website or app can empower Gen Z to take control of their financial futures. Additionally, offering webinars or workshops covering key topics like student loan management, first-time home buying, or credit-building can further demonstrate the credit union’s commitment to financial education.
While offering these tools is essential, marketing them effectively is equally important. Credit unions must ensure that their financial literacy resources are presented as accessible, practical, and easy-to-use. Marketing campaigns should showcase how these tools enable Gen Z to make informed decisions—whether budgeting for the future, investing for the first time, or preparing for big life milestones.
Leveraging social media platforms like Instagram can significantly boost engagement. By creating short, relatable content—such as simple videos explaining compound interest, credit scores, or other financial basics—credit unions can make complex concepts digestible and relevant. Approaching financial education in this way not only fosters deeper engagement with Gen Z but also positions credit unions as a go-to resource for accessible financial empowerment.
Key Takeaway:
By offering accessible financial education and personalized advice, credit unions can empower Gen Z, foster confidence, and build lasting loyalty.
Gen Z Cares About Ethics—Here’s How Credit Unions Can Keep Up
The Challenge:
Gen Z places a high value on corporate responsibility, with 95% believing that companies should actively address social and environmental issues (Vorecol, 2024). Although credit unions naturally align with many of these values—such as transparency, fairness, and community focus—the challenge is that awareness among Gen Z about these principles is still relatively low.
The Opportunity:
Credit unions are well-positioned to stand out by emphasizing their not-for-profit model, which prioritizes member well-being and ethical business practices. This distinction allows credit unions to demonstrate their commitment to social and environmental causes in a way that resonates with Gen Z’s values.
Credit unions should use storytelling as a key part of their marketing strategy. By sharing impactful stories—such as how credit unions have supported local communities, helped members achieve financial freedom, or championed sustainability initiatives—they can effectively communicate their alignment with Gen Z’s desire for ethical, purpose-driven financial institutions.
Social media platforms provide an ideal channel to authentically showcase these efforts. Engaging marketing campaigns that highlight initiatives—such as “green” loan programs, eco-friendly investments, or partnerships with food banks and animal shelters—will further build trust with socially conscious Gen Z members.
Key Takeaway:
To build meaningful connections with Gen Z, credit unions must authentically showcase their social responsibility and community impact, positioning themselves as ethical financial institutions that align with the values Gen Z cares most about.
Creating Financial Products Gen Z Wants and Needs
The Challenge:
Gen Z is more inclined to use financial products than any previous generation—up to 28 products per person, with an average of 10 products or features in the past year and would use additional ones if offered (PYMNTS, 2024). However, Gen Z also expects financial products tailored to their unique circumstances. A national survey by Morning Consult, on behalf of the American Bankers Association, found that mobile banking apps are now the most-used channel for managing accounts. Nearly 64% of Gen Z rely on mobile banking apps over any other method, while only 4% prefer visiting a physical branch.
The Opportunity:
Credit unions can differentiate by offering customized products like low-fee accounts, flexible loans, and app-based tools. However, the key to attracting and retaining Gen Z lies not just in offering these products, but in marketing the benefits, value, and emotional appeal behind them.
Marketing campaigns should emphasize how these products empower Gen Z to reach their financial goals, rather than simply listing features or rates. Highlight the flexibility, convenience, and peace of mind these solutions offer, ensuring that Gen Z feels these products are tailored specifically for their needs. For example, rather than simply promoting a personal loan, showcase how it can help Gen Z pay off high-interest credit card debt or fund a major life milestone, like paying for a wedding, without the financial strain. Highlight how the loan’s lower interest rates and flexible repayment terms give them the freedom to manage their finances more effectively, easing their stress and empowering them to achieve their goals.
Additionally, highlight the broader value propositions. Showcase the tangible benefits—such as long-term savings, financial flexibility, and a sense of security—that come with using financial products designed for a modern, mobile-first generation. This approach taps into the emotional connection, making the product feel not just relevant, but indispensable.
Key Takeaway:
By offering customized financial products and effectively marketing their benefits, credit unions can create an emotional connection with Gen Z, build loyalty, and differentiate themselves from competitors. This strategy not only meets Gen Z’s financial needs but also aligns with their values, making these products feel essential to their financial journey.
Continuing the Journey to Gen Z Engagement
As more Gen Z members turn away from traditional financial institutions, credit unions must position themselves as innovative, member-centric organizations that prioritize digital-first solutions, financial literacy, social responsibility, and personalized services. By embracing these values and implementing forward-thinking marketing strategies, credit unions can secure loyalty from a generation that is eager for change.
Full Tank Creative specializes in developing tailored marketing strategies that resonate with Gen Z. Contact us today to help your credit union stand out and cultivate lasting relationships with this powerful generation.