With only 4% of Gen Zers being current CU members and nearly 80% turning to social media for financial advice, PSCU’s Scott Young explains that now is the time for credit unions to play the role of influencer in providing younger generations with much-needed financial advice and education.
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Credit unions have to get younger. That is according to Scott Young, managing vice president of emerging services at PSCU. In an interview with PYMNTS, Young explained that because younger generations represent the future, CUs need to step up their efforts to attract and retain younger members in the present. In 2022, for example, only 4% of Generation Z were CU members.
A helpful way to frame these efforts is in what Young refers to as “share of mind.” Just as CUs vie for a consumer’s share of wallet for a particular product, he contends, they should also ask themselves what share of mind they have among younger generations.
“Is a member, especially a younger member, even thinking of me for the products and services [they want,] or are they just going [somewhere else]?” Young said. “Sometimes the younger generations don’t understand what’s a financial institution and what’s not. They’re just calling for a solution to make their day better.”
Younger consumers, he added, often do not even consider CUs as an option — something that CUs must strive to change.
Expanding share of mind requires CUs to meet members where they are. While some financial needs are similar across generations, others differ in important ways that CUs must take into account when serving Gen Z and millennial members. Younger consumers, he noted, have a strong desire for digital solutions and personalization.
“Different generations have different expectations,” said Young, adding that as digital natives, almost all Gen Z or millennial consumers use their phones for nearly everything.
Moreover, he said, Gen Zers not only expect to be able to use mobile channels to handle their financial affairs: Mobile is actually their most preferred. Millennials are also adopting digital banking solutions in droves, with digital wallets among the most popular products. Furthermore, the pandemic caused even baby boomers to migrate more to online channels — meaning that CUs’ efforts to bolster their digital capabilities will have a positive knock-on effect for all members.
He noted that many CUs are behind on digitization, with PYMNTS research finding that nearly 40% of CUs self-identify as lagging on efforts to launch new products. To provide the solutions young consumers want, it will be important for these laggards to step up their pace of product development.
Another important area that CUs should focus on involves using social media to help provide financial guidance, Young said. This might require CUs to rethink their outreach strategies and embrace emerging platforms popular among younger people, such as TikTok or Instagram.
“I think now is the time for credit unions to play the role of influencer by promoting financial wellness, offering product education and just advocating the value of the credit union movement — and not just let someone else do this.”