Hope for Gen Z Comes in the Shape of Credit Unions

Generation Z has the potential to be the greatest credit union generation, but we are struggling financially and we need credit unions to step up to help.

After I signed the lease for my first apartment last year, instead of the excitement you might expect I would feel, all I felt was hopelessness. I kept hearing the words of the leasing agent in my mind: “Rent is going to be X but that doesn’t include the security deposit or electric/gas utilities or pet fee or parking or Wi-Fi or furniture or laundry. Oh and it will go up next year.” All I could hear was fee after fee after fee, topped off with the guarantee of rising rent. It felt like there was going to be an extra fee just to breathe. This is the harsh reality for Gen Z after college. We feel like we are financially falling behind even before our journey begins.

A few months ago, I attended a webinar that was supposed to be a facilitated discussion on what my generation (Gen Z) wants from their financial institutions, and how credit unions can connect with them. I had anticipated that someone of my generation would be speaking. How else would you be able to accurately represent the Gen Z perspective? To my disappointment, it was given by two people well beyond Gen Z, and while some of their statements were true, others were entirely inaccurate. Not including a Gen Z person in the conversation was a total miss. It’s a theme I have noticed in webinars and articles about Gen Z: they are all from the outsider’s perspective, observing us from a distance and not accurately reflecting our voice. After attending that webinar I asked myself, “As a member of Gen Z, what DO we really want from our financial institutions?”

Of course, we want the obvious elements like a strong mobile app and financial education, but the first thing that came to my mind was HOPE. More than anything, my generation needs hope for their financial future. With the cost of living through the roof (for example, the cost of groceries is up 25% since 2020), many young people right now are asking themselves, “What is the point?” We feel a sense of futility in making smart financial choices like where to bank or apply for a loan, wondering if our choices will amount to anything in the face of the rising cost of everything. 

Despite that—and perhaps because my dad works for a credit union and I now work for a firm that works intimately with credit unions—the conclusion I have drawn is that credit unions are the ideal financial institutions for Gen Z. Yet only 4% of Gen Z are currently members of a credit union. Why is that?

Perhaps the answer lies in that many members of Gen Z don’t even know what a credit union is, or if they do, they have misconceptions that deter them from being members. For example, the fact that credit unions are nonprofits in our communities should be a huge advantage in capturing younger members, as many of us loathe big corporations and find value in supporting local businesses.

But Gen Z is almost assuredly not aware of things like shared branching and therefore sees the localized aspect of a credit union to be a weakness rather than a strength.

Credit unions need to bridge this information and awareness gap, better leveraging social media to communicate frequently and hiring younger employees and ambassadors who can advocate from the inside, among many other strategies.

Gen Z Is Aligned With Credit Union Philosophy

There is a lot of alignment between the vision, mission and values of credit unions and what Gen Z is looking for—the messaging just needs to click. Ultimately, we want to feel like we are investing in something that will make a difference in our lives and in the lives of others. 

Credit unions are the prime foil to corporate banking greed. When I hear credit union board members share, “We need to keep members front and center in our minds at all times when making decisions for the credit union” or “We strive to have the lowest interest rates of any credit union in our area,” this is a refreshing change from the money-driven messaging of most corporations who seek to push the limits of what they can charge without losing customers, instituting absurd money grabs like surge pricing. 

Recently, I spoke with a credit union that is offering a mortgage loan with a down payment as low as 3%. This lower rate was established in direct response to their younger members being unable to buy a home in the current housing market. This type of offering can make a tangible difference in young people’s lives and is one example of how credit unions help us achieve our financial goals, hit life milestones, and offer up hope.

Credit unions can’t solve all of our problems, and they can’t control the external political and economic factors that contribute to the financial angst of Gen Z, but they have a unique opportunity to ease the emotional burden and equip Gen Z with the tools, products and support that we need to better position ourselves to reach our financial goals. Most importantly, credit unions can offer their young members HOPE for their financial future.

Lauren Paradise is the Governance Consulting Administrator for CUESolutions provider Quantum Governance, L3C. Lauren joined in the summer of 2023 as a recent graduate of Brown University with a B.A. in Anthropology on the archaeology track and with an additional certification in Data Science.

Quantum Governance provides credit unions, corporations, nonprofits, associations and governmental entities with strategic, cost-effective governance, ethics and management consulting, facilitation and evaluation. With more than 60% of Quantum Governance’s clients representing credit unions, the organization fields more engagements in the credit union community than in any other. Quantum Governance is home to more strategic governance experience than any other practice in the country. The firm is a unique L3C organization that integrates the best elements of both the for- and non-profit communities into one practice. It is a low-profit, limited-liability service organization dedicated to the public good and one of the very first such legal hybrid organizations in the United States.