Young consumers are feeling the pinch. According to recent PYMNTS data, 73% of millennials live paycheck to paycheck — the highest rate among all generations, with Generation Z close behind at 66%. Beset by a bleak economic picture, consumers are looking to their financial institutions (FIs) for support, with one survey finding that 59% of retail bank customers expect their FIs to help improve their financial health.
To help young members navigate these challenging times, CUs must understand their unique needs and expectations. Younger consumers face struggles beyond current macroeconomic conditions. Primarily, this demographic often lacks essential financial education. Gen Z exhibits the lowest levels of credit education, according to FICO, with 29% of individuals in this age group unaware of or even lacking a credit score.
The “Credit Union Tracker®” explores how younger consumers could use some support — and why CUs are in a great position to help.
The University of Hawaii Federal Credit Union (UHFCU) collaborated with Zogo, an app that gamifies financial literacy, to cater to younger demographics. UHFCU pays a licensing fee to offer a co-branded Zogo app exclusively for its members. The move comes after the CU realized during the pandemic that it was struggling to meet the needs of its younger members.
PSCU recently released its credit card-based BNPL solution for CUs. The solution allows CUs to offer members the ability to convert post-purchase credit card transactions into installment payments. This solution is very popular among younger generations, with millennials most likely to use BNPL products.
For more on these and other stories, visit the Tracker’s News and Trends section.
As so few millennial and Gen Z consumers are credit union members, CUs must increase their efforts to attract and retain these generations.
To get the Insider POV, we spoke with Scott Young, managing vice president of emerging services at PSCU, about the importance of doing more to connect with younger, digital-first members — and providing more personalized, digital services.
CUs have been largely successful in innovating to meet the needs of their members, leading to high satisfaction rates. In a rapidly changing financial landscape, however, CUs must continue to innovate to meet member demands for the latest digital solutions — especially younger demographics, as just 5% of millennials and 4% of Gen Z are CU members. Largely digital natives, these generations expect seamless digital experiences.
To learn how CUs are working to cater to young members’ needs, read the Tracker’s PYMNTS Intelligence.