74% of Credit Union Members Pass the Loyalty Test

Credit unions face a retention challenge that has less to do with age than with architecture.

That is the central takeaway from “Digital-First Retention Playbook: Winning Gen Z Loyalty at Credit Unions,” a PYMNTS Intelligence report produced in collaboration with Velera.

While the report focuses on younger members, its findings point to a broader shift underway in financial services. Expectations shaped by digital platforms, artificial intelligence and seamless service are no longer confined to one generation.

They are becoming the baseline for everyone.

The report finds that credit unions retain an underlying advantage in trust and familiarity, but that advantage is fragile. Members now compare their financial institutions not only with banks, but with apps, platforms and AI tools that deliver speed, personalization and clarity.

The result is a new form of competition. Retention depends less on rates or branch access and more on whether institutions can integrate digital intelligence into everyday financial decisions.

Three data points from the report illustrate how quickly expectations are shifting.

36% of Gen Z credit union members say they are likely to consider leaving their institution, more than twice the share of consumers across all age groups who say the same. That gap highlights how digital comparison tools are lowering switching friction.

72% of Gen Z consumers report feeling uniquely challenged by today’s economy. This sense of diminished control is driving demand for tools that simplify decisions, forecast outcomes and provide reassurance in real time.

62% of Gen Z members express interest in using AI for “what if” financial planning. This reflects a broader acceptance of artificial intelligence as a planning partner rather than a novelty feature.

What matters for credit unions is not the age of the user, but the behavior these numbers represent. Consumers are increasingly comfortable outsourcing parts of financial thinking to algorithms that explain tradeoffs, compare options and respond instantly.

Generative AI tools such as ChatGPT and Gemini have reset expectations for responsiveness and relevance. Financial institutions are now judged against that experience, even when members do not explicitly articulate it.

The report also underscores a misconception that digital preference means digital exclusivity. Nearly half of Gen Z consumers prefer in-person engagement when seeking financial advice, a higher share than any other age group.

The implication is a structural one. Members want continuity across channels, not replacement of one channel with another. Institutions that continue to treat digital and physical touchpoints as separate silos risk eroding trust rather than strengthening it.

This is where credit unions retain leverage. The data show that credit unions score relatively well with younger members on feeling known and understood, as well as on perceptions of technological advancement.

These attributes align with the cooperative model, but only if supported by modern infrastructure. Personalization that feels generic or delayed undermines credibility. Messaging that does not match lived experience falls flat.

The report’s concluding findings point to an operational mandate. Credit unions must invest in systems that enable real-time personalization, seamless transitions between channels and authentic communication across the platforms members actually use. That includes mobile apps, social media, podcasts and AI-enabled interfaces. It also requires rethinking how advice is delivered, moving from static guidance to interactive support that adapts as circumstances change.

The generational lens is useful, but incomplete. What the report ultimately documents is a broader recalibration of financial services around immediacy, relevance and trust. Institutions that meet those expectations will retain loyalty across age groups. Those that do not will struggle to keep pace.

The shift is already underway.