Gen Z Pressures Credit Unions to Deliver AI

Credit unions face a generational crossroads as Gen Z members emerge as their most at-risk segment, a cohort ready to switch providers if their financial institution cannot keep up with their digital expectations.

Joint research from PYMNTS Intelligence and Velera shows that while Gen Z often begins with the same inherited credit union relationships as their parents, they are far less inclined to stay unless those institutions evolve to match the way this generation manages money.

Technology Can Be a Lure

The report underscores that Gen Z financial lives are shaped by digital navigation, self-education and a desire for simple, tech-enabled control.

These consumers are comfortable evaluating multiple options across channels and mixing providers to meet their needs. They move seamlessly between mobile banking and in-person visits, expecting consistency and personalization throughout.

That fluidity makes technology a powerful differentiator, not just a convenience. Credit unions that deliver real-time insights, integrated experiences and tools that anticipate needs rather than simply respond to them can position themselves as not only relevant but indispensable to younger members.

How Gen Z Uses AI

Gen Z’s rapid adoption of artificial intelligence (AI) tools is central to that shift. The report highlights that 6 in 10 Gen Z members, or 62%, are interested in using AI to run “what if” financial planning scenarios, such as how interest rate moves or changes in their income might affect their financial position. That makes AI not just a research tool but a co-planner for navigating uncertainty.

The report also finds that generative AI has raised the bar for personalization, with tools like ChatGPT and Gemini shaping expectations for instant, context-rich responses. These interactions help Gen Z compare financial institutions quickly, further intensifying competition.

Beyond planning, AI reinforces their desire for relevance and convenience. Gen Z wants recommendations that reflect their behavior, spending patterns and goals. They want nudges and education delivered in a tone and format that resonates with their identity. They expect their financial institution to respond with the same immediacy and adaptability as the digital tools they already use daily.

Turning AI Into a Competitive Advantage

Credit unions already have a foundation to build on. Gen Z gives credit unions higher marks than older consumers for understanding their needs and for being technologically advanced, at 22% and 23% respectively. While they score CUs lower on traditional differentiators such as community focus or lower fees, the perceived edge in technology and member comprehension represents a strategic doorway.

Deploying AI can widen that doorway. Credit unions that incorporate AI into budgeting tools, financial education, scenario planning and personalized alerts can shift from being a transactional provider to a real-time partner in financial decisioning. AI also enables the integrated experiences Gen Z expects as they move between digital and physical channels. Investments in AI-powered infrastructure, such as chatbots or predictive analytics, allow CUs to deliver guidance instantly while freeing staff to handle more complex, relationship-building interactions.

For younger members who feel less in control of their financial lives than previous generations, these features are not short-term perks. They are signals that a financial institution understands their challenges and is capable of supporting their financial journey on their terms.

The opportunity for credit unions is clear. By leaning into AI capabilities that provide clarity, convenience and tailored insights, they can meet Gen Z where they already are and strengthen ties with members who might otherwise drift to digital-only competitors.