The Key to Capturing Gen Z: Credit Unions Embrace Digital Personalization

When it comes to digital engagement, there’s a lot at stake for credit unions. As detailed in “How Credit Union Innovation Can Drive Gen Z Engagement,” a PYMNTS Intelligence report created in collaboration with Velera (formerly PSCU/Co-op Solutions), a growing percentage of Gen Z consumers are transitioning into higher-paying jobs and more rewarding career paths, meaning they will likely soon be spending more on big-ticket purchases, including automobiles and homes.

To reach them, a personal touch will be essential. Credit unions (CUs) have the advantage of personalization — and a receptive audience — to deepen their digital relationships with a broad range of members, Jeremiah Lotz, senior vice president, product and data experience at Velera, told PYMNTS.

The conversation took place as part of the continuing “What’s Next in Payments” series focused on how companies have been reinventing their digital efforts to connect with consumers.

When it comes to the digital engagement credit unions have with their end users, he said, it’s not just about how often they’re logging on, but how members are interacting with those CUs, and how effective the financial institution is in serving the needs of those digitally-minded consumers.

“One of the biggest measurements we look at is: Was a consumer able to complete something that they expected, and then how did they feel about that experience as they went through that process?” he said.

With analysis and digital insight that extends well beyond simply keeping tabs on logins and clicks of digital buttons, a holistic view begins to emerge as to how successful the credit union’s outreach has been — and how things can be improved.

If the credit unions are able to serve the needs of their various markets quickly and intuitively, said Lotz, “that’s how you’re going to capture the long-term digital users.”

Taking Stock of Different Demographics

There’s no one-size-fits-all approach to digital engagement, he said. The right digital experience means different things to different demographics, said Lotz, but there’s growth across the board in all age groups.

The conventional wisdom might hold that younger generations may be naturally more digitally-savvy than older cohorts. The fact is, though, that even older credit union members, boomers among them, have found value in taking more of their daily financial lives online, having been primed by ordering food and groceries through various apps and platforms to get things done with digital devices.

In short, he said, “all generations have had higher demand, and higher expectations, of digital capabilities” from their financial institutions. “Every generation is asking for new functions and new features, and even providing information through the digital channels that maybe we didn’t expect a few years ago when it comes to applying for credit cards and loans, for example.”

Improving the Outreach

The stage is set, then, for credit unions to capitalize on the advantages they already have with their members — and those advantages lie with personalization and collaboration. With the credit union service organization (CUSO) model in place, through Velera, data sharing and a wholesale embrace of technology through a central point of contact can help all CUs, Lotz said.

“By leveraging that consortium data and information across the credit union — we provide a best-in-class experience regardless of the FI [financial institution] they are with,” he said. In the meantime, CUs can make decisions more quickly and can even streamline the credit approval process. Artificial intelligence (AI) is being leveraged to help CUs offer even more intuitive and advanced decision-making and innovations extended to their end users. The same transaction level and account-level data that’s shared throughout the organization can be used to personalize experiences so that CUs can anticipate the next product or service that can be extended to the individual for consideration. A reminder that the member’s car payment or mortgage payment is due can — based on the individual’s background and data — help educate them that an extra $100 paydown on the loan can help save on interest and other fees down the line.

It’s a proactive approach rather than a reactive one, said Lotz — one that results in the member logging on not just to get basic banking done, but to ask, as Lotz put it, “What is my FI going to tell me today — and what is it going to direct me to in order to make my financial situation better?”