Problem:
In the dynamic world of finance, the future looks progressively promising, particularly with the emergence of a new generation of consumers and potential members entering the market: Generation Z. Twenty-six years and younger, Generation Z accounts for approximately 20-25% of the world’s population and nearly $7 trillion in purchasing influence. They represent about 40% of the US consumer purchasing power. However, credit unions are not doing a good enough job of attracting and capturing market share from this demographic. A survey conducted by GOBankingRates determined that “only 26% of people ages 18 to 24 use credit unions.” That number drops to 14% for consumers between the ages of 25 and 34.2 Other studies are not quite as optimistic and estimate the share of Generation Z consumers that are credit union members somewhere between 4% and 19%.
With diverse finance options like big banks, digital apps, cryptocurrency, and fintechs, credit unions risk obsolescence if they fail to attract and retain Generation Z members. The question facing us, and the credit union industry, is the following:
How can we help Generation Z better understand the benefits of Credit Unions?
To avoid this pitfall, it is imperative to help Generation Z comprehend the advantages of credit unions: what we have to offer and how credit unions can support them. Credit unions must also meet them where they are. This involves embracing the digital age, utilizing social media to convey our “People Helping People” philosophy and values, and integrating the personalized service Gen Zers crave. Otherwise, this demographic finds itself flooded with information through social media, often from unreliable sources such as FinFluencers and peers, without professional expertise or personal connection.
A study by the Filene Research Institute emphasizes the significance of leveraging personalized interventions. The study notedthat “by offering personalized interventions or one-on-one financial coaching sessions, credit unions can positively impact and influence members’ financial management behavior.”
Innovative Solution:
Thrive aims to bridge the gap between Generation Z and credit unions through an intuitive mobile app offering personalized financial guidance. Users can gain access to a complimentary financial counselor from a network of nearly 8,000 financial counseling professionals certified through the Credit Union National Association now known as America’s Credit Unions (ACU).
After creating a profile, users interact with a conversational AI assistant to streamline the intake - capturing answers to questions around goals, counselor preferences, and advising them on preparation for effective sessions. Recommended counselors are then displayed, and appointments are scheduled. Users can choose from a variety of categories after completing the intake process, including online, in-branch or hybrid consultations. In-branch options are potentially available through approximately 600 Credit Unions nationwide.
The app incorporates financial education resources from ACU’s Financial Counseling Certification Program, providing a hyper-personalized AI experience by suggesting resources relevant to user questions while awaiting appointments. Additionally, user profiles store intake data and confidential meeting notes for later review, promoting continuity between counseling sessions.
Participating Credit Unions can gain a prospect pipeline and access micro/macro data through the consortium, bolstered by analyst insights for strategic growth. This solution fosters Credit Union market share while enhancing Gen Z’s understanding of how Credit Unions can contribute to their financial goals.