BOSTON– Members of Gen Z are more than twice as likely to consider leaving their credit unions (36%) as consumers across all age groups (14%), according to the PYMNTS Intelligence Credit Union Innovation Readiness index.
The findings, which are produced in collaboration with Velera, make clear that meeting younger financial consumers where they are is key to boosting and sustaining engagement, according to the companies.
“Gen Z are digital-first, but they are also flexible and adept at navigating between digital and physical channels,” PYMNTS said. “They expect high degrees of personalization and relevant insights from financial institutions.”
‘Highest Risk’
The research notes that Generation Z consumers—born between 1997 and 2012—are an increasingly sought-after credit union demographic.
“Members belonging to this age group are at the highest risk of switching to competing financial institutions (FIs), making their retention an urgent priority for CUs,” according to PYMNTS and Velera.
“Gen Z consumers perceive themselves as facing unique challenges and feel less in control of their financial lives than older age groups,” the companies said. “As the first digital-native generation, they are searching for tech-enabled, self-driven tools that help them simplify financial management and meet their goals. To win and retain their loyalty, credit unions need to meet them where they are, on their own terms and in their own language. Personalization, authenticity and convenience are the essential ingredients for engagement.”
Gen Z Expectations Are High
The research found that while Gen Z consumers are digital-first, they are also flexible and adept at navigating between digital and physical channels. They expect high degrees of personalization and relevant insights from financial institutions, the companies reported.
“Like previous generations, Gen Z consumers tend to adopt financial relationships handed down from their families, including credit union membership, at least initially,” PYMNTS Intelligence said. “However, they don’t always stick around.”
Additional Insights
The company said another recent survey offers insights into this risk. In Velera’s CU Growth Outlook 2025, young respondents cited both their FIs and older family members as their most trusted sources of financial advice, at 36% each.
“Nevertheless, many in Gen Z also trust digital influencers found on social media (28%) such as TikTok, YouTube and Instagram, who they often find more in tune with their values and lifestyles,” PYMNTS stated, “Gen Z consumers are also more willing to try something new than their elders. They are more open to exploring unfamiliar and complex financial products, feeling comfortable evaluating multiple options and working with a mix of providers to meet their needs.”
Lack of Control
According to the company, a lack of financial control drives Gen Z’s banking imperatives.
“A closer look reveals deeper reasons. According to the Velera report, Gen Z consumers feel less in control of their financial lives than previous generations,” PYMNTS said. “Nearly three-quarters (72%) say they face hurdles that other age groups do not. As a result, this generation is looking for tech-empowered, self-driven tools that simplify financial management and help them meet their goals. Their digital-first expectations and readiness to adopt new technologies point to a need for credit unions to focus on innovation and high-impact digital products and features to maintain strong ties with young consumers.”
Additional Findings
Additional findings in the research include:
- Gen Z consumers also expect a high degree of personalization in their financial services that matches their lifestyles, values and goals.
- Rapid adoption of AI tools is reshaping consumer behavior and expectations, and financial services are no exception. Gen Z members turn to AI chatbots to help plan for the unexpected. Sixty-two percent 62% of Gen Z consumers are open to using AI for ‘what if’ financial planning.
“Gen AI models like ChatGPT, Gemini and Claude—which respond to questions in real time, learn user preferences and offer relevant insights—are resetting the bar for what makes for “good service” for consumers,” the companies said. “As a result, Gen Z members increasingly expect their financial partners to anticipate their needs and preferences and provide real-time, personalized recommendations.”
- Gen Zers feel more uncertain about their current and future financial situation than older generations. “Given their willingness to embrace AI, it is not surprising, then, that they would turn to ChatGPT and its ilk to game out “what-if” scenarios. Gen Z consumers look to a wide variety of sources for financial advice and are comfortable curating their own mix of products and services. They’re quick to change partners, but credit unions have an edge, the research states.
- Digital-first does not mean digital-only. According to the Velera survey, members of this age group have different preferences for different activities. While roughly two-thirds prefer online engagement for paying bills and card control activities, nearly half (46%) favor in-person engagement when seeking financial advice, more than any other age group, PYMNTs said. Either way, however, they expect a consistent and integrated experience across all platforms.
- Gen Z equates digital relevance with authenticity. Gen Z members tend to view many of their digital interactions in the channels they frequent as more authentic and relevant to themselves than more traditional banking touch points, according to PYMNTS.
