BOSTON — For U.S. credit unions, the challenge of attracting and keeping Generation Z members is shifting from providing digital access to proving relevance at the moments that shape financial confidence, according to new research from PYMNTS Intelligence and Velera.
That conclusion runs through “Digital-First Retention Playbook: Winning Gen Z Loyalty at Credit Unions,” a new edition of the PYMNTS Intelligence Credit Union Tracker Series, produced in collaboration with Velera. The report finds that while Gen Z members are highly desirable because of their long-term potential, they also represent one of the most unstable relationships for financial institutions.
Many Gen Z consumers inherit credit union memberships through their families, the report said. But compared with older generations, they report feeling less control over their financial lives and show a greater willingness to switch providers if expectations are not met. Digital capability, once a competitive advantage, is now viewed as a baseline requirement, the report added.
‘Assumed, Not Rewarded’
“Digital fluency is assumed, not rewarded,” the report said, adding that what differentiates institutions is their ability to deliver personalization, trust and practical guidance consistently across both digital and physical channels.
The research shows Gen Z members blend self-service tools with human interaction and are increasingly turning to artificial intelligence to plan and gain reassurance. Digital tools are used not just for transactions but also to test scenarios, compare options and navigate financial uncertainty, the organizations said.
Key Findings
Key findings highlight the pressure on credit unions to adapt:
- 36% of Gen Z credit union members said they are likely to consider leaving their institution, more than double the 14% reported across all age groups.
- 72% of Gen Z consumers said they face financial challenges unique to their generation, underscoring demand for simpler planning and decision-making tools.
- 62% percent of Gen Z members expressed interest in using AI for “what if” financial planning, signaling rising expectations for real-time, adaptive guidance.
Counter to Reputation
Despite their digital-first reputation, Gen Z members do not equate digital banking with isolation, the report found. Nearly half prefer in-person interaction when seeking financial advice — a higher share than any other age group. What they expect, however, is continuity, with context carried seamlessly from mobile apps to branches and support channels.
Traditional credit union strengths such as community focus and lower fees resonate less strongly with Gen Z than with older members, the research said. Still, Gen Z rates credit unions relatively well on understanding their needs and technological capability, creating what the report described as an opening to reframe long-standing values in more modern, practical ways.
