Tailoring Member Growth Strategies From Gen X to Gen Z

All credit unions want to grow; both in their membership and deposits. Diversifying your customer base across different generations sets you up for long-term growth. Consider that: 

• Gen X has a third of the wealth in America 
• Millennials have overtaken the lead of the largest population segment
• Gen Z holds $360 billion in buying power

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Appealing to each generation requires its own unique strategy. What works for Gen X certainly won’t work for Gen Z, and understanding these differences helps you foster stronger connections with prospects and position you for sustained success. By diving into the unique preferences and priorities of each of these generations, credit unions can craft targeted member growth strategies that align with their expectations.

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Generation X Priorities & Insights

Gen X, in their 40’s and 50’s, was the only generation to recover the wealth they lost during the Great Recession in 2008. Despite that recovery, they feel behind on retirement and emergency savings. In fact, a recent Bankrate survey shows that Gen X feel the least financially secure out of all the generations. As a result, they prioritize stability and security over risk-taking and prefer traditional banking methods and personal relationships. They recognize the value of their home equity, and 64 percent would be willing to tap into it for home improvements—but not much else.

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With these priorities in mind, credit unions should:

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• Educate Gen X about their HELOC and HELOAN options outside of home improvement. With Gen X taking care of both their children and their aging parents, and feeling strapped for cash, home equity loans can support a wide variety of needs including debt consolidation, uninsured medical expenses, or a well deserved vacation. Finding ways to educate Gen X about the options and potentials with home equity loans will encourage them to tap into that equity for a multitude of purposes to best fit where they are today.
• Improve the borrower experience. Frontline interactions, lending processes, and in-person experiences can give Gen X a peace of mind and confidence in your institution. By focusing on streamlining and automating slow and tedious parts of the lending process, credit unions can focus on delivering the right solutions to Gen X with a personal touch.

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Millennial Priorities & Insights

Millennials range in age from late 20’s to early 40’s, squarely in the center of many important financial decisions—from student loan debt to home purchases to growing family needs. They’ve battled a series of economic challenges and now face a difficult job market with wage stagnation, which means millennials are on the lookout for the best options and will nimbly change on a dime when their needs aren’t being met. 

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A report from CoreLogic in 2021 shows that millennials made up two-thirds of first-time home purchase applications and one-third of repeat home purchase applications. Fast-forward to now, and many of these folks are now homeowners with three years’ worth of payments on their mortgage. They may be looking to make home improvements or looking for loan options for major life events (in fact, 41 percent are planning to tap into their home equity in 2024).

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Millennials are prime targets for HELOC and HELOAN options, and credit unions need to ensure they’re ready for a millennial’s service expectations to win their business. Like Gen X, 79% percent want a personalized banking relationship, but nearly half consider a digital experience to be very important. As a result, credit unions should:

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• Simplify home equity loan processes. A weak, disjointed loan process that takes weeks to close will chase millennials away. But embracing technology to create an easy, streamlined experience for HELOC and HELOANs delivers on what millennials expect,  comparable to the ease of an auto loan.
• Create strong personal relationships. Whenever a question about their finances comes up, millennials want fast answers and personalized help. Strong borrower experiences include transparency and communication, keeping borrowers in the loop during the lending process.

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Generation Z Priorities & Insights

The oldest members of Gen Z are in their early-to-mid 20’s, putting them in a prime spot for an FI’s member growth strategies—both now, and in your five-year plans. But Gen Z needs encouragement. More than two-thirds of Gen Zers rate their financial situation as fair or worse, and half are worried about not having enough money due to inflation and student loan debt. 

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Despite their anxieties, Gen Z is increasing their financial literacy and holding credit unions to high expectations. Almost half of Gen Z homeowners in a recent survey are planning to take out a home equity loan this year. Because they are digital natives, they demand a winning digital experience. In fact, 82 percent would switch credit unions for a superior online experience and 75 percent dislike going to a physical branch.

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As more and more Gen Zers start buying homes and getting more involved in financial decision-making, financial institutions need to be ready for the incoming surge. By starting to make the strategic moves now, credit unions will be better prepared for the influx of younger customers, by:

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• Prioritizing an immediate, digital experience. Gen Zers will leave a financial institution to find better customer interactions elsewhere, especially in the digital space. And with many tapping into their home equity this year, the most convenient experience is sure to win out.
• Ensuring strong interactions. Gen Z may not like in-person interactions as much as digital, but with growing financial literacy and high expectations, credit unions need to be prepared to answer questions and make recommendations to build trust and relationships with the newer generations.

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Creating Standout Borrower Experiences for All

From Gen X to Gen Z, all generations long for a standout borrower experience that keeps customers informed, educated, and connected to your brand. Coviance empowers credit unions and community banks to create streamlined, digital experiences while building strong relations to build member growth. We enable an automed, digital lending process that makes lenders fast, flexible, and modern from start to finish:

• Our Point of Sale instantly provides a soft credit offering and loan options for fixed rates or line of credits through an online home equity loan application. 
• Borrowers can access the Borrower Portal at any time to see their tasks and communicate with lenders.
• Borrower Led Photos puts power into the borrowers hands to quickly validate the condition of their property before loan approval.
• Our Automatic Document Exchange automates e-signing of disclosures and documents to get money into the borrowers’ hands faster.

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For more information about how Coviance provides a powerful borrower experience for all customers, visit coviance.com/platform/borrower-experience.