6 ways credit unions can attract Gen Z during coronavirus
Until 2020, Generation Z was set to enter the workforce in the middle of a thriving economy with record-low unemployment rates. However, in the midst of COVID-19, our youngest generation is coming of age during a global crisis.
Between the ages of 10 and 24, most Gen Zers have not yet had the opportunity to build an emergency fund, invest in a retirement plan or gain full-time employment. Now, the oldest of this generation are having to navigate finding a job, paying student loans and managing their own money during a crisis.
Credit unions were founded to address these very issues as well as wealth inequality and accessibility. So how can credit unions resonate with Gen Z as they come of age and enter adulthood during a crisis? It’s all about understanding and validating their fears, addressing their needs without judgement and tapping into their hopes for the future.
Offer low-interest student loans
Gen Z is the most well-educated generation to date. While the youngest Gen Z-ers are in fourth grade, the oldest of this generation have graduated college with more student debt than previous generations. While the costs of education and housing have skyrocketed, the average entry level income is barely higher than it was for baby boomers, giving Gen Z a tough financial start.
Gen Z is financially conscious and values stability. Experiencing a crisis as they enter the workforce, has made many Gen Zers anxious about achieving financial stability during an economic downturn. By offering low-interest student loans, you can validate their frustrations and provide hope for the possibility of a future without debt.
Provide high-interest checking and savings accounts
Accumulating wealth is harder than ever, especially in the midst of a global crisis. The penny-pinching mentality of traditional banks is a huge turnoff for this generation. Gen Z is understandably skeptical of old-school savings tactics, because what worked for baby boomers simply doesn’t work in the modern economic landscape.
For Gen Z, it’s about saving in small ways that add up over time, without having to put their lives on hold to pay off debt. Show them how they can do that with high-interest checking and savings accounts. Emphasize that high-interest accounts are an easy way to accrue wealth without having to put off important life events or pinch pennies throughout their 20s and 30s.
Make personal loan standards more accessible
The oldest of Gen Z tend to work in retail, grocery stores and restaurants. These young workers were vulnerable to job loss before the pandemic, as they are overrepresented in high-risk service-industry jobs. With little work experience, no emergency funds, crippling student debt and ongoing monthly expenses, Gen Z is in need of low-interest personal loans. But many Gen Zers have little or no credit history.
While Gen Z is financially conscious, many in this age group are anxious about their spending habits and financial status. Avoid messaging that shames Gen Z for their spending or lack of credit.
Instead, acknowledge the fact that little or bad credit is often unavoidable during a crisis and explain alternative ways that your credit union determines creditworthiness.
Offer financial guidance that validates their fears
Navigating early adulthood is scary, especially during a crisis. Many Gen Zers are receiving financial help from their parents and worry that money problems will hold them back from financial independence.
And their student debt isn’t helping. Gen Z has watched millennials struggle with student debt and want proactive advice to help them manage their debt better than millennials.
Keep in mind that many Gen Zers feel they cannot get sound financial advice from their parents, who likely can’t relate to their current situation. As a credit union, you can offer realistic, shame-free financial tips for the modern young adult, such as how to downsize expenses without giving up your social life, managing the cost of living when single, and paying off student debt while building an emergency fund.
Lead with digital banking
Gen Z is the first generation of digital natives who have little or no memory of a world without smartphones. If you think Gen Zers are going to wait five minutes while you put them on hold, think again. In fact, they probably won’t even call you, and they’re not likely to make the trip to your physical location.
This is a generation who values digital connection, high-speed online customer service, and the ability to manage their money from anywhere. Gen Zers will not work with companies who have low-quality digital services, slow-loading websites or limited online banking capabilities. If you haven’t already, start looking into implementing a customer services chat line to better connect with Gen Z digitally.
Embrace diverse representation
This year has brought about more than one crisis, with the rise of Black Lives Matter and an increasing demand for diverse representation and inclusivity. Gen Z is the most racially and ethnically diverse generation to date.
It’s no secret that economic downturns disproportionately affect minorities and low-income families, and COVID-19 is no exception.
Gen Z is the activist generation and they are choosing businesses who not only meet their needs, but align with their social and political beliefs. Now more than ever, it’s important that your credit union embraces diversity in your hiring practices, customer base, suite of services, messaging, and even your locations.
As our youngest generation comes of age, credit unions are scrambling to resonate with this new demographic of young adults. Remember that this generation is getting their financial footing during a global crisis. If you cater to their specific financial needs, validate their concerns during this difficult time, and offer guidance without judgement, you will gain loyal customers for life.