Who are the next generation of Credit Union Members?
As Credit Unions strive to engage the next generation, adapting to the evolving financial landscape is crucial. Gen Z, born between 1997 and 2015, embodies the shift toward digital solutions, streamlined processes, and personalised experiences.
For Credit Unions, Digital Transformation means embracing technologies that enhance convenience, security, and user experience. Revolving Credit is a natural fit for this transformation, offering flexibility and ease of access that aligns with Gen Z’s expectations.
These members grew up with instant information and seamless online interactions; hence, they demand similar immediacy and ease in their financial products. Integrating revolving credit into mobile apps with features like instant approvals, self-drawdown and easy-to-understand terms can meet these expectations.
Revolving Credit vs Buy Now Pay Later (BNPL) Products
As Credit Unions seek to engage the next generation, it’s crucial to adapt to the shifting financial preferences of Gen Z. The surge in Buy Now, Pay Later (BNPL) usage among Gen Z, growing from 6% in 2019 to 36% in 2021 (Forbes), underscores their appetite for Revolving Credit solutions that offer flexibility and convenience.
Credit Unions can position Revolving Credit as a safer alternative to BNPL. Unlike BNPL, Revolving Credit offered through Credit Unions can come with financial education and support, helping members manage their finances more responsibly. The structure of revolving credit, with clear terms and manageable repayment options, can prevent the pitfalls associated with BNPL, such as missed payments and declining credit scores. By promoting the responsible use of revolving credit, credit unions can provide Gen Z with a flexible yet secure financial tool that supports their long-term financial health.
Here’s how Credit Unions can captivate this generation with Revolving Credit:
Targeted Marketing Strategies
To attract and retain younger members, Credit Unions must demonstrate an understanding of technology and how it enhances financial products. Revolving Credit should be marketed, not just as a financial tool, but as a component of a broader lifestyle that offers flexibility and control; most importantly – in an ethical way.
Utilising targeted communication through mobile apps and digital channels allows Credit Unions to highlight the benefits of Revolving Credit, such as managing cash flow, making unexpected purchases, and accessing credit on-the-go.
Personalised messaging that speaks to the specific needs and aspirations of Gen Z will resonate more than generic promotions.
Tailored and Personalised Loan Products
Revolving Credit is inherently personalised, allowing members to borrow as needed within a credit limit and pay back over time, which is ideal for younger members with fluctuating financial needs. Credit Unions should focus on creating revolving credit solutions that are straightforward and transparent, catering to the desire for simplicity and control.
Leveraging Underused App Features
Credit Unions can enhance the appeal of Revolving Credit by leveraging underused app features. Transaction-based push notifications can remind members of available credit or upcoming payments, making it easier to manage their accounts. Allowing members to update their marketing consents, freeze their cards, or access Open Banking through the app can further streamline their experience.
Self-service options for credit management via the app make the process more intuitive and accessible.
Reducing Costs and Enhancing Member Service
Push notifications, in-app messaging, and digital statements not only reduce paper usage and costs but also offer a less intrusive, more immediate form of communication. With 60% of users typically enabling push notifications, this feature can enhance engagement and improve service without the intrusiveness of SMS or email. This real-time interaction is essential for managing Revolving Credit, where timely information can significantly impact financial decisions.
Conclusion
Captivating the next generation of credit union members requires a blend of modern technology, streamlined processes, targeted marketing, and personalised financial products. Revolving credit, when integrated with advanced digital solutions, offers a flexible and user-friendly option that aligns perfectly with Gen Z’s preferences. By embracing digital transformation, streamlining processes, and effectively communicating the benefits of revolving credit, credit unions can attract and retain younger members, positioning themselves as forward-thinking, member-centric institutions.
