ORLANDO—While credit unions covet Millennials, the real generation to target is Generation Z, according to one analyst.
During a keynote presentation to the CSCU 2017 Annual Conference here, Jason Dorsey cited several reasons why Gen Z is a perfect fit for credit unions, more so than Millennials.
Referring to the company’s national research, Dorsey, co-founder and chief strategy officer at the Center for Generational Kinetics, noted that first, Generation Z has watched as some Millennials have fallen deep into debt and does not want to follow them.
“They don’t want to be thought of as entitled,” said Dorsey, who also addressed the work ethic of Gen Z. “They want to pay their dues. They tell employers that they will take whatever job is available and work their way up.”
Student Loan Debt
One big issue Gen Z has with the generation preceding them, according to Dorsey, is the massive amount of student loan debt Millennials have racked up.
“Generation Z is intentionally choosing to attend less-expensive universities and is graduating with much less college debt. They say they want no part of the college debt load Millennials have taken on,” said Dorsey.
Lower college debt gives individuals greater mobility to choose where to live and in what line of business to work, said Dorsey.
“It also means Gen Z is better able to save for a car, home and retirement, all things a credit union can help them with,” he said. “I hope you can see that Generation Z is made for credit unions.”
A big reason why members of Generation Z are also excellent workers and frugal with their money is that they were raised by Gen X parents who did not coddle their kids, said Dorsey, who noted that Millennials were raised by Baby Boomers.
Dorsey explained that most Boomers set out to raise their kids so they have things better than they did.
“Well, the Boomers succeeded in doing that,” said Dorsey, suggesting that type of parenting contributed to the feeling of entitlement often associated with Millennials--and also needing financial support from their parents. He suggested that Gen Z possesses the opposite characteristics, choosing to save money on their own, make their own spending money, and discuss finances openly with their parents.
“Seventy-seven percent of Generation Z earn their own spending money—the same exact percentage as Millennials who are 10 years older,” said Dorsey. “This group has already figured out ways to earn their own money.”
The New Boomers
Dorsey noted that, ironically, Gen Z acts like the new Baby Boomers.
He added that the credit union co-operative structure and straightforward banking approach mesh with how Gen Z shops for things.
“They don’t buy the big brand name clothes because they have designer logos that go out of style faster and they just cost more,” said Dorsey.
According to Dorsey, today Gen Z makes up 10% of CU members, Millennials 30%, Boomers 30%, Gen X 20% and Traditionalists 10%.
Dorsey added that credit unions might be surprised to know that Millennials make up about 40% of their total work force.
“At smaller credit unions this percentage might be different,” said Dorsey.