Cracking the Code: Millennials and Gen Z


Millennials have always been a hot-button topic it seems, with discussions focusing on which industry they’re currently working on killing, why they refuse to do things the way generations before them did, and more importantly, how to market to and connect with them. Now, the generation below them, Gen Z, is being met with similar confusion and head scratching. But with a combined spending power of nearly $3 trillion, connecting with Millennials and Gen Z isn’t optional—though the process of marketing to them and engaging them is a complicated code that financial institutions just can’t seem to crack.

Take Gen Z’er Bolun Li, for example. While in high school, Li recalled a “financial literacy” seminar in which a bank representative came to his school and gave a long lecture on personal finance. After two long hours of his classmates staring at their phones and no one feeling engaged in any way, the representative tossed out some flyers that read “Open a checking account with us and get $20” before leaving. Needless to say, none of his classmates opened that account. And more importantly, none of them had learned anything about finance.

Cracking the code

It was this interaction that inspired Li and two of his classmates, Simon Komlos and Simran Singh, to create an app that would properly support their generation (and others) in becoming financially literate in a way that was engaging for them and would reward them for doing so. The app, Zogo, which now has over 350,000 users, hits on all the topics Li feels younger generations need and want from their financial institutions: a beautiful and intuitive app, rewards they can enjoy, and trust for the institution. These three traits are where he feels younger generations place their value, and where credit unions and other financial institutions may be missing the mark.

Now that’s not to say credit unions are completely failing at appealing to the younger generations. In fact, Li argues credit unions may have advantages that other financial institutions—such as banks and FinTechs—do not, however, they’re not using them effectively. First, is the credit union mission statement. Millennials and Gen Z care about the social responsibility of the organizations and companies they purchase from and work with. As not for profits with a care for their communities, credit unions certainly qualify as socially responsible, though their inability to market that to Gen Z almost makes it null and void, Li notes.

Furthermore, unlike digital FinTechs, credit unions still have branches, which despite the ever-growing argument that branches are on their way out, is still an option Gen Z wants—though not in their current form. And as for the big three things Gen Z looks for in a financial institution: beautiful apps, trust, and rewards, credit unions may seem to check all the necessary boxes on the surface, but Li argues they’re not going about it the right way. So how can credit unions improve on these things?

Form and function: both are important

Mobile is everything. If you don’t have a great mobile app, you can pretty much count yourself out. “But our credit union has an app that works really well!” You might argue, and you might be right. But does it have the clean and beautiful design that we see with new FinTechs and NeoBanks? More than likely, the answer here is no. Li conveys that while credit unions and even banks may have perfectly functional apps, they fail in their designs, which are outdated and clunky. This may seem very surface level, but if younger generations feel something has poor design or won’t be interesting to engage with, their trust in the institution can be hurt, and they may be less inclined to use that institution. Is this drastic, choosing a financial institution based on its aesthetic? Maybe. But that doesn’t change the fact that a clean and beautiful app will win over an outdated look any day.

As for intuitive, these clunky designs only hurt the app in this regard. It’s harder for members to find what they’re looking for and getting where they want to go requires way more navigation than should be required. Information should never be more than a page or two away. Make it any more complicated and you’ve lost their interest. This also applies for things such as referrals and claiming rewards. These should be completely digital and able to be done in about a minute (more on that later).

Below are some examples of modern apps, including Zogo, that have the design and look younger generations want in their apps. Does it look like your app?




Offer unique and fun rewards

Gen Z and Millennials are shoppers. And by this I mean they’re bargain hunters. They’re not going to select the first financial institution they come across that tosses them a “$20 for opening a checking account” flyer, they’re going to shop around and explore their options to find which place is offering the best incentives. If you want their business, you need to have better offers than the rest.

Now, before you start trying to explain that you offer account opening bonuses, cash for referring friends, or rewards for using your debit card, let me say this: those are not new or exciting. Everyone has those and they’re all exactly the same. Open an account and we’ll give you ten dollars. Swipe your debit card fifty times and get five dollars to Starbucks. And the list goes on…

If you read my previous article on the increasing popularity of FinTechs, you’ll recall that a big change in the industry is that consumers don’t want products or features, they want an experience. They want banking and handling their finances to be a fun and engaging experience where they feel rewarded, empowered, and in control of their finances. You’re not standing out with these rewards and you’re certainly not making it an interesting experience.

Let’s jump back to Zogo for a moment. How do they make learning about finance a positive experience for their users? How do they reward them? Zogo is all about “gamifying” their app to make it fun and engaging. Users get pineapples (points, for all intents and purposes) for reading small tidbits of information about finance and more for taking a short quiz about what they read. They can also get pineapples for referring friends, answering trivia questions, and interacting with the app in different ways. They can then exchange these pineapples for rewards. Furthermore, users gain XP by completing lessons and for doing lessons a certain number of days in a row. By doing this, they’ve effectively turned financial literacy into a game users feel excited and rewarded to participate in, all while learning about finance. A far cry from the two-hour lecture Li once sat through.

So, what can be done here? How can credit unions specifically apply this to their systems? Turning your mobile app into a game may be a bit much, but credit unions can still easily up the ante by offering members rewards for doing more than just swiping a card. Members could earn points for rewards by answering daily trivia questions on the app (something that will also encourage them to use the app at least once a day), checking their credit score, learning financial literacy, talking to a teller or financial wellness coach at a branch, or even for attending a financial seminar. Reward your members for their good financial behaviors and incentivize them to keep going in ways beyond spending.

If you’re not sure where to start, Zogo itself can be integrated into your mobile and online banking systems, so you can easily partner with them to encourage and reward your members for becoming financially literate. Let them know you genuinely care about their financial well-being and not just how often they use your card.

Gain trust through referrals 

As community focused financial institutions with long histories, credit unions often feel trust is where they excel. However, this may become increasingly inaccurate with younger and younger generations. First, as mentioned before, while Millennials and Gen Z are very focused on social responsibility, the credit union mission and core principles are failing to be marketed toward them. Many can’t name the difference between a bank and a credit union let alone know that credit unions are not for profit and the like.

Furthermore, they aren’t looking for their next financial institution by walking down the street and looking in windows. They’re not going to pick up the newspaper and read about your local food drive. They probably won’t notice the community focus unless they start going through your site (and that’s only if you pass the rewards and app/website test first). So how do you make your credit union trustworthy to younger generations?

Sure, you could try going into schools and educating them on the credit union difference, but this is not at all exciting, and seems especially inauthentic when you start handing out marketing materials, as Li can testify. The method could still work potentially, if you were to try some more engaging tactics during your seminar like trivia questions, rewards, and maybe splitting the class into teams and making a game of it (Ring a bell?).

Most importantly though, Millennials and Gen Z trust their friends and word of mouth more than anything. If you can get them to start referring friends and spreading the news, you’ll find that’s probably much more effective than waiting for them to come to you. Zogo, for example, saw 75% of its 350k user base come from referrals. However, this brings us back to having an intuitive app. If you’re making the referral process complicated, they’re not going to interact with it. Take the investing app Robinhood for example. Once on the referral page, users simply click on any phone contacts they want to invite and hit the invite button. Once their friend joins, they get their free stock. It only requires a few button presses and they can do it all without leaving the app. It’s easy for them and for their friends. See the images below for examples of this.




Credit unions on the other hand make the process way more complex. Many require you physically enter a branch to get a referral card (you’ve already lost them in this case) and beyond that even, you need to give it to the friend, have them fill it out, and return to the branch. Alternatively, digital referral programs often still require more steps such as filling out forms, emailing them to friends, having them fill them out and open accounts, etc. Good luck getting anyone to follow that process just to get a few bucks in their account.

Make your referrals completely digital and make them easy. A few clicks should be all that’s required or the effort won’t be worth it to them. If that’s the case, you’ve now lost potential members you could get from referrals and that current member may switch to an institution with an easier process…or if they get an easy referral from their friend’s institution.

You have the solution, use it!

Turns out, what Millennials and Gen Z are looking for isn’t such a tough code to crack after all. They’re following the same trend that we’ve been discussing for a while now: the shift from products and services to an experience that is appealing, engaging, and trustworthy. This demand will most likely only increase with time, so get on track and start updating your systems. How do your website and app look? Are they aesthetically pleasing? Do they follow the look of modern apps? Are they intuitive? What about your rewards? Are you trying something new and engaging your members in their financial well-being or are you merely tracking how many times they swipe a card? Are your referrals simple and fast?

You can go to as many classrooms as you want or spend thousands of dollars on ads, but the same old marketing methods are not going to get you anywhere with the younger generations. You can’t simply toss a new coat of paint on what you already have, the system is changing. Start looking at how your credit union can change along with it. From branch designs, to app functionality, to rewards, and everything in between. Brainstorm on how you can create an altogether better and more engaging experience for members. You might just find that solves your generational crisis.


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