What Younger Generations Want From Their Lenders


Welcome to 2024: where technology is taking over, instant gratification is in, and waiting for anything is out. We used to hear about millennials, but now we are in the era of Gen Z and (can you believe it) Gen Alpha!

With the younger generations becoming old enough to make lifestyle decisions, we see the classic lending that millennials or older are used to becoming “so yesterday.” Does your credit union and lending team understand the tendencies of these generations? What are you doing to keep up?

To help, let’s cover some of the lifestyle trends influencing younger generations’ spending and lending habits and what your credit union can do to stay relevant.

In-person or online?

While some of us enjoy the good old face-to-face experience at your brick-and-mortar credit union location, we are seeing a greater push to improve online tools and websites. Your online tools are like the Facebook or Instagram profile for your borrowers to check you out. They will judge how “in” you are by how techy your website is and how much your online tool suite talks with your core. What are your online resources saying about your credit union?

Now let’s look at the reasons why these generations prefer online vs in-person experiences:

Time: Taking a few minutes to fill out an application online versus taking possibly hours out of their day to drive to their local credit union, sit down with the officer, and then drive back.

Convenience: The younger generations are always on the go and prefer the quickest and easiest ways to get something done.

Lifestyle: Being on your phone or on your tablet is simply a lifestyle nowadays. Apps control everything. You can have food delivered to your door, order clothes, listen to your favorite music on the app, control your TV remote, translate languages, and send and receive money all through apps. Apps can do it ALL. That is what this world is used to, and that’s what we need to provide!

Connections are just different now: With advancements in technology and social media, face-to-face connections are no longer seen as a necessity. People meet their soul mates online—without ever even meeting the person before calling it love. So what makes us think those same people would feel the need to chat with someone approving their auto loan in person?

Spending habits

Social media brings a different level of pressure to someone’s everyday life. You have the cleaning-obsessed inspiration videos, organization pro advisers, makeup perfection advertisers, clothing enthusiasts, chefs touting meals in 30 minutes or less, workout buff motivators, get the next big thing bling creators, and of course your foodies.

They all have different areas of interest, but there is a common theme: this product will make you look this way, feel this way, or become part of this lifestyle. Not to mention, they almost all have links to the products they are showcasing right on their page.

This day and age comes with all this pressure to live and look a certain way, and it doesn’t look like that pressure will die down anytime soon. So when a first-time borrower wants to finance a cool $60,000 truck that they saw someone else driving, are you finding a way to approve that loan? Or are you denying it? If you’re not approving it, is someone else?

I’m not going to act like Keeping Up with The Jones’ is only a thing of today or of this newest generation, but the technology that makes that type of spending less of a well thought out response versus more of an impulsive reaction? That absolutely is a thing of today.

“Add to cart” has never been easier or more at the tip of our fingers. But after “add to cart” comes, how they’re going to pay for it? Have any of you readers noticed the increase in the “Buy Now, Pay Later” or “Pay Overtime” options next to your order total or in your transaction history on a credit card? And no credit pull to go with it? Sounds as easy and hassle-free as “Click. Click. Done!” What are you doing to provide that convenience in lending for your members?

Two years of tax returns, please!

Self-employed borrowers, influencers, driving service employed borrowers… are they loan officers’ worst nightmare?

Loan Officer: “Your W-2 shows you make $60k a year, which brings your DTI to 48% and outside of our guidelines. Do you have any additional income I can use to help you qualify for this loan?”

Potential Borrower: “Well, I do Uber on the side.”

Loan Officer: “Great, I’ll need two years of tax returns to be able to include that as income please!”

I’m not sure about you, but I loathed using those words in my lending days. What if they don’t have two years under their belt of doing that work, but it is legitimate income and would help them qualify for that loan? Does the level of risk you would be taking really justify the number of things you are asking that borrower for?

Other competitors are figuring out a way to count this for income for borrowers, so what are you doing to stay flexible with your non-traditional income borrowers?

Automated assistance

I did not feel like cooking the other night, so I called a nearby pizza chain. After the first ring, I got their phone bot. I was immediately looking at my phone to press “1” to speak with a live person at the location until I heard the bot say I could get a discount if I proceeded to place my order through it. I figured I could deal with the potential kinks in my order if it meant I could save a couple of bucks.

To my surprise, the ordering was quite smooth and had zero mistakes. I didn’t have to wait on hold for someone at the location to pick up or be placed on hold again as soon as they did pick up, and I was able to cut right to the chase without sacrificing any quality in my order. I was thrilled and even ordered through the phone bot two more times since then. A discount and easy, wait-free service? I’m in.

What incentive are you offering your members to use your online or automated tools? Are you working with an automated decision model that can give the same quality results without the wait? Or are you using the same static underwriting processes you’ve always used?

What you already know

Let’s say you didn’t approve that $60,000 auto loan for that first-time borrower I mentioned earlier because they just really needed to build credit. In fact, you have a lot of first-time borrowers that need to build credit. What better way to help them do that than thoughtfully send out pre-approved $500 credit card offers via their online banking that they can instantly accept?

Or maybe you do a lot of indirect lending, but you want more than just that one loan. What data do you already have access to on your core to know where they shop, where their monthly payments are going, or who else are they borrowing from? Use that information you have to help implement a strategy that could make them a full relationship member.

Credit unions pride themselves on knowing their members, having strong relationships with their members, and not letting their members be just a number. It’s the credit union difference! So be mindful of making your marketing and lending efforts less about filling their inbox and use what you already know about your members to make it personal for them. Just like how TikTok knows to show me videos with products I can use to spoil my dogs—because it’s what I love to do. Some call it creepy, but is it actually genius?

The enemy of progress

“Well, we’ve always done it that way.” But do you know the “why” behind the way you do it? Do your lending processes and procedures still make sense in today’s world and for the new lifestyle generations? Think about why you’re still creating that report manually on an Excel sheet when you have access to all that data and probably a handy way to extract it from your core too.

“I don’t fix it if it’s not broken!” Maybe it’s not broken, but it could be leaking, and you keep putting dollar store scotch tape over it in an effort to keep the water out. Don’t be afraid to tear it down and start over before it breaks, because a yellow light does eventually turn red.

This world and these generations are moving at the speed of light, so don’t let your mindset be the enemy of progress.

Don’t get left behind

Knowing the habits and lifestyle trends of younger generations, how they are influenced, and what pain points they will want to avoid will help your credit union better connect with them and meet their needs. Don’t wait until your credit union is falling behind to catch up with the times.


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