The battle for Gen Z: How to compete with banks and win
In an increasingly competitive financial services landscape, credit unions in the United States face the challenge of attracting and retaining younger members. Gen Z or “Zoomers”, a demographic born between 1997 and 2012, currently represents the forefront of young potential new members. They are digital natives with different expectations and behaviors than previous generations, making traditional marketing approaches less effective. To tap into this valuable market, credit unions must adopt innovative strategies that capture Gen Z’s attention.
One of the most effective tactics is embedding marketing programs directly onto college campuses, following the lead of major financial institutions like Wells Fargo, Fidelity, and BMO Harris. In doing so, credit unions can build brand awareness, foster trust, and establish long-term relationships with Gen Z. College presents a unique opportunity to tap into a captive audience for 2-4 years.
Understanding Gen Z: What drives their financial decisions?
Before diving into different strategies for marketing to Gen Z, it’s crucial to understand what drives their financial decisions. Gen Z has grown up in a world of economic uncertainty, including the 2008 financial crisis and, more recently, the COVID-19 pandemic. This has made them more cautious about their financial decisions, with a strong preference for stability and security. Unlike millennials, who have been characterized as more experience-oriented, Gen Z is often more focused on financial wellness and security.
Furthermore, Gen Z values authenticity and social responsibility. They can be highly skeptical of traditional advertising and prefer brands that demonstrate genuine commitment to ethical practices and social causes. Digital proficiency is another hallmark of this generation. They expect seamless, tech-driven experiences and are likely to engage with brands that offer convenient, mobile-first solutions.
Ostrich’s data, gathered while working with 18,000 college students across 20 different universities, shows that a vast majority of these Zoomers are very aware that they should be setting themselves up for financial success as early as possible. However, almost all of this group feels overwhelmed when they try to understand what steps to take to improve their finances, resulting in inaction. Making it as easy as possible to take positive steps in improving their finances is one of the keys to attracting Zoomers as new members.
The advantage of embedded marketing programs
Embedded marketing programs on college campuses have proven to be a powerful tool for financial institutions to engage with students. These programs often involve partnerships with universities to offer financial services directly to students. This can be through on-campus branches, but also includes engagement through events and digital platforms. Institutions like Wells Fargo, Fidelity, and BMO Harris have effectively used these programs to build strong relationships with young consumers early in their financial journeys, converting up to 50% of students on campuses to customers!
- Building trust through daily presence
One of the key benefits of embedded marketing is the ability to build trust by showing up as part of day-to-day life over the course of a four year period. College campuses offer a unique environment where students are more likely to engage with brands that are embedded into their lives. On campus branches are the gold standard, but not the be-all end-all. Other opportunities include partnering directly with the school to sponsor events, sports teams, school initiatives, or working with third party school partners to become an integral part of school life. This direct interaction can be particularly effective for credit unions, which are often perceived as more community-focused and member-oriented than large banks.
- Offering financial education
Another significant advantage of embedded marketing programs is the ability to offer financial education tailored to the needs of students. Gen Z is highly receptive to educational content, especially when it comes to managing their finances. Credit unions can differentiate themselves by offering workshops, seminars, and online resources that help students develop healthy financial habits. For instance, a credit union could partner with a university’s financial aid office to offer budgeting workshops during orientation week, or create a series of online courses about managing student loans and credit.
These educational initiatives not only position your credit union as a trusted advisor but also help address a critical need among students. Many Zoomers enter college with limited financial literacy, making them more susceptible to poor financial choices. By providing valuable educational content, credit unions can build loyalty and encourage students to choose them over competitors.
- Leveraging digital platforms
While physical presence is important, it must be complemented by a robust digital strategy. Gen Z expects financial services to be accessible through their smartphones and laptops, and they are likely to engage with brands that offer seamless digital experiences. Embedded marketing programs should include digital touchpoints that make it easy for students to access services and manage their accounts online.
For example, credit unions can offer features in their mobile apps tailored to student needs, such as budgeting tools, savings challenges, and personalized financial advice. A particularly valuable feature to this demographic is the ability to easily make peer-to-peer payments through Zelle. These apps can be promoted through on-campus events, social media, and partnerships with student organizations.
Additionally, credit unions can leverage digital marketing campaigns targeted at students, such as offering sign-up bonuses for opening an account, referring a friend, or doing a digital giveaway. Promotions should be embedded within campus life as benefits for students who are credit union members through discounts at students’ favorite watering hole, local stores, or the campus store.
- Promoting social responsibility
Social responsibility is a major factor in Gen Z’s decision-making process. Credit unions, with their member-owned structure and community-focused mission, are well-positioned to appeal to this value. Embedded marketing programs on college campuses provide an ideal platform to promote the credit union’s commitment to social causes.
For instance, a credit union could partner with student organizations like a fraternity or sorority to sponsor volunteer activities, sustainability initiatives, or inclusion programs. These partnerships not only enhance the credit union’s visibility on campus but also align with the values of Gen Z, making the credit union more attractive. Additionally, credit unions should use digital platforms to highlight stories of impact, such as how they have supported local businesses, provided scholarships, or contributed to community development.
- Creating a sense of community
Finally, credit unions can leverage their embedded presence on college campuses to create a sense of community among students. Zoomers value belonging and are more likely to engage with brands that foster a sense of connection. Hosting events, sponsoring student clubs, and creating online communities where students can share tips, ask questions, and support each other in their financial journeys all add to the feeling of belonging.
For example, a credit union could host a monthly “financial wellness” event where students can gather to discuss money management topics, share experiences, and learn from guest speakers. These events could be promoted through campus media, social media, and partnerships with student organizations. By creating these opportunities for connection, credit unions build strong, lasting relationships with Gen Z members. In-person events are something that we’ve found to be particularly effective.
Conclusion
To successfully market to Gen Z, credit unions must move beyond traditional marketing approaches and embrace embedded marketing programs on college campuses. By building trust through an embedded, daily presence, offering valuable financial education, leveraging digital platforms, promoting social responsibility, and creating a sense of community, credit unions can establish themselves as the preferred financial partner for this emerging generation. As Gen Z continues to enter the workforce and make financial decisions, the credit unions that invest in these strategies will be well-positioned to thrive in the years to come.
Ostrich helps credit unions embed themselves into campus life at universities, colleges and trade schools of all shapes and sizes. Our unique approach converts 40% of students to open a new financial account at a partner institution. Head to our website or contact Andrew Holliday to learn more about how you can partner with Ostrich to reach Gen Z in your area today.
