Gen Z Sees Credit Unions as Technologically Advanced and Profit-Driven. There’s an Identity Crisis Here.

Gen Z thinks your credit union has figured out technology. They think you’re profitable. They also think you’re basically just a lending shop. And they have no idea about the community work you’ve been doing for years.

That’s the disconnect Carrie Stapp, VP of Marketing at Velera, uncovered in recent research on Gen Z financial behavior. And it represents both a massive threat and an equally massive opportunity for credit unions.

The threat is real. Gen Z is 83% using mobile wallets multiple times a month. They expect financial services embedded in their daily life—not at campus booths or through direct mail. When buying a laptop, they expect to finance it at point of sale. When planning vacations with agentic AI, they expect to book and pay seamlessly. Most credit unions aren’t positioned for any of that.

The opportunity? Credit unions have trust and 70 years of community impact that fintechs can’t manufacture. But Gen Z doesn’t know about it. If they search online, they might find robberies and fraud instead of your community work.

That’s not a technology problem. That’s a storytelling problem.

Carrie walks through the research findings with Sarah Snell Cooke, host and founder/CEO of The Credit Union Connection, and the implications are stark. Credit unions aren’t losing Gen Z because they lack products. They’re losing Gen Z because they’re not searchable, not discoverable and not showing up where younger generations live.

The good news? Credit unions can simply to flip the business model: stop waiting for Gen Z to come looking for you. Go looking for them. Be there in the moment. Tell your story before someone else does.

The window is open, but it won’t stay open forever.

Listen to the full conversation to hear why Gen Z’s perception of credit unions is backward and what credit unions need to do right now to close the gap.

Sarah Snell Cooke: Hello, and welcome everyone. I am, of course, Sarah Snell Cooke, your host here at The Credit Union Connection. I’m joined today by Carrie Stapp. Welcome.

Carrie Stapp: Thank you. Thank you for having me.

Sarah Snell Cooke: Oh, thank you for your time. I appreciate it, ’cause you are Velera’s vice president of marketing.

Carrie Stapp: Yes.

Sarah Snell Cooke: Why don’t you do a little bit more introduction of yourself and the company?

Carrie Stapp: So Velera, as many folks know, we’re dedicated to the credit union industry. We’re one of the largest and premier CUSOs for the credit union industry, focused primarily on payments, fintech evolution, fintech technology, but really dedicated to building with and for our credit unions, and so that makes us a little bit unique in this space.

My role within the company, as you said, is vice president of marketing. But as part of that role, I work on integrated marketing and messaging, which allows me to really dive into industry insights, consumer research, regulatory research, all of the things that we need to combine with the products and solutions that we provide to our credit unions and then to their members. And so really understanding what’s the momentum going on out in the world, I get to bring all of those insights into messaging and understanding and turn it into thought leadership so that not only Velera benefits from it in our product development and service development, but that our credit unions get to benefit from all of that work and all of that insight as well.

Sarah Snell Cooke: Yeah, and so that’s why I reached out to you about doing this interview. You guys recently did a report on Gen Z and how credit unions can better serve them, which everybody wants to know. Yeah. Everybody wants to know everything. You’ll be much richer after this, I am sure. So Gen Z, just to kind of set parameters, is born in ’97 to 2012, so they’re between 29 and 14 years old. And so the top financial goals that you’ve found of theirs were basically being financially independent and financially stable, which I don’t think my kids at 14 would’ve said. But it is a wide range of ages in there, and life stages. Have we scared this into them, like talking about it more now in particular? But yeah, I guess, what are the younger ones… I mean, glad they’re thinking about it, but why is this happening?

Carrie Stapp: So you have to really back up and think about their purview and the way that any generation grows up and the experiences that they have, that they hear their families having, that they’re learning about in school, that they’re hearing about on the news, really does shape where they are in their own mindset, their own goals. As most kids do, let’s say, is I wanna be better, I wanna be different than what my parents were. And so what Gen Z is really… they’ve grown up with some interesting times with the crash of 2008, all the things that have happened with the economy, especially what’s going on right now in the economy as a lot of these folks are coming of age. In addition to that, you throw in COVID, which has dramatically changed the way that consumers across the board are buying and purchasing goods.

There’s really two more realms here that affect them, which is the technology boom. This is really the first generation that is technology native and where technology is inherent for them. They don’t remember growing up without phones. They don’t remember life without all of this technology. And they have everybody’s lives in front of them 24 hours a day. They’re 24 hours a day connected to the headlines, they’re 24 hours a day connected to their peers, and they’re 24 hours a day connected to the social pressures that older generations had the ability to sort of close the door at night and start the day anew.

And so it’s really a unique combination, I would say, for this generation, and for them to really be rising up and saying, “There are certain things that I wanna focus on.” They’re very concerned about the quality of their life, not being a part of, if you will, the rat race. They want experiences, they want ease, and they want to be self-sufficient and become independent of their financial lives. And so a lot of that is creeping over into the way that they’re buying goods and services: Who’s gonna help me be independent at meeting the goals that I wanna meet? And I don’t wanna be beholden to some of the same things that my parents were beholden to when it comes to debt, not being certain about the future of their retirement or being able to afford the basics in life.

Sarah Snell Cooke: I definitely see that. Definitely see that with kids, for sure. And so, we all have with your iPhone or whatever type of phone you have, these mobile wallets that are in there holding all your credit cards if you decide to put them in there, debit cards, what have you, or concert tickets even. And 83% of Gen Z and younger millennials, your research found, are using these at least a few times a month. Are credit unions in their wallets? How do they get in their wallets and become their first choice, you know?

Carrie Stapp: I think what’s really emerging and what we saw really heavily in the research and in… So it’s interesting. I wanna back up just a second to say that we did quantitative research to do a wide variety, 2,000 Gen Z, a wide variety of demographics. But we also did a qualitative study where we were actually asking Gen Z individuals to go out and record the way that they live their lives in certain days, do certain tasks for us and show them how you’re doing it. And so, really being able to see the way that things like AI are coming into play in their lives, the way that they’re purchasing goods, the way that they go about their daily life, is completely different.

And so your question to me was, are credit unions offering these products and solutions? And I would tell you, yes, they’re starting to offer these products and solutions. What I would tell you is that the way that we offer these products and solutions can’t stop with this generation at just offering the product and solution and saying, “Well, I have a P2P solution, aren’t you gonna use it? We have mobile wallets, aren’t you gonna use it?” You really have to sort of turn your brand and turn all of that on its head and say, it’s not enough to just offer the product and solution. How am I gonna embed that solution into the daily life of my member and of this younger generation? And so when you think about the way that a Gen Z-er may be shopping for something, and doing a lot of, let me say, persona building, not just around Gen Z, but around a lot of different things… and we’ve been creating personas, and we were talking through a Gen Z persona and using different scenarios of let’s imagine that we have a Gen Z-er who just went to college, as an example, and finds himself needing to buy a new computer.

And we were talking about, well, how would the credit union be sure that they’re in front of them? And it was interesting because we started talking about what I would say sort of antiquated ways to get in front of them. Given that I have kids of this age, I’m like, “My kids are never gonna do any of those things.” Well, you set a booth up on campus, and then we have the ability to process an application if they wanna do a credit card right then. And I’m like, yeah, they’re probably gonna be figuring out how they’re gonna finance that at point of sale checkout, when they check out from the retailer of where they’re purchasing it. That may be purchasing it within social media. We’re seeing social media pop up for the first time in the top five most important tools that they’re using for financial advice. Yeah. And so it becomes really interesting when you think about some of the definitions of things that we’ve had longstanding, like the term embedded. Well, what does the term embedded really mean to this generation, and are we evolving our definition so that those types of products like a digital wallet don’t just sit on the shelf?

Sarah Snell Cooke: Right. Yes. That’s a perfect example I’m sure of: it’s not just build it and they will come.

Carrie Stapp: Right. Right.

Sarah Snell Cooke: And so the report also makes a good point that it’s not just any one product, it’s all of them. I mean, you wanna own the daily, and debit cards, what have you, are the daily, Apple Pay. But it’s the entire ecosystem of products that need to be, and the overall experience that need to be on point. So talk a little bit more about that.

Carrie Stapp: Yeah. What we’re seeing is, not to go crazy futuristic or into some sort of scary world, but just really having the understanding and the vision of where things are moving in terms of consumerism. And so we’re starting to see agentic AI and all of these things popping up, and we can easily sit there and go, “Well, I’m not quite sure what that’s gonna look like in the age of financial services.” And I just had one of my employees the other day say, “Well, I planned my entire family vacation using agentic AI.” And so when you think about… I’m a younger demographic—I’m not, but I’m saying if I were a younger demographic—and I decide I’m gonna use this to plan my itinerary, I like that itinerary, boy, wouldn’t that be great if I could just go ahead and purchase it right then? Well, that’s what the fintechs are trying to figure out.

And so being there in the daily is incredibly important. If we still have credit unions sitting out there saying, “Yeah, I’m not sure where payments really fits, we’re really more of a lending shop,” then those are the ones that need to really, really, really be paying attention to what we’re saying, because you’re probably already behind. But the movement now is, how are you going to be there in the moment? And are you searchable? Are you available? So I think that really understanding where that future is going and how financial services is going to evolve and its role… Listen, when I was growing up and in the age demographic of Gen Z, I didn’t really have a choice but to go to the bank to get cash out or write a check and make a payment at the branch. And so my financial life, my consumer life really revolved around that branch of that credit union, that bank, what have you.

That isn’t the case today. So what the reverse now is, is that we are fighting not just to stand out as a brand and get them to choose us, but to even be showing up as an option for them where they are. Because they’re not coming and looking for us, they’re expecting us to be looking for them and to be showing up where they are. And that is, I would tell you, probably again, when we talk about terms like embedded, we talk about terms like personalization, I would tell credit unions really make sure that your definition of these things are the modern-day definition. The words aren’t changing of what we need to do, but the definition of those words are evolving, and we need to understand that.

Sarah Snell Cooke: Perfect. That runs right into my next question about embedded finance and hyper-personalization. I mean, as you mentioned earlier, Gen Z wants everything easy, here and now, seamless. And so, like, embedded finance has become the new indirect lending. I mean, it is indirect lending for different things. Hyper-personalization, feeling understood, feeling like the institution knows who you are. But where is that creepy line? Can you talk a little bit about hyper-personalization and the need for it, but also keeping it toned down to where the member doesn’t feel uncomfortable maybe?

Carrie Stapp: Yeah. Here’s the thing that I find interesting in this topic, because I think it is a real topic. I also think that the younger generations are much more used to this, and it’s expected. Remember—and this has actually been five or six years ago—I was at work with some coworkers, and one of my colleagues was younger. And she made the comment that she was tired of getting XYZ ad pop up in her social media. And she said, “I’ve already bought that. Don’t they know that?” And I literally stopped in my tracks for a moment and thought, “Well, how entitled are we that we think that brand is gonna know?” But the point is, that’s the expectation.

Sarah Snell Cooke: Mm-hmm.

Carrie Stapp: And so, what I think about all of this is that I think there is creep out there. There is crossing the line out there, and I think that what we’re seeing in this research is that credit unions are extremely trusted, and the connection to community, and the connection to trusted partners. And so the ability to service their need of this hyper-personalization—and we’re not talking about just putting my name on a direct mail piece, we’re talking about serving things up that matter to me in the moment—if it’s from a trusted source, that’s what they want.

And so I think that there’s actually an opportunity and an obligation for credit unions to really get into this space and be that source of comfort, to know that these things can work without sinister behavior behind the scenes. And so I really find that to be an opportunity for credit unions in the space to utilize these amazing tools, and ensure that we’re utilizing them for the right way. We’re regulated to do so. We have the moral and ethical ground to do so, and I personally think it becomes a major benefit to our industry and that trust factor of folks that they’re gonna be able to walk in and see in their hometown.

Sarah Snell Cooke: Right. Right. Yeah. And again, kind of getting back to the definitions are changing. Trust, I mean, trusting that you are there, but also trusting you’re there at that time, and trusting you can make the transaction at the time. I think it’s all really cool. And then at the same time, I’m not gonna make any assumptions about you, but as a Gen X-er, more than half of us—that’s what your report said too—more than half of us are using those kinds of things anyway.

Carrie Stapp: I mean, obviously the nature of what it is that I do, I’m maybe more savvy than the average. I don’t know, maybe I’m not. But really, my understanding comes more from just watching my kids and trying to figure out… I’ve got a 25 and a 23 and a 20-year-old, and so I’m just watching them, going… They don’t even realize I do it, but I watch the way that they buy. I watch the way that they do things. Because it’s not just about that moment. It’s about how is financial services evolving, because let’s be real, the other thing that’s happening for them is they aren’t being taught a lot of these things in school anymore. Nope. When we were going through school, we were being taught how to write a check and how to balance a checkbook, and a lot of those things have really just disappeared from it.

And so the other piece of this is really being that trusted advisor on: How do I set up a financial plan? How do I set goals, and how do I know if I’m meeting those goals? That is incredibly important to this younger generation, and they like that gamification of knowing, “Hey, I’m meeting my goals. I’m on track.” Helping them make good financial decisions. And again, they can find tools all over the internet to help them with these things, but if they can do it with their trusted financial provider, then it just makes you that much more valuable.

Sarah Snell Cooke: Absolutely, and when your app isn’t up to snuff, they’ll let you know too, ’cause they’ll…

Carrie Stapp: Walk.

Sarah Snell Cooke: That’s for sure. That’s for sure. That experience is more important than your rates or anything else at this point.

Carrie Stapp: Yeah, funny. A quick story: My 25-year-old son, he’s about to get married, and he’s like, “Mom, I built this whole spreadsheet on where my spending is, how much I need to be saving, and all of these things in order to maintain what my financial goals are.” And it had all these different equations and all these things built into it, and I’m like, “You’ve gotta be kidding me.” You know, I’m just over here, like, just balancing my checkbook, like, “Yep, I still got money.” So, they’re really, really super sophisticated. And they have that expectation, and they wanna partner with folks that can help them do that. But the other piece of it is they don’t know, “Am I on track?” Because there’s so much comparison. They’re watching their peers appear to be in this great shape, and maybe they are, maybe they aren’t. And what’s the definition of doing well, and what can I trust?

Sarah Snell Cooke: Yeah, the Instagram life isn’t reality.

Carrie Stapp: Yeah, exactly.

Sarah Snell Cooke: No, for sure. Kind of getting back to the trust, the brand consistency in digital and really everywhere is so important because there’s this balancing act of risk versus this seamless experience that Gen Z and some of us older people want. You can really see the results in your research as well because Gen Z, which I thought was interesting, sees credit unions as technologically advanced as well, and understanding them as a member. But they know little about the work that credit unions do in the community.

Carrie Stapp: It’s really true. The identity crisis that credit unions are really going through with these younger generations is really apparent from this research. I thought it was really interesting that they saw them as more technologically advanced than what the older generation saw them, but they also saw them as being more profit-driven. And that would technically be the exact backward scenario. Sure. And so again, I think that there’s a real opportunity.

This generation really buys into meaning in the companies that they’re doing business with; they wanna do business with companies that stand for something and that are doing good things in their community or for the environment. Again, the opportunity that sits out there for credit unions on the merits that have been with us for all of these years are probably stronger now, but we’ve just sort of been sitting back on those things and making an assumption that these younger generations know, and they really, really don’t. Yeah, I’ve actually had one of my sons say to me, “Well, don’t credit unions just do loans?” It’s like a credit union. And so, they don’t know. But it’s quite interesting, and it’s so opportunistic. I just think we’re in a really high time of opportunity.

Sarah Snell Cooke: Yeah, for sure. And just kind of carrying that over to real life, I was doing a project where I was researching these 36 credit unions that we knew did community work, did a lot of work in their communities. But in researching them, six of them had nothing mentioned on their website, nothing mentioned in social media about their community impact work. And so when I Googled them, what came up was fraud and robberies. So that is part of controlling your brand as well as making sure, ’cause anybody can see that. That is scary.

Carrie Stapp: That is super scary that that’s what came up. And that digital footprint that you’re leaving behind, I think that that’s a really important point of how, when this younger generation goes out and searches, what’s gonna come up? And in the age of ChatGPT and agentic AI and all of the things, how are you going to be showing up? It’s really… we cannot underscore how important paying attention to that is. Having folks on your team that understand how to do these things and really paying attention to what that brand looks like.

Sarah Snell Cooke: Absolutely. Absolutely. So this has been a great discussion. I appreciate your time, Carrie. I always allow my guests to have the final thoughts. What would you like to leave our audience with?

Carrie Stapp: Well, I think the thing I would like to leave our audience with is that—I’ve said it five times already, but—there’s no need for credit unions to feel discouraged in this very exciting age. We have a lot of legacy that is super beneficial, and we need to be touting that much more. At the same time, those values alone aren’t gonna be enough. You have to have the technological advancement, and you have to be discoverable to a younger generation that isn’t out there searching for you. You need to be out there searching for them.

And so if you can flip your business model, start thinking about, “How am I doing that? Where am I showing up?” And I think that if you aren’t in the payments game and you aren’t doubling down on making sure that you’re engaged with every single member and your ability to grow your membership through that daily engagement, I would highly suggest that you reevaluate your strategic plan and make sure it’s included.

Sarah Snell Cooke: Awesome. Thank you so much. I appreciate your time today.

Carrie Stapp: Thank you. Great conversation.