Gen Z is poised to become the most powerful force in consumer finance in the coming years, but credit unions risk missing out if they can’t adapt because that generation does its banking differently.
That was the finding of a July report by PYMNTS Intelligence data, which concluded that only about 14% of Gen Zers ages 18 to 28 said a credit union is their primary financial institution. Yet they’re more than twice as likely as others to consider leaving their credit union, often for a traditional bank or a digital bank, the report found. More than a third say they may switch in the next year.
And 1 in 3 Gen Zers who aren’t credit union members don’t even know they’re eligible to join, according to a 2024 Apiture and The Harris Poll.
The bottom line? Gen Z is prioritizing digital convenience and credit unions need to catch up.
Now, credit unions face growing pressure to adapt to stay relevant with a younger, digitally native generation.
Frederick Reinhardt, CEO and president of Greenwood Credit Union, the third-largest credit union in Rhode Island with more than 62,900 members, says he sees how Gen Z banks differently from previous generations.
“Many younger people don’t use ATMs. They barely use cash. And many don’t even want to swipe a card. They’d rather pay with their phone or with a tap,” Reinhardt said. “It’s about staying relevant with younger banking clients. And it’s important for us to do that.”
Travis Escobar, founder and executive director of The Millennial Professional Group of Rhode Island – otherwise known as Millennial RI – which tracks generational financial trends, said Gen Z is “rewriting the rules of money.”
“They’re mobile first and always on,” Escobar said. “Gen Z is entering their prime earning and borrowing years, and the institutions that meet them now can build loyalty that lasts decades.”
That loyalty could pay off in a big way, data shows. There’s an estimated 164,000 Rhode Island residents between the ages of 18 and 28, per U.S. Census data. And nationally, Gen Z’s collective purchasing power is projected to reach $12 trillion within the next five years, according to the PYMNTS report.
The group’s total assets are projected to reach $84 trillion by 2045, fueled largely by wealth transfers through inheritance.
In Rhode Island, credit unions serve more than 486,880 members, according to CreditUnionsOnline. While local data on Gen Z usage isn’t tracked, national numbers aren’t promising.
As of early 2025, only 23% of banking-age Gen Zers hold credit union memberships, according to PYMNTS.
Meanwhile, 36% of Gen Zers and millennials now use digital financial platforms such as Venmo, PayPal, Cash App, or Chime as their primary checking account, according to a 2024 Cornerstone Advisors analysis.
However, Escobar – whose Millennial RI, a Providence-based nonprofit, works to retain and empower young residents – says fintech tools still fall short when it comes to building long-term financial health.
“Venmo can help you split a dinner date with friends, and Cash App might let you buy a little Bitcoin,” Escobar said. “But neither helps you build credit, grow savings or prepare for your first home or car.”
That gap between digital convenience and long-term financial planning is where credit unions see opportunity – given their history of lower interest rates and flexible loans for first-time buyers of autos and homes.
Reinhardt says Greenwood CU has long offered financial products designed specifically for younger clients.
“More importantly, we also offer sound banking counsel,” he said. “Fintech like Venmo does not try and help younger people [with] their financial literacy. They are in the business of making money. Credit unions are in the business of helping members achieve their financial goals.”
Most credit unions in Rhode Island have focused much of their efforts on wooing the younger set with not only high-tech banking tools but products that address their needs, too.
Meg Sisco, Westerly Community Credit Union chief marketing officer and senior vice president of retail experience, says WCCU prioritizes financial education from an early age, offering in-school programs, literacy fairs and online tools to support members at every stage of life.
“We strive to help them during every life stage, starting out with first savings/checking accounts, to more adult needs – car loans, first homes, their children’s accounts, second homes, retirement planning and beyond,” she said.
The challenge is demonstrating that difference between member-focused credit unions and fintech platforms that offer convenience and not much else, Reinhardt says.
Navigant Credit Union is the largest in Rhode Island with 165,000 members. Michael Mattone, chief retail banking and experience officer, acknowledged that “technology is table stakes for Gen Z.” He says Navigant already has the technology that Gen Z would want.
Navigant offers integration with Apple Pay, Google Pay and Venmo, a personalized digital onboarding experience for new members, and provides a user-friendly mobile app with smart wallet and card controls.
But getting this message across hasn’t been an easy task for local credit unions, as the battle for Gen Z’s attention and business plays out on social media apps such as TikTok and Instagram, according to PYMNTS Intelligence.
Greenwood, Westerly and Navigant credit unions have modest followings on Facebook and Instagram. But none are active on TikTok – a key Gen Z platform used by 82% of Gen Z in the U.S., per the 2025 Sprout Social Index.
Mattone said growing and reaching those numbers is a “big part of [Navigant’s] marketing approach.”
“Gen Z is almost always on social media,” Mattone said. “We’ve got to meet them where they are, which is online.”
