The financial services landscape is evolving rapidly, and so are customer expectations. Millennials, Gen Z, and even Gen Alpha are reshaping how banks and credit unions must think about their role in the marketplace. These younger generations are digital natives who approach financial decisions much like retail purchases; they want speed, convenience, and personalization.
And their buying power is significant. According to research from NielsonIQ, Gfk and World Data Lab, Generation Z is the largest generation on earth, with spending power expected to grow to $12 trillion by 2030.
For financial institutions, it means the old branch model no longer suffices as the sole method of connecting with customers. To win the loyalty of tomorrow’s customers, banks and credit unions need to rethink how they blend digital experiences with physical presence.
James Robert Lay, founder and CEO of Digital Growth Institute, believes that understanding Gen Z’s relationship with money requires a deeper look beyond dollars and cents.
“This generation is growing up in a world of uncertainty,” he explained. “They’re not just looking for financial products, they’re searching for guidance, reassurance, and a sense of purpose in how they manage money.”
Understanding Where the Younger Generations Is
Today’s consumers are conditioned by retail and e-commerce leaders. They expect the ability to compare options quickly, move seamlessly from digital to in-person, and receive personalized service. For banking, that translates into customer journeys that are intuitive, simple, and centered around their needs, not the institution’s processes.
“It’s about meeting them where they are,” said Carolyn Ridout, VP of marketing for Education First Credit Union in Beaumont, Texas.
To achieve that meeting point, Education First, which services 32,000 members across 14 counties, has introduced multiple digital-based products including issuing digital debit/credit cards and the ability to seamlessly switch accounts from another institution from their phone.
Loyalty no longer comes just from products. It’s built on experience. A financial institution that feels cumbersome or outdated will lose ground to one that mirrors the streamlined, customer-centric approach found in retail.
Social media isn’t just a marketing tool, it’s a mirror into how Gen Z thinks, feels, and learns about money, explained Lay.
“Their two most trusted sources for financial information today are Reddit and YouTube. That tells us something powerful: they value real conversations and relatable experiences over polished promotions,” said Lay. “For financial brands, success will come from showing up where they are and building trust through authenticity and empathy.”
Lay also pointed to the rise of the sole entrepreneur among younger generations and how it is redefining how they view work, money, and stability.
“The old gig economy was built on short-term opportunity, but today’s uncertainty has driven people to seek greater control and purpose,” said Lay. “And that is changing how they interact with financial institutions.”
Creating Hybrid Digital-Physical Experiences
Despite predictions of the “death of the branch,” physical banking locations remain essential. What has changed is their role. Today, branches must be designed as extensions of digital platforms, allowing customers to start online and finish in person, or the reverse.
At Education First, Ridout said they are deploying smart agent technology for day-to-day transactions and have replaced their ATMs with interactive teller machines (ITMs).
“It’s an exciting time for the industry to ramp up and meet the opportunities to serve the needs of the next generation of customers,” said Amy Tullos, vice president of branches for Nuvision Credit Union.
Tullos said it’s important to create a seamless experience for the credit union’s younger customers – 21 percent of Nuvision’s 213,000 customers are under the age of 34 – whether it is for their everyday financial transactions or seeking an auto loan or mortgage.
From self-service ITM kiosks to digital appointment scheduling, branches must work in tandem with apps and websites.
“We don’t want to force them one way or another but instead provide them with choices that work for them,” added Tullos, who said Nuvision’s goal is to have 8 percent of loans completed unassisted through its digital platform.
Rethinking Branch Design for Engagement
The next generation is not looking for a place to stand in line. They’re looking for a place to be supported, educated, and connected. That requires moving beyond transactional counters and toward open, retail-inspired spaces.
Education First’s Ridout said they have moved away from teller counters and toward an open floor plan design, but members have comfort in knowing they can always talk with someone face-to-face if needed.
Branches designed with flexible layouts can support both advisory conversations and community events. Comfortable, tech-enabled environments send a clear message: this institution is innovative, approachable, and ready to meet customers on their terms.
Nuvision Credit Union, which has a large geographic footprint serving members in Alaska, Arizona, California, Washington and Wyoming, said adding ITMs in its branches helps employees be more efficient and allow them to spend more time having deeper conversations with members.
“We consistently engage with our members to find out what their needs are and how can we deliver on them,” said Tullos.
Financial Coaching and Community Presence
A survey conducted by Payroll.org revealed that 78 percent of Americans live paycheck to paycheck. In other words, more than three-quarters of Americans struggle to save or invest after covering their monthly expenses.
This reality underscores the vital need for financial education, and community-based financial institutions are well positioned to serve as hubs for financial workshops, one-on-one coaching, and interactive learning.
Ridout and Tullos both agree that the next generation of members is eager for tools and information to help them build strong financial habits. Both organizations are active in their communities, offering educational seminars on topics ranging from building good credit and proper budgeting to understanding the importance of participating in 401(k) savings plans.
“There is so much that the next generation is not being taught on financial best practices, and we are in a position to positively change that,” said Ridout.
Education First Credit Union’s scholarship program awards 10 $2,500 scholarships each year, but its impact goes far beyond financial support. The online application process requires students to complete a series of short lessons on essential financial topics such as saving, building credit, and developing good money habits. This ensures that every applicant, whether or not they receive a scholarship, walks away with valuable financial knowledge to help them build a stronger future.
Financial institutions that lean into community visibility and engagement demonstrate that they are more than a transaction, become trusted partners in local life.
Nuvision’s Tullos added that even digital-first generations value in-person connections and that’s why being active and visible in the community through educational and community events is important.
“We have many multi-generational members and showing we are invested in the community resonates across the generations,” said Tullos.
Lay emphasizes that financial coaching isn’t simply about teaching budgeting or saving; it’s about helping individuals understand why they make financial choices.
“Behavior is rooted in belief,” he said. “When we help people uncover the emotions and values behind their financial decisions, that’s when true transformation begins.”
Even as artificial intelligence transforms the banking landscape, Lay cautions against losing sight of the human connection.
“Technology can scale access to financial education, but it can’t replace empathy,” Lay noted. “People often fall into financial trouble because of behaviors, not a lack of information. The opportunity for banks is to blend digital innovation with genuine human connection because that’s where trust and real growth happen.”
The Bottom Line
The next generation of banking customers is not waiting for institutions to catch up. They are making decisions today based on which providers feel most aligned with their lifestyle.
They prioritize ease of access and are turned off by long account opening processes, confusing forms, or outdated processes that do not grant them immediate results or answers. They expect safe, secure transactions that are also fast and simple.
“The world doesn’t operate like it did 20 years ago, and neither can our financial institutions,” said Lay. “To stay relevant, banks and credit unions must let go of outdated habits and embrace new ways of thinking, working, and growing.”
Banks and credit unions that think like retailers prioritizing customer experience, blending digital and physical seamlessly, and staying deeply connected to their communities, will be the ones that thrive.
For more information on this article or to learn more about FSI’s branch expansion and transformation program for your financial institution, contact us. We are looking forward to helping you reach and connect with the next generation.
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