Amidst the economic disruption of the past few years, credit union membership in North America has continued to grow. Total membership increased from 136 million in 2020 to 147 million in 2022.

Yet these positive top-line numbers conceal a worrying trend: credit unions are failing to make inroads into younger demographics. The average age of a credit union member is now 54, compared to a median age of 38 in the population as a whole. 

This trajectory poses a growing threat to the future of credit unions. Gen Z is set to represent more than a quarter of the global workforce by 2025, with a disposable income estimated at $360 billion. If they continue to look elsewhere for financial services, credit unions could face a grim future.

To expand their membership into this emerging demographic, credit unions need to appeal to Gen Z’s core motivations — and community outreach could play a significant role. 

Read on below to find out how.

Why community outreach is key for credit union membership growth

“We believe in bricks and mortar in our communities. Just having that physical presence tells people, ‘they’re here, they’re part of the community’. That’s a competitive advantage.” ‍

— Blair Winger, CEO at Prairie Center Credit Union

Born between 1995 and 2012, Gen Z has never known a world without the web. Their status as digital natives shapes every aspect of their lives — including how they bank.

Gen Z’s preference for digital experiences goes a long way to explaining the challenges credit unions face in reaching them. Banks are spending twice as much on tech as credit unions, securing them a significant competitive advantage.

But while Gen Z values digital services, that’s not all they care about. Let’s look at some other defining characteristics:

• They lack trust in banking: Gen Z’s relationship with FSIs has been marked by the 2008 financial crisis, and only 33 percent trust traditional banks with their money.

• They still value a human touch: Despite their reputation, Gen Z still values in-person connections. Sixty-eight percent like to see branches in their neighborhoods and prefer face-to-face encounters when dealing with more complex financial issues.

• They put purpose first: Gen Z are idealists. They are committed to social change and willing to put their money where their mouth is. Eighty-five percent of Gen Z investors would accept lower returns in exchange for a more ethical portfolio.

Taken together, these characteristics suggest credit unions may have a natural advantage in appealing to Gen Z.

The credit union movement is defined by a cooperative, community-focused approach that puts people before profit. It’s the perfect fit for a generation seeking greater trust and purpose from their bank. And that’s why community outreach could play a key role in attracting younger members.

Let’s look more closely at how this can work in practice.

How to strengthen your community outreach efforts

1. Understand your members’ needs

Community outreach is a broad term. It extends from financial literacy programs and community development loans to sponsorship of local projects and support services.

So, your first step is to decide where and how to focus your efforts. That means understanding the needs of your local community — including, of course, its youngest members.

There are various ways to do this, including:

• Conducting member surveys
• Partnering with local community groups
• Engaging your employees

Once you’ve gathered your data, look at areas of overlap across diverse groups. Trying to attract a younger audience doesn’t mean ignoring the needs of your older members.

Yes, issues like financial literacy appeal to Gen Z. But in a time of economic uncertainty, the appeal will likely be far broader.

2. Connect your goals

Effective community outreach shouldn’t just align with your community’s needs — it should also match your internal goals. And we’re not just talking about hitting your membership growth targets. It’s about a broader vision of how your organization fits into the evolving landscape of financial services.

Digital transformation is a key example here. Expanding your digital capabilities is vital to meeting your customers’ changing expectations, especially those of Gen Z. But it can also intersect with your community outreach efforts. For instance, supporting digital literacy efforts in your local area can help increase uptake for your new digital services. By the same token, your digital capabilities can widen access to your outreach efforts by enabling virtual events or app-based educational content.

3. Articulate your purpose

“Trying to emulate the banks and do everything they do on a smaller scale, I think that's a losing proposition. I think we have to recognize the fact that, because we're community-focused, because we're giving back to the communities, we have to highlight this as well. And I think there is a component of our membership that really values that.” ‍

— Kelly Scott, VP of Information Technology, Sunrise Credit Union

Community programs won’t expand your membership base if you’re not willing to shout about them. That means articulating a clear and coherent vision of what you stand for and how your community outreach efforts fit in. Put otherwise, you need a purpose. This term has become ubiquitous over the past decade, and that’s because it captures something essential. Customers now expect a company to have a clear vision, a sense of its value, and what it hopes to achieve — and this expectation is particularly strong for Gen Z.

Your purpose should shape the specifics of your brand identity, including how you frame your community outreach efforts. By documenting and presenting your programs coherently, you’ll be well-placed to appeal to a generation that believes companies should be active on social issues.

4. Find the right partners

Expanding your community outreach will require a substantial commitment of resources. But it’s important to remember that you don’t need to go it alone. In fact, a collaborative approach is essential to making a real impact. 

In the first instance, that means working with partners in your local communities. By drawing on local organizations' existing knowledge and expertise, you can ensure that your outreach efforts are well-targeted and properly delivered.

But this also extends to your other partnerships. If you’re working with digital transformation or service design experts, they can help shape the delivery of your community projects. For instance, improved data analytics capabilities can give you a clearer picture of your members’ needs. This can then feed back into your choice of outreach projects.

Future-proof your membership growth with Modes

As Gen Z reaches adulthood, FSIs are under increasing pressure to meet their expectations. For credit unions, in particular, finding ways to appeal to this digitally driven age group is essential to continued growth.

Expanding your community outreach efforts is a vital step in this direction. But, it needs to be aligned with a broader strategy for building your digital capabilities and developing innovative services.

At Modes, we’re the change experts. Through our partnerships with FSIs at all scales, we’ve helped deliver digital transformations tailored to their specific needs. If you’d like to learn more about how we can help you, connect with us today.