Generation Z, people born after 1996, is the first digitally native generation. According to Zogo, a fintech startup with Gen Z founders and a CUNA Strategic Services alliance provider, that means the younger generation is naturally pulled toward the first digitally native medium of exchange: cryptocurrency.
Because Gen Z accounts for 32% of the global population and has a spending power of $143 billion, credit unions should offer cryptocurrency services in the next five years, says Andrew Cokenour, customer success associate for Zogo.
Credit unions can get involved by providing education, holding digital wallets, or offering trading. Opportunities are opening up, with NCUA announcing earlier this year that credit unions can partner with third-party cryptocurrency providers.
Third-party providers could be crucial for credit unions, as Gen Z consumers are more likely to use nonbanking apps or websites to invest, check their credit scores, or trade crypto.
“They don’t write checks anymore. They don’t go into branches. So, finding relevant ways to interact with them is extremely important,” says Zogo Vice President of Business Development Cameron McMillan, adding that it’s key to reach the younger generation through their cellphones. “Together, we must make Gen Z aware of credit unions and be fully equipped to meet their financial needs. Provide offerings Gen Z wants, where they want it, and when they want it.”
Cokenour suggests credit unions be intentional about getting into the space. The number of crypto users at year-end 2021 totaled more than 300 million, 58% of whom are under age 34.
Being intentional starts with credit union leaders determining whether their credit unions have the necessary knowledge to reach younger members via cryptocurrencies. If not, can they form partnerships to fill those knowledge gaps?
Then comes step No. 2: Delivering value via products geared to Gen Z.
Sixty-one percent of Gen Z and millennial consumers say they want their financial institution to provide crypto services.
Cokenour says young people are fascinated by crypto because they see it as the currency of the future, it’s secure when investing or spending, there are few fees, and they trust digital mediums.
Because cryptocurrencies are volatile assets, it’s important to educate people about the risks associated with crypto, Cokenour says.
Credit unions’ focus on member education and financial well-being for all makes credit unions a perfect fit for Gen Z, according to McMillan.
“We love credit union initiatives and their community impact,” he says. “Those are the same morals and values Gen Z has."
Cokenour and McMillan addressed the 2022 CUNA Digital Marketing School.