Millennials and Generation Z are sometimes placed in the same boat. However, 22 years separate the oldest millennials from the youngest Gen Zers, making for significant differences between the generations’ needs, attitudes, and financial approach.

“Gen Z and millennials are two very different generations,” says Kantar Consulting Associate Director Graham Zimmerman, speaking during CUNA Mutual Group’s recent Discovery2022 virtual conference. “While they are experiencing market disruptions in similar ways, they are reacting and preparing in different ways.”

Millennials, born between 1979 and 1996, make up about 24% of the U.S. population, according to the 2021 U.S. Census. Born between 1997 and 2001, Gen Z accounts for 6% of the population and is what Zimmerman calls a “generational break unlike anything seen since Boomers in the 1960s.”

He says Gen Z grew up in “an era of diversity, disruption, and connectivity,” including the Sept. 11 attacks, the adoption of iPhones, technological advancements, social media, the global financial crisis, the elections of Barack Obama and Donald Trump, and the coronavirus pandemic. 

Those events have significantly impacted the generation’s values and caused them to expect continued disruption throughout their lives.

Gen Z ranks mental health, war, housing costs, inflation, and the economy as their top concerns, while millennials’ top concern is the economy, followed by inflation, war, the pandemic, and housing costs.

While Zimmerman says economic disruption and volatility are the new normal, millennials are more optimistic about the future while Gen Z shows more restraint in their financial plans. Those outlooks stem from the generations’ core values, he says. 

Gen Z’s core values are openness, resilience, realism, responsibility, and inclusivity. Millennials’ core values are authenticity, authorship, optimism, exploration, and diversity.

These values shape financial outlooks. Credit unions must be aware of who they are working with when determining how to serve these generations in the face of constant disruption.

“The imperative is now for brands to de-risk the marketplace,” Zimmerman says. “Risk reduction for Gen Z requires putting responsibility and realism there. For millennials, it’s about optimism. This requires more creative thinking from brands.”

Brands must take the lead on de-risking the marketplace, he adds.

“Consumers need a familiar choice, something they can count on, and something that feels known and safe,” Zimmerman says. “Brands must be an anchor point for stability. Businesses can do that by focusing on solutions that help provide stability and optimism.”

Examples of how financial institutions can de-risk the marketplace:

• No more overdraft fees. It’s one less worry for consumers.
• Wages on-demand. Programs like Earnin and Payactiv break the cycle of the two-week pay period and offer flexibility to workers who want immediate access to their money.
• Well-being/de-risking anxiety. Brands can deliver well-being and positivity to consumers who are dealing with anxiety.

“Health is a way to add value without raising prices,” Zimmerman says. “Consumers want brands to be consistent with better well-being and mental health.”

• Guarantees. Assurances provide the confidence that allows millennial optimism to flourish.