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Generation Y
Generation X

Banks Vs. Credit Unions: X And Y Less Loyal To Banks

A recent poll reverals that banks' most loyal customers are their oldest customers. While Generations X and Y are the retail banking customers of the future, the poll indicates they are also the least loyal and hardest to please.Why is this happening?

A recent poll reverals that banks' most loyal customers are their oldest customers. While Generations X and Y are the retail banking customers of the future, the poll indicates they are also the least loyal and hardest to please.Why is this happening? For a few reasons:CONVENIENCEThe current customer experience model at banks caters to older generations, who more frequently bank in-person at branches. But, younger generation customers are much more mobile and rely more heavily on online interactions.Locational convenience has always been the primary tool for attracting new banking customers. That's no different with Gen X and Y, but the definition of locational convenience is changing. Now it includes online and mobile and they expect anytime-anywhere banking.Banks need a strategy to attract and retain prospective customers who rarely step into a banking office. It is no longer uncommon practice for businesses to reach out via social media in an attempt to attract these younger customers. Even companies like Bank of America are using social media networks like Facebook to try to connect with them.PRODUCTSBanks have remained focused on building long-term relationships with their customers, but the needs of Gen X and Y are considerably different. Banks need to identify and offer products and services that give young people roots at the bank.For example, be the source for their first primary debit card – Gen X and Y comprise the debit card generation. Highly incent them to migrate to online banking with a significant reward for paying bills online. Stay in tune with how younger customers want to connect — online banking, bill pay and mobile banking are three customer touchpoints that must be state-of-the-art and part of every bank's overall customer experience.SERVICEAlso, ensure that the customer experience is appropriate for Gen X and Y (fast, convenient, service-oriented, technology-based) and consistent at all major bank touch points.In general, the survey results show that younger people can be more impatient, less tolerant and just plain harder to please than their Baby Boomer and Traditional cohorts: 37 percent believe they would get better customer service at a different bank; 22 percent reported being upset in the past year about high fees; 18 percent reported being upset about a lack of ATM locations.Make sure front-line employees are treating Gen X and Y the way they want to be treated and can solve problems on the spot — a key to securing lifelong patrons.Washington Mutual is one institution that successfully caters to the needs of younger customers, no longer requiring a signature to open a checking account. The bank simply uses the first signed check as the authorization signature — incenting new customers to do business with the bank by simplifying the process and eliminating a trip to the bank.BANKS VS. CREDIT UNIONSUndoubtedly, banks will need to do a better job servicing younger customers to win their loyalty and favor. And banks are now facing intense competition from credit unions, which seem to be doing a better job of targeting X and Y. (As a banker's daughter, it's not easy for me to admit that.)For example, a 19-year-old who is the "spokester" for Young and Free in Alberta, Canada is collaborating with Common Wealth Credit Union to create awareness for their under 25 age group.Her video blog explains the difference between credit unions and banks in very simple terms. It was created in an effort to attract and educate generation Y members. The video was posted January 2008, and by the following Monday afternoon, the video blog had been viewed nearly 4,000 times! To date, it has been viewed 29,317 times. Check it out below:

And then there's, which is a Web site of video snipets promoting credit unions and an on-line store where you can buy t-shirts and other kotchies to visually express your disinterest in banks. The site features links to the Credit Union National Association and World Council of Credit Unions. Check out one of the bankspank videos here:

Banks, all I can say is that you have some work to do! The future is here. The future is now. What – and who – will you become?

Zs came of age in an era of disruption

In many ways, it’s symbolic that Generation Z is named after the last letter in the alphabet because their arrival marks the end of clearly defined roles, traditions, and experiences. After all, Gen Z is coming of age on the heels of what has been referred to as the most disruptive decade of the last century. America has become an increasingly changing and complex place.

For example:

  • ‍Zs were born into a “modern family era” in which highly involved dads help out at home, and the nuclear family model (two parents, married, with children) represent only 46% of American households.
  • ‍Zs are the first generation to be born into a world where everything physical, from people to places to pennies, has a digital equivalent.
  • From the time they were infants, Zs had access to mobile technology. As a result, their brains have been trained to absorb large amounts of information, and Zs are especially adept at shifting between skills and subject matter.
  • Zs tend to have crystal-clear memories of sitting up for the first time at six months old because they can easily and quickly reference the photos and videos their parents shared on social media or saved in the “cloud”. 

Members of this generation have undoubtedly been shaped by crisis and disruption. This generation will largely be responsible for confronting the aftermath of the Great Recession, high youth unemployment, the effects of climate change, terrorism, energy sustainability, and more. These dark events have undoubtedly made this generation more cautious and pragmatic, but they have also provided this generation with the inspiration to change the world – and their grit will likely allow them to do it.

Coming of age during disruption means that most Zs will be comfortable being the disruptors. While Millennials tend to be collaborative and innovative, this generation tends to be sincere, reflective, thick-skinned, and self-directed, and will likely approach work in much the same way.

Zs were raised to be competitive

In the era following World War II, Boomers (1946-1964) were born and eventually became the wealthiest, most prosperous generation in history. Raised to aspire for the American Dream, this very large generation moved into positions of power and influence, and served as the workforce majority for 34 years.

With the American Dream alive and well, Boomers had no reason to teach their children, mostly Millennials, about competition. Instead, they taught them to focus on academic achievement and to be team players because if everyone works hard, everyone can win.

Enter Generation X (1965-1981). In contrast Boomers, Xers came of age during a time when change and economic and political uncertainty began to take root. They have lived through four recessions, struggled with debt and economic decline most of their lives, and watched the best educated and accomplished generation of all time (Millennials) graduate during the Great Recession and become the most debt-ridden generation in history.

Gen Xers can be defined by their independence and anti-status quo approach to life, and they have taught their Gen Z children to be competitive, believing only the best can win. They have encouraged their children to be realists, finding something they are good at and aggressively pursuing it.

Xers have raised their Zs with an intense focus on competitiveness -- in academics, sports, and other activities. This approach to parenting has many implications, but one stands out in terms of business: Gen Z is likely to lead.

Millennials in the workplace created and aggressively advocated for collaborative work environments. In fact, their aversion to leadership has been so strong, some Millennials sought out companies that boasted boss-free or team-managed workplaces.

In contrast, Zs have been raised with an individualistic, realistic, and competitive nature. They have been taught the skills to successfully defy the norm. This means we’re going to see the pendulum shift away from collaborative workplaces towards a widespread demand for, and pursuit of, leadership development.

Zs are career-focused.

While Millennials have been criticized for their “delayed adulthood”, Gen Z is showing signs of “early adulthood”. Educators and parents often describe this generation as being more serious and contemplative about the world. Zs are thinking about their career paths and exposing themselves to career training at an earlier age than Millennials. It’s probable that some of this early onset of adulthood is caused by parents, who are pressuring their children to be competitive and successful and to avoid the debt that plagued both the Gen Xers and Millennials.

The numbers from our global research found 46% of Gen Z said they know what career to pursue and 51% have taken a class at school focused on their career interests. Forty percent joined an extracurricular program (team, club) based on their career interests.

Zs are seeking financial security. 

Zs have been shaped by the aftermath of the Great Recession. They watched Millennials become debt-ridden and are concerned about falling into the same trap. XYZ University’s survey results show 66% of Zs said financial stability is more important than doing work they enjoy, which is the exact opposite of Millennial survey results.  Also, 71% of survey-takers have a paying job.

Zs value leaders who are positive and trustworthy.

When presented a list of leadership traits, Zs ranked positive and trustworthy the highest. While Millennials and Gen Zs both value trust in a leader, Millennials usually cite collaboration and vision as most important. In other words, Millennials focus on the outcomes leaders inspire, whereas Zs are more likely to consider leaders’ attitudes and personalities. To Z, what leaders encourage others to do isn’t as valuable as how they make them feel.


Zs want to be challenged.

Both Millennials and Gen Zs place a very high value on feeling challenged and appreciated in the workplace. However, according to our survey results Millennials rank appreciation slightly higher than challenge, whereas Zs rank feeling challenged slightly higher than appreciation.

Time will tell how Zs go down in history, but we know this generation’s influence on history will be unlike any other.


Does your organization have what it takes to engage the next generation? Take this quiz to find out.


Sarah Sladek is CEO of XYZ University. Our generational intelligence can assist you with engaging and retaining young talent and members.

Sarah Sladek

Concerned about declining engagement in our nation’s membership associations, non-profits, and workplaces, Sarah Sladek founded XYZ University, the nation’s first and only generations-focused training and engagement strategy company, in 2002.

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