The news: A new Vertice AI report based on a panel with Gen Z students revealed that many younger consumers can’t differentiate between banks and credit unions.

Zoom in: While the report underscored Gen Z’s focus on mobile banking apps, it highlighted a more urgent marketing gap that could lose credit unions prospective customers.

• Multiple respondents either did not understand how credit unions work or had little exposure to the member-owned, community-focused model. 
• One respondent noted that peers become interested when the concept is explained, but said credit unions are not marketed or advertised enough to younger audiences.

Why this matters: This problem isn’t new: For example, in 2024 we covered an Apiture study that found 30% of Gen Zers and 21% of millennials weren’t aware of credit unions as an option to meet their banking needs.

Credit unions clearly haven’t solved their awareness problem—and have lost critical opportunities to establish primary banking relationships during formative financial years. Moreover, those relationships are now being captured by banks, fintechs, and neobanks.

Recommendations for credit unions: Credit unions need to focus on earlier relationship-building through partnerships with schools, colleges, and community organizations. Indeed, financial literacy programs, student accounts, and campus initiatives could introduce younger consumers to the credit union model before they default to large banks or fintech apps.

Credit unions should also rethink marketing campaigns by clearly explaining their differentiators in practical terms. Rather than emphasizing member-owned structures, messaging should focus on tangible consumer benefits that matter most to Gen Zers: local branches, low fees, and higher interest rates.

At the same time, improving digital experiences will remain critical. To understand the digital capabilities most important to Gen Zers, read EMARKETER’s “Mobile Banking Emerging Features Benchmark 2025” next.

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