Credit unions are losing market share with younger generations, with banks serving as the primary financial institution for the majority of millennials and Gen Zers. Senior partner Pradip Patiath and colleagues find that baby boomers accounted for the largest share of credit unions’ members last year, at 39 percent, an increase from 28 percent in 2015. As more baby boomers retire and reduce their borrowing needs, credit unions’ performance could be at risk in the coming years if they don’t increase their relevance to millennials and Gen Zers.
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A stacked bar chart shows the percentage of banked households by generation and primary financial-institution type, comparing credit union vs bank usage across 5 generations in 2023: silent generation (born before 1946), baby boomers (1946–65), Gen X (1966–80), millennials (1981–96), and Gen Z (born 1997 or later).
Among the silent generation, both credit unions and banks account for 5% of banked households. For baby boomers, credit unions account for 39%, and banks for 29%. For Gen X, credit unions account for 25%, and banks for 24%. For millennials, banks account for 29%, and credit unions for 21%. For Gen Z, banks account for 12%, and credit unions for 10%. The chart highlights that banks have a larger share of younger generations than credit unions.
Note: Figures may not sum to 100%, because of rounding.
Footnote: The number of respondents for credit unions is 769, and the number of respondents for banks is 4,270.
Source: McKinsey Consumer Financial Life Survey.
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To read the article, see “Six imperatives for credit unions to secure their future,” June 17, 2024.