HERNDON, Va.— Millennials and Gen Z are increasingly turning away from credit unions, with membership among younger consumers falling sharply and many perceiving the institutions as outdated or out of step with their values, according to a new Sogolytics study.
Yet the report also points to opportunity: strong satisfaction with digital banking and growing demand for youth-focused accounts could help credit unions regain traction with these demographics.
Nearly half (49%) of Gen Z say they've heard of credit unions but don't understand how they work. Perceptions of being outdated persist: 17% view credit unions as "for older people," while another 17% believe they are "not modern enough."
Sogolytics pointed out that credit union membership among Millennials has fallen sharply, from nearly 31% in 2023 to just over 22% in 2025. Today, only 23% of Millennials and Gen Z use a credit union as their primary financial institution, compared with 37% who rely on commercial banks.
While two-thirds of Millennials and Gen Z say they try to support brands aligned with their values, only 35% feel their financial provider reflects those values. Notably, 34% of younger consumers who feel no values alignment still remain with their provider, citing convenience as the main reason.
Digital Divide
Data show digital banking is now essential for younger consumers—47% prefer to manage finances through mobile apps. While 12% still describe credit unions as "not modern," nearly half (47%) of Millennial and Gen Z credit union members report being very satisfied with their digital experience—higher than commercial and community banks.
Sogolytics said the research also reveals a significant growth opportunity: 47% of non-members say better rates or fees would motivate them to switch to a credit union. Even more striking, 85% of Millennials and Gen Z say they would consider a youth-focused account, signaling a clear path for credit unions to grow membership.