Harland Clarke Outlines Key Differences in Generational Borrowing Habits


The traditional life-stage model is a useful tool for credit unions and their marketers, but recent research suggests every generation approaches finances differently. Possible reasons for this include effects of major economic events or cultural shifts, including the Great Recession, the proliferation of digital technologies, and the introduction of fintech.

A leading provider of customer engagement solutions, Harland Clarke offers credit unions a variety of tools, such as lifecycle marketing solutions, communications services, and promotional products.

“Harland Clarke helps Northwest credit unions serve members of all ages,” said Jason Smith, VP of Strategic Resources. “They are an important partner to have in providing valuable banking solutions that fit each individual member’s needs.”

The Strategic Link partner advises credit unions to continue acknowledging generational borrowing differences in order to offer more personalized loan products and deliver a frictionless member experience.

Baby Boomers
No generation was affected by the Great Recession of 2008 more than the baby boomers, who saw their home equity and retirement accounts deplete in their critical late career saving years. In addition to recovering from these setbacks, baby boomers are also the largest growing demographic for student loan debt, accumulated on behalf of their adult children to help them defray the rising costs of tuition. Despite these concerns, due to their long credit histories and stable employment records, they are the most likely of all the generations to repay their loans, making them solid prospective members for credit unions.

Generation X
Gen Xers not only took out money for college and their homes, but they also borrowed money to maintain the lifestyle their parents had afforded them as children. As a result, Gen X carries the highest debt load — an average of $136,869 per person. Still, their borrowing habits make them the steadiest credit union members, and they consistently contribute the most to their retirement funds. Gen Xers often report feeling underserved by financial institutions, so personalized product offers do well with this generation.

Though millennials have the most buying power of current generations, the recession, high cost of education, and a generational shift toward delaying things like marriage and first home purchases have significantly deferred many milestones of the American Dream for them. But millennials are not afraid to borrow — especially when it comes to purchases they feel will put them ahead financially. Not surprisingly, the largest purchases for millennials are college tuition, homes, and cars. Millennials like to be informed and advised when it comes to their financial decisions. They will view financial institutions as trustworthy if they offer financial education rather than just pushing products.

Generation Z
Gen Z is arguably the most complex consumer group. These children of the economic crisis are already concerned about their future earnings. In fact, 55% report being worried they won’t be able to borrow money in the future if they need it, presenting credit unions an opportunity to educate them about borrowing and provide resources such as financial wellness coaches. Though the full industry impact of Gen Z remains to be seen, one thing is certain: Financial institutions will need to improve their digital and mobile technologies if they hope to reach this digital-first, social media-proficient crowd.

For more information on generational borrowing habits, read Harland Clarke’s full whitepaper here.

Learn more about Harland Clarke by visiting its Strategic Link partner page or contacting Jason Smith at 208.286.6794.

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Posted in Business Solutions, GoWest Solutions.