What is critical for credit unions to understand is that Gen Z is the first generation to be 100% digital.

“While millennials may be as willing to walk into a bank or credit to sign a loan document,” Preston Packer, sales and marketing director for FLEX Credit Union Technology, a core system software provider for credit union, in Sandy Utah. “I guarantee that Gen Z will not.”

And it's not because they're lazy.

Preston, who is the proud father of GenZers, believes it has everything to do with their efficient lifestyle.

“Let's talk about Gen Z and their behaviors and attitudes in terms of consuming media. My parents watched soap operas. I watched Seinfeld,” Preston said. “My son brings his friends over, they turn the TV on, but you know what they go to? YouTube – and they watch seven-minute clips of what we called America's Funniest Home Videos. But everything's been edited out. They only look at the stuff they want to see, and that's what they're consuming. And I really think that that's how this generation is unique and different.”

Preston doesn't believe that Gen Z thinks of financial institutions in relation to how many branches they may or may not have. For them, it's more efficient to engage with an app than to go into a branch.

“They've understood their whole lives that technology and information is ubiquitous,” he said. “It's all around them, so why not leverage it?”

Interestingly enough, Experian believes GenZers are using their smartphones to shop for loans and other financial products. The organization's data has shown that GenZers are getting lower interest rates than millennials for student loans and revolving credit lines.

“Based on what we see, it's probably technology that is allowing them to shop around,” Natasha Madan, an analytical consultant for Experian, said. “They're not going to their local bank like the older generations did, but they're going online to shop around getting the lowest rate.”

This means when these tech-savvy GenZers account for 4 of 10 consumers by 2020, they will expect a quick, seamless and customized mobile banking experience, which will include text messaging to stay connected to them and videos, messaging apps and social networking to market to this constantly connected generation. By the way, GenZers are more likely to be on Instagram and Snapchat over Facebook and Twitter, though they have not completely abandoned those still-popular social media sites, according to research from Fluent, a New York-based marketing data.

Just like any generation, however, GenZers are complex, according to research survey of 2,500 high school students age 16 to 18 by the Lombard, Ill.-based Raddon, a Fiserv company.

According to Raddon, three distinct segments of Gen Z emerged from its survey:

First, 34% expressed a preference for banking much like their grandparents did, face-to-face at a credit union or bank. They trust financial institutions, but they are distrustful of technology companies entering the banking space to provide financial services.

Second, another 37% of Gen Z said they prefer to bank through digital or electronic channels, relying on services such as mobile banking provided by a credit union or bank. While they believe that technology companies will affect financial services, they also know they will still have to rely on traditional providers in the future.

And third, 28% of Gen Z stands on the bleeding edge of technology. They think all financial institutions are the same and want to bank in a way most convenient for them. They believe an array of providers will supply their future financial service's needs.

Credit unions that manage less than $500 million in assets that provide mobile bank are continuing to the benefits of growth over those same asset cooperatives that don't provide mobile banking.

According to Callahan & Associates research, among the 2,797 credit unions with less than $500 million in assets that mobile banking, they have experienced an annual membership growth of 1.66% over the last four years versus a -1.06% annual membership loss over the last four years among credit unions that don't offer mobile banking. Callahan's analysis also showed credit unions with less than $500 million in assets that offer mobile banking had a slightly better efficiency ratio, lower delinquent loans, and a higher member engagement and ROAA.

In addition to mobile banking, research also shows there are opportunities for credit unions to attract GenZers through financial education and establishing long-term relationships with them.

A TD Ameritrade annual survey of Gen Z showed 46% are worried about amassing student loan debt, and an Adecco study reported that GenZers are more concerned about the cost of education than millennials.

These concerns explain Raddon's research that found 56% of Gen Z survey respondents believe programs or seminar from financial institution are very or extremely important sources of personal finance information. Thirty-five percent of GenZers have attended a financial education programs or seminar, compared to only 12% of millennials, 11% of Gen Xers and 16% of both baby boomers and traditionalists.

Kelly Motley, director of analytics at Experian, agreed that financial education is a strong opportunity for lending institutions to establish relationships with the new generation that take their financial future very seriously.

Currently, 18-to-20-year-old GenZers are earning an average annual wage of about $33,000 and their average debt is $12,600, which primarily includes student loan debt, some card debt and/or car loan debt, according to Experian. Their average credit score is 631.

A GenZer's average annual credit card spend is about $9,500 and they carry an average card balance of about $1,500. What's more, their average debt-to-income ratio is low, just 5.7%.

Based on interviews with GenZers, Experian found that the up and coming consumers want honest feedback on how to manage their credit and they want to establish consistency and trust with a company.

“So how do you bring them (GenZers) into your strategy? Message with authenticity. You want to connect with them to something bigger and not just that one product (student loan) or that one offer (a credit or debit card),” Motley explained. “Make sure that they're doing a good job of not just paying your one loan back, but that they're establishing that credit for a lifetime.”

Another indication that GenZers are serious about their financial future is that many of them are also entrepreneurial, according to Goldman Sachs, which cited a survey by Northeastern University that showed 42% of GenZers expect to work for themselves one day, far more than the one in nine that are self-employed today. This could also open opportunities for credit union to expand their member business loan portfolio of for credit unions to consider entering the MBL marketplace.