More than 90 years ago a group of Los Angeles area schoolteachers started a small credit union. But Glendale-based California Credit Union has since grown from its humble beginnings to serve more than just teachers, spreading into additional markets amid initiatives to evolve. Recently, a new target clientele for the credit union has emerged: Gen Z and millennials.

Operational changes for the financial institution began in 2017 when CCU merged with North Island Credit Union in San Diego, which opened CCU to a wider pool of clients, not just those involved in education. Then in 2023, the credit union officially expanded into a community charter to serve members across Los Angeles, Ventura, Orange, Riverside, San Diego and San Bernardino counties. This shift also diversified membership eligibility to anyone who lives, works, worships, attends school or owns a business in its service areas, plus all school employees across California.

CCU’s expanded pool of members both geographically and occupationally has proved advantageous for growth. Currently the second largest Valley-based credit union by assets, sitting at more than $5 billion as of June, CCU has increased its assets by about 32% from 2020.

Attracting the next generation of clients, though, has been crucial for CCU’s sustainability.

When it comes to signing on Gen Z and millennial clients, Robert O’Grady, the company’s chief operating officer, says the credit union “was really struggling five years ago.”

And it’s not just CCU that has grappled with this. Recent data shows that 79% of Gen Z and 69% of millennials identify larger banks as their primary financial institution with just 11% and 15%, respectively, saying the same for credit unions, according to an Apiture report backed by data from a 2024 Harris Poll.

“We really had to retool ourselves to be a choice for them,” O’Grady says.

This retooling approach is two-fold with significant pushes toward marketing and tailoring products and services to the younger generations’ needs and preferences, says Jill Vasant, chief marketing officer at CCU.

Over the last five years, these efforts have resulted in a 40% increase in Gen Z and millennial members for the CCU and a 116% increase in online applications from this group.

Specialized solutions and tech-based platform

In finding ways to appeal to younger audiences, the credit union places huge emphasis on its mobile app.

“We know that these generations are all digital natives,” Vasant says. “They’re accustomed to getting information instantly at their fingertips and seamlessly across applications. We’re constantly working to add enhancements to our mobile app.”

This includes features to check credit scores, tools to create budgets for certain goals – such as saving up for a wedding or vacation – financial literacy modules, videos and blog posts, and the ability to send and receive funds through Zelle. 

In line with this strategy, the Harris survey found that 80% of Gen Z and 81% of millennials hold digital banking paramount in their banking preferences and favor digital features, such as Zelle, budget tracking, ability to transfer funds between accounts and monitoring credit, at higher rates than Gen X and baby boomers.

O’Grady finds that with the younger generations, there’s a perception that the larger, household name banks offer better access to financial tools on the digital side of things. Thus, having CCU’s app accompanied by a 4.9/5 star rating in the Apple app store – on par with the ratings for Wells Fargo and Citi – is crucial.

While the majority of this demographic is choosing larger banks, Apiture asserts that “banks and credit unions that cater to the specific preferences of younger consumers can win a greater share of this strategically important group” in its report.

In addition to placing emphasis on its mobile app, CCU has been ramping up its use of data and AI, including forming its own in-house data team.

“That was a shift for the credit union to really focus energy and resources on building out this (data insights) team and making this a priority, because we know how much better and more strategic decisions can be when they’re data driven,” Vasant says.

For the younger generations, this means looking at what types of accounts they are opening, what their needs are and what life cycle they are in, mining that data and then creating offerings and services that are in alignment.

“It’s using our data, and then also using some predictive models (through AI) to suggest what that next product might be for them,” Vasant says.

For example, this could mean targeted advertising for first-time homebuyer programs, which seems to be working as 81% of the credit union’s first-time homebuyers last year were Gen Z or millennial, compared to 65% in 2019.

Additionally, the underwriting for opening accounts is being done by AI, O’Grady says. During this, AI can also generate savings for members by calculating how much they could save per month on certain payments by cross-referencing another institution’s APR with CCU’s.

“The AI is pulling from a bunch of different data sources too,” O’Grady says. “It could possibly know that you have a credit card somewhere else that possibly is at 19% and our credit card is at 7%.”

With these tools, O’Grady finds members are often quite enthusiastic about potential savings through refinancing and consolidating debt – options that many folks may not know they have.

Marketing and social responsibility

Even with updates to digital services and product offerings, awareness continues to be a roadblock for credit unions.

“A sizable portion of consumers – including 30% of Gen Z and 21% of millennials – do not have credit union accounts because they simply aren’t aware that membership is an option for them,” according to Apiture’s report. “Credit unions must focus on building awareness with this segment.”

O’Grady finds this to be very true, adding that even when younger generations do know about credit unions, they don’t think they fit membership criteria. This is an especially important thing for CCU to dismantle because it was in fact a teachers’ credit union for many, many years.

The key to teaching the community about CCU is outreach.

“The marketing is really making sure that we’re reaching them on the channels that they like to be communicated on or with,” Vasant says, using Google, YouTube, Facebook and Instagram as examples. “We make sure that we’ve carved out a significant portion of our marketing budget – and that that increases every year – to reach them on social channels through paid advertising.”

Aside from online, the CCU promotes its platform through community partnerships.

“One of the great things that we do is going into communities, especially underserved or underbanked communities, and so that helps spread awareness for ourselves, but also really goes to who we are in terms of helping our community and all of those grassroots efforts that contribute to our membership and the organization,” Vasant says.

This can be in the form of promoting financial literacy through seminars/webinars on topics such as establishing credit and paying off debt. Local partnerships include the Los Angeles Unified School District, the L.A. County Office of Education and the Los Angeles Boys & Girls Club.

Last year in particular was substantial for the CCU in terms of community initiatives with the launch of the California Credit Union Foundation, which focuses on investing in organizations surrounding education, service members, community and youth. Of the $2.5 million the credit union has invested in community programs in the last five years, more than $700,000 was deployed in 2024.

Younger generations notice these efforts. In fact, the Harris survey found that “28% of Gen Z would consider switching away from a large bank to a community bank or credit union due to ethical or moral alignment with the smaller institution’s practices.”

In analyzing marketing impacts, Vasant finds that social media posts showcasing CCU’s community involvement and philanthropy get “a lot of engagement, especially from the younger generation.”

“Those efforts speak to them,” Vasant says. “They want to see who we are, aside from just a credit union that offers a checking account or their first car loan, but really who we are beyond those walls. We’re able to really paint that picture for them and our social responsibility online.”