When it comes to marketing, different generations require distinct approaches. Differentiating by prospect age and stage has always been important, but now — in a highly competitive loan acquisition environment — it is essential to tailor your reach, message, and offer to a specific generational audience.

The Lay of the Lend

Interest rates are declining, so loan demand is expected to improve. But consumers are still facing financial uncertainty: problematic inflation, the possibility of tariffs pushing prices higher, and interest rate unsteadiness.

Getting consumers to bite in this environment makes differentiation key. For loan marketers, this means understanding the preferences and needs of different generations. Here are some ideas to position your institution for generational marketing success.

Hello, Young Borrowers

Millennial (b. 1982–1996) and Gen Z (b. 1997–2012) borrowers are reshaping the lending landscape on their way up. Younger consumers are no strangers to debt. Millennials account for the second highest amount of average debt in the U.S.,[i] and almost half of outstanding student debt in the country.[ii] Gen Z uses credit more often than their Millennial peers at the same age and has more auto loans.[iii]

Looking at loyalty, the younger generations are especially fickle. They are frequent bank switchers. As digital natives, nearly all (up to 99%) use online and mobile access for everything banking-related[iv], so they have little patience for slow tech. In fact, up to 75% of Millennials would switch banks simply for a better mobile experience.[v]

Finally, these prospects are positioned for wealth. The Great Wealth Transfer will move $84 trillion in assets to these heirs over the next 20 years[vi], so financial institutions are wise to pay close attention to their younger prospects and be prepared to meet their needs.

What do they value? Young borrowers desire personalization: 60% of Gen Z consumers believe personalization leads to more positive experiences[vii] — which are more likely to lead to retention for the financial institution.

What’s on their minds? Just 40% of Gen Z and 48% of Millennials think their personal financial situation will improve moving forward.[viii] With this in mind, the younger generations are looking for solutions to debt management and saving.[ix]

How You Win: Get to Know Them

Gen Z and Millennials want to spend money with financial institutions that understand them. By leveraging data and analytics, financial institutions gain deeper insights into customers’ and prospects’ needs and preferences. This can help to create more targeted and personalized loan offers and marketing messages, increasing the likelihood of acquisition.

Because of their debt burden, education, budgeting tools, and personalized financial advice are also likely to win with this group. But beware: they insist upon exceptional digital capabilities and personalized experiences. Otherwise, they’ll look for a better fit elsewhere — and fast.

Understanding Gen X

Gen Xers (b. 1965–1980) are in their prime earning and spending years. They’re established in their careers and are likely to have mortgages and children at home. But this life stage can be stressful. In fact, Gen Xers feel financially insecure — indeed, they feel the least financially secure of all the generations.[x] They carry the highest debt load and are considered to be the first American generation to do less well than their parents.[xi]

Because they are sandwiched between the younger workers and the Baby Boomers, they report feeling lost and ignored by financial institutions. This is unfortunate because they are also the most steady customers for banks and credit unions.

What do they value? They want to feel stable, secure and — despite their oversize financial commitments — that they’re not falling behind.

What’s on their minds? While 77% of them are gainfully employed[xii], Gen Xers are still concerned about perceived job stagnation, paying off their debt, taking care of their families and keeping up the lifestyle they now enjoy.

How You Win: Reduce Their Monthly Payments

Gen Xers are the perfect targets for loan products aimed at reducing their monthly expenses, such as low-rate credit cards and mortgage refinance products, especially since interest rates have declined.[xiii] College loans for their children are of interest to a Gen X subset, but home equity loans are likely to be the most versatile for debt consolidation, medical expenses, and lifestyle choices such as vacations and memberships.

Attracting Baby Boomers

Baby Boomers (b. 1946–1964) suffered the greatest impact from the Great Recession, with huge losses in home equity and retirement accounts. One in five Baby Boomers say they have never recovered their losses,[xiv] and they cite everyday expenses as the greatest barrier to saving more for retirement. Sadly, some say they never expect to retire[xv].

In what’s been called the “graying of American debt,” Baby Boomer borrower debt has increased by 60% in the last 12 years, and their student debt has more than doubled.[xvi] While they are well past their own college years, Baby Boomers still shoulder the largest student debt — on behalf of their adult children!

However, this group has a lot going for them financially, including long credit histories and stable employment. In fact, they are the most likely generation to pay back their loans,[xvii] which makes them extremely appealing as customers.

What do they value? Baby Boomers would like to be debt-free, but given their current debt burden, they’ll settle for more manageable payments.

What’s on their minds? On the upside: retirement, traveling, downsizing and helping their children and grandchildren. On the downside: running out of money, aging, health, being scammed.

How You Win: Be Helpful — and Fund Their Fun

With retirement as a goal, and debt as a reality, Baby Boomers are ripe for refinancing or consolidation. They need sound guidance about new ways of living, whether that’s purchasing a smaller home, moving to a retirement community, or even choosing a reverse mortgage.

In some cases, they have more disposable income and more time to enjoy themselves, which might include traveling, new “toys” like new technology, boats or RVs, or new hobbies. Credit cards and loan products with perks like rewards points, cash back, and low interest rates might be helpful and of great interest to these older adults.

Data Rules

As always, loans are essential to every financial institution’s growth plan, and data is the key to differentiation. Data delivers:

• Knowledge: Financial institutions that embrace specific target segments based on generational trends and data-driven insights will be most likely to succeed.

• Timing: It’s more important than ever for financial institutions to be ready with relevant, personalized offers when prospects are shopping for loans.

• Connection: Prospects want to hear from you: 71% are receptive to your marketing offers.[xviii] Reaching them through multiple channels based on their preferences — direct mail/postcard, social media, digital display, personal outreach — is the way to connect.

By matching individual loan candidates with personalized offers, financial marketers are more likely to increase the likelihood of loan acquisition, while ensuring customers feel understood, valued and connected to your brand.

[i] Statista, https://www.statista.com/statistics/468600/average-debt-and-bankcard-balance-usa-by-generation/

[ii] Bankrate, https://www.bankrate.com/loans/student-loans/student-loan-debt-by-generation/#millennials

[iii] TransUnion,  https://newsroom.transunion.com/gen-z-using-credit-differently

[iv] CNBC, https://www.cnbc.com/select/why-millennials-gen-z-use-mobile-banking-apps/

[v] Vested, https://fullyvested.com/insights/millenial-and-gen-z-financial-marketing/#:~:text=And%20while%2080%25%20of%20baby,for%20a%20better%20mobile%20experience.

[vi] Cerulli Associates, https://www.cerulli.com/press-releases/cerulli-anticipates-84-trillion-in-wealth-transfers-through-2045

[vii] The Harris Poll,    https://theharrispoll.com/briefs/unlocking-the-power-of-personalized-banking-consumer-research-insights/

[viii] Deloitte, https://www2.deloitte.com/content/dam/Deloitte/at/Documents/presse/at-deloitte-global-gen-z-millennial-survey-gesamte-studie.pdf

[ix] Vericast, https://insight-hs.vericast.com/hubfs/2024/Vericast-2024FinancialServices-TrendWatchReport.pdf

[x] Bankrate, https://www.bankrate.com/banking/financial-freedom-survey/#not-secure

[xi] Harland Clarke, https://insight.harlandclarke.com/wp-content/uploads/2016/05/HC-Generational-Borrowing-Habits-white-paper-2016-05.pdf

[xii] Forbes, https://www.forbes.com/sites/learnvest/2014/11/21/x-y-and-z-how-the-generations-really-stack-up-financially/

[xiii] Harland Clarke, https://insight.harlandclarke.com/wp-content/uploads/2016/05/HC-Generational-Borrowing-Habits-white-paper-2016-05.pdf

[xiv] Transamerica, https://www.transamericainstitute.org/docs/library/research/retirees/retirees_survey_2015_report.pdf?sfvrsn=5cff5d9b_2

[xv] AARP, https://press.aarp.org/2024-4-24-New-AARP-Survey-1-in-5-Americans-Ages-50-Have-No-Retirement-Savings

[xvi] Federal Reserve Bank of New York, https://www.politico.com/agenda/story/2016/02/the-latest-victims-of-student-debt-the-elderly-000053/ /

[xvii] Lending Tree, https://www.lendingtree.com/debt-consolidation/generational-debt-study/#:~:text=By%20generation%2C%20baby%20boomers%20were,overall%20debts%2C%E2%80%9D%20Schulz%20says.

[xviii] Vericast, https://insight-hs.vericast.com/hubfs/2024/Vericast-2024FinancialServices-TrendWatchReport.pdf