Understanding Generational Cash Habits: How Credit Unions Can Meet Evolving Needs

Guest Editorial by Steven Nogalo, General Manager of North America, NCR Atleos

Even as digital adoption continues its upward trajectory, cash remains a healthy and solid component of the financial services ecosystem. When planning for the future, credit unions must prioritize a strategic mix of digital and physical touchpoints to accommodate the full spectrum of digital options and cash management in order to effectively meet their members’ diverse needs. 

Steven Nogalo

While it’s common to assume that older generations are the most resistant to digital offerings and that younger generations oppose in-person interactions, the truth is much more nuanced. By understanding general trends among different generations, including their attitudes toward cash and self-service banking, credit unions will be better positioned to offer strong, relevant experiences across their comprehensive member base.

Generational Breakdown

Baby Boomers value financial security and tend to be more budget conscious than other generations. And while this group is growing increasingly comfortable with digital payments options, only 12% are early adopters of technology. Most Baby Boomers prefer to use cash for small transactions like tipping or everyday purchases. It’s common for this group to typically carry $50 to $100 in cash.

Gen Xers, who tend to value practicality and self-reliance, spend their money carefully and are generally more intentional about spending than younger generations. They leverage both cash and digital payments but generally carry a little less cash than Boomers, about $20 to $50 for smaller everyday purchases.  Gen X presents a potential growth segment for credit unions, as many in this group are in their peak earning years and are simultaneously growing more concerned about making sure they’ll have enough income in retirement.

Millennials are now the largest generation in the world, making up 23% of the global population. Their spending accounts for 28% of all daily per-person consumer spending in the US, an average of $85 a day per Millennial, and this is expected to increase to 35% over the next 15 years. Millennials are highly comfortable with digital payments and mobile wallets, but they might carry a small amount of cash – $10 to $20, primarily for tipping.

Gen Z, the first generation to have widely grown up with technology, tends to be financially conservative and focused on financial wellness. They are super-savers, often starting early and maxing out their retirement contributions, in many cases because they’re not confident that government retirement programs will still be available for them.  Even though they grew up with digital payments, Gen Z widely embraces cash; a 2023 Harris Poll found that 69% of Gen Z respondents in the US and UK indicated that they used cash more than they did the previous year. This group is likely to carry around $20 to $50 in cash and many practice ‘cash stuffing’ at home, a viral budgeting hack where cash is kept in envelopes designated for certain expenditures.

Strategies for Success

While some of these behaviors are expected, others might be surprising. In order to effectively serve their members’ complex and varied needs across generations, it’s critical for credit unions to offer the technology, tools and options to satisfy these preferences.

For example, it’s clear that the use of cash remains steady and ongoing. However, members want convenient options for where to withdraw cash and conduct their everyday transactions. In response, credit unions are increasingly turning to options like utility ATM networks, which involve plugging into a network of ATMs located within trusted retail locations (such as grocery, convenience/fuel and pharmacy), allowing members to withdraw and in some instances even deposit cash from where they live and shop.

This strategy delivers a convenient, secure way for members to access their finances even without a physical branch nearby. Plus, it offers value to the credit union, enabling them to extend their presence out into the communities they serve and more effectively replicate the scale and reach of larger competitors.

Credit unions are also increasingly looking for more efficient and effective ways to deploy modern, robust self-service devices, especially as traditional ATM deployment becomes increasingly complex and expensive. One powerful strategy is turning to an ATM as a Service (ATMaaS) and/or ITM as a Service (ITMaaS) approach, in which maintenance and management of the fleet are outsourced to trusted partners.

Such a strategy enables credit unions to transfer the complexities of managing hardware, software, security, installation, maintenance, cash management, and processing to their trusted financial technology partner. This results in a more efficient and reliable self-service channel for credit unions, allowing them to more quickly implement new features and functionality while freeing up staff for more meaningful, member-focused interactions.

As the financial services landscape continues to evolve, it has become clear that there is no one-size-fits-all approach. Each generation and member bring their own expectations and behaviors to how they interact with money, and credit unions must be prepared to meet this spectrum of needs. By striking a strategic balance between compelling digital experiences and accessible, modern physical touchpoints, credit unions will be well positioned to strengthen member relationships, boost engagement and support growth.

NCR Atleos is a leader in expanding self-service financial access, with industry-leading ATM expertise and experience, unrivalled operational scale including the largest independently-owned ATM network, always-on global services and constant innovation.