Design for Digital Takeover: Part 3

Episode Transcript

Jerry Kane: Welcome to the Design for Digital Takeover of the Filene Fill-In podcast, presented by the Filene Research Institute as a part of the Design for Digital Center of Excellence. I’m your host, Jerry Kane, and each episode is crafted especially for credit union executives who are passionate about leading in the digital era. Join us as we explore the insights, innovations, and strategic thinking needed to thrive in an evolving financial landscape.

We’ll hear from industry leaders, cutting edge innovators, and credit union visionaries who are actively shaping the future of digital finance, member engagement, and sustainable growth. Today, I’m thrilled to introduce our guest, Kim Lear. Kim is a celebrated writer, researcher, and founder of Inlay Insights, known for skillfully blending eye-opening statistics, insightful storytelling, and relevant case studies.

Previously, she served as the content director at BridgeWorks, a research firm specializing in generational and millennial trends. Her research has spanned baby boomer longevity, millennials, and social media trends, and currently, she’s in her ninth year of an influential longitudinal study on leadership. Named one of today’s best speakers by Meetings & Conventions Magazine, Kim has delivered keynote addresses for renowned companies like American Express, Cisco, Disney, Deloitte, General Mills, LinkedIn, Mastercard, PricewaterhouseCoopers, and Wells Fargo.

She is also the head of research for the book Gen Z at Work and writes the popular Substack newsletter, Kids These Days. In addition to being widely recognized as a generational expert featured on NPR and in publications like The Wall Street Journal, The Huffington Post, USA Today, and Time, Kim serves as an advisor to Four, an AI startup focused on predictive analytics for retention, and volunteers with the 78 Cent Project to empower young women with strong presentation skills. Last but not least, Kim serves as a Filene Fellow for the Center for the Next Generation of Member Growth, which looks to identify strategies to attract, engage, and retain younger credit union members.

When she’s not deeply engaged in human behavioral research, Kim enjoys spending time with her husband and daughters in Minneapolis. Powered by Filene’s commitment to research and innovation, let’s get started. Kim, welcome to the podcast.

Kim Lear: Thank you so much for having me. It’s a pleasure to be here.

JK: It’s a pleasure to have you here. So this is my first time hosting. Your bio mentions that your research spans generations from baby boomers to Gen Alpha. What inspired you to explore these generational dynamics initially?

KL: I was an undergrad student, actually, and I worked with a professor who was doing a longitudinal study, specifically looking at how the story of aging in America was changing. It was a time-use study with interviews of people turning 65. If you interview people in 1980 on their experience turning 65 and ask them about technology, relevancy, sexuality, and legacy, then compare time-use studies of 65-year-olds in 1980 to today, it’s so different. It was so different in how people aged, how they viewed that life stage, and how they spent their time. That got me really interested in how the time you’re born, the technology available, health care innovations, culture, and norms all have lasting impacts on how we live and what we think is available to us.

And then Jean Twenge, the amazing researcher, wrote Generation Me when I was young, which was the big book about millennials. I am one, and I felt like the Stepford millennial because so much of what she wrote, I thought, is she spying on me and my friends? She really understood what it felt like to be young in that time. I found it fascinating and stayed with it.

JK: I did some generational work early in my career as well. One of the things I had difficulty teasing out was the difference between generation and life stage. How much of it is because you’re Gen X or millennial, and how much is “I’m 20-something” or “I’m 53 now”? How do you tease those things out?

KL: Part of what I like looking at is how a life stage changes when a new generation steps into it. Of course, there are similarities and developmental realities of adolescence, and there are natural cognitive declines of aging. Some things will always exist. Strauss and Howe talk about intra-cohort changes and inter-cohort changes. Some trends impact every generation as they move through life stages. Others reflect cultural change even if individuals don’t change their minds. A common example is the sexual revolution. When baby boomers changed norms around sexuality and marriage, traditionalists, their parents, didn’t change their minds. Surveys found they became more conservative. But, without sounding morbid, they eventually passed away, and the boomer story became the American norm. Boomers didn’t age and morph into their traditionalist parents; their longstanding beliefs shaped every life stage they touched.

With Gen X, for example, they have the lowest divorce rate since the 1930s. The family tumult of their formative years, that spike in divorce, created a fixation on nuclear families. When they hit marriage and kids, they didn’t morph into their parents. They approached the life stage differently. So yes, when you have a mortgage and kids, there will be similarities across generations tied to life stage. And then there are things that are fundamentally different.

JK: Let’s get to the so-what question. What are the implications of these generational differences for financial readiness and attitudes? And what does this mean for credit unions?

KL: So much. Every industry should try to see the world through the eyes of a different generation. In financial services, it’s even more important because it’s a trust-based industry. For credit unions, how does a new generation of members vet decisions? How do they decide where to put their money? Who do they trust, and how do they define trustworthy? What are their perceptions and expectations of technology, and how does that shape their interactions with your credit union? Internally, how do you attract the best and brightest as employees so they can guide the innovation needed to meet this moment? In the Center for the Next Generation of Member Growth, we look at how family dynamics have changed to better understand wealth transfer. Many credit unions have aging member bases. Where are their kids? Why hasn’t that introduction been as seamless as in the past?

These are the questions that matter. Who is this new generation? What levers will gain their attention, earn their trust, and win their business?

JK: Do you have any answers for us?

KL: Yes, a lot. One place is understanding the unique financial headwinds they face so credit unions can tailor financial education. Some credit unions have done interesting things in high schools to get earlier exposure. The earlier you get a piece of their business, the bigger the long-term impact. How do you talk to parents about the financial needs of their adult children earlier? We’re also looking at the influencer space. We have an experiment partnering with financial influencers: finding the right partner, negotiating contracts, holding them accountable to your messaging, learning what works and what doesn’t, and identifying which influencers have real trust in their micro-communities.

JK: Isn’t there a risk there? Doesn’t that require a lot of trust in the influencer? What if they say or do something stupid and damage the brand?

KL: The amazing thing about the centers is we can partner with experts. We partnered with Jason Shapiro at COAB in LA, a company that negotiates these contracts and connects firms with the right influencer. With the right contract, just like anything else, there are real repercussions for going off script and embarrassing a brand. If there are major legal consequences, you’re much less likely to do it.

JK: We will find you. We will find you and your firstborn.

KL: Yes.

JK: What strategies have you found most effective for bridging generational gaps in the workplace, whether among employees or with different customer bases, particularly in leadership roles?

KL: When leaders better understand formative years and what shapes a generation, it helps remove the generational hazing that exists in every culture and organization. In candid moments, leaders sometimes say, “It isn’t fair, and you can’t have what I have unless you go through exactly what I went through.” Understandable, but it gets in the way of progress and innovation. Approach moments of friction with curiosity and less judgment. Look at your own career journey more realistically and with less nostalgia, so you can build a future that works for everyone.

I also look at how to deliver feedback that motivates instead of paralyzes. A study my team did with Ernst & Young found a young person’s decision to leave an organization was directly tied to their first performance review. For many young people post-COVID, if you hire someone straight out of college, working for you may be their first job. Taking tough feedback, knowing what to do with it, and using it to improve are skills that may not be developed yet. Leaders today have a bigger responsibility. Some might call it handholding. I’d call it being clear about whether you’re trying to grow the next generation of credit union leaders. If so, there are places you’ll need to bend to meet today’s needs.

JK: Executives tell me my students do well with checklists, but when uncertainty appears, they struggle. I also think we do a disservice when an A is 94 percent. You have to be right 94 percent of the time to get what students see as acceptable. That’s not realistic. If you get it right one out of three times in the majors, you’re in the Hall of Fame. In my class, if you do everything I ask, you get a B plus. You have to figure out how to add value above and beyond, because that’s how the world works, not just checking boxes.

KL: I think people are interested in this, especially credit union leaders who also have families and real lives. Grade inflation started in the 90s. Over the next ten years, universities are pulling from a smaller customer base. When higher ed shifted to a customer service model, it affected what professors felt they could do. Disgruntled students lead to disgruntled parents, and the ripple effects are real.

JK: The easiest thing in my job would be to give everyone As. But now as department head I’m telling faculty grades are too high. The system and expectations push against it. It drives me crazy when a student with an A minus asks, “What did I do wrong?” Nothing. You were supposed to get a B plus. Managing expectations is hard.

KL: Conversations like this matter. If you want to see the world through another generation’s eyes, understand the formative events and conditions that shaped them. The background of grade inflation is a real difference between when Gen Xers were in higher ed and what young people experience now. Credit union leaders love people and want a holistic understanding so they can meet members where they are.

JK: Had you had much experience with credit unions before this role?

KL: Some. They found me through work I’d done with credit unions. Many years ago, I wrote a case study on how credit unions lost millennials after Occupy Wall Street. My interest started then, because I was young during the Occupy movement and it was formative for me. I’ve also done a lot of work with big banks. This is my first deep dive into credit unions.

JK: I knew nothing about credit unions at first. As I talk to academic colleagues: “Did you know anything about credit unions?” No. The people orientation really comes through compared to other industries. I had Chris Giles from Maps Credit Union visit my class. A student asked, “Why haven’t I heard about credit unions before?” He wanted to cry. The message gets lost. I think the message is appealing to younger generations. Some of it is just getting the message out.

KL: Absolutely. I presented for the Michigan Association of Credit Unions and did a Q&A with their young professionals. Many started at 16 as tellers and now they’re 24 or 25. They have real experience and love working there. They have amazing mentors who saw potential in them. I asked, “Do your friends bank at your credit union?” They said, “I’ve never really talked to them about it.” There’s low-hanging fruit here. So many young employees love the industry. People in credit unions don’t realize how unusual that is. It’s normal for young people to hate their jobs. Employing young people who could be evangelists is an underleveraged asset.

JK: I wonder if that longevity is a double-edged sword. You get consistency, but maybe it gets insular. Before I became a business school professor, I was a Methodist minister. I’m still Reverend Dr. Kane. I didn’t understand what it was like to go to a new church as a civilian until I left professional ministry. That perspective would have changed a lot about how I did things. I wonder if credit unions sometimes need outside thinking to see what people want now. You’ll keep the same people if you do business as usual, but there’s untapped opportunity if you get into the mindset of those not already in the fold.

KL: I think you’re right. There are huge pros to longevity. Members love walking into a branch and seeing familiar faces. That’s unusual. People work there, love it, and are there for you. Low turnover is a strength. But it’s hard to scale, and it can be hard to see with fresh eyes.

JK: Back on script. In a presentation of yours, you discussed the contradiction between millennials’ and Gen Z’s actual wealth versus their feelings of financial instability. What drives this disconnect, and how can credit unions respond?

KL: I look at attitude-behavior gaps, the difference between what people say in self-reports and what we see in consumer behavior. The term phantom wealth captures part of it. Many young people have money on paper. Compared to previous generations at the same age, millennials and older Gen Zers are doing better. But they feel broke. Prices for some things have dropped, but the prices of critical things have gone way up: housing, health care, and education. So young people may have money on paper but feel they can’t access what matters most.

Social media also defines expectations. I study generational aesthetic preferences: interior design, fashion, cosmetics, plastic surgery, med spa expenses. Expectations are very high, which makes sense given what looks normal online. Young people either exercise huge self-discipline, then feel deprived, or they overspend and rack up credit card debt. That creates the gap between balance sheets and feelings of stability.

JK: And there’s always FOMO. These platforms are designed to take your money.

KL: That’s not a side effect. That’s the purpose. My research started with social media. I have a love-hate relationship with it. It has potential as a tool, but it can drain people.

JK: Should credit unions be on social media given all that?

KL: Yes. Credit unions need young members. Service provider exploration happens on social media. There isn’t really a choice. Gen Z and older Gen Alpha have complicated relationships with social media. They don’t think it’s all good. I don’t know where that goes because it’s so ingrained. But yes, love-hate is right. For credit unions, some messaging and financial education miss the urgency of the moment. Calculators showing how you compare to peers don’t address the constant sense of being behind. There’s room for financial education that speaks to the psychological triggers around money that shape the experience of being young in America.

JK: I wrote a book on COVID and company responses. Looking back, there’s a major global crisis roughly every ten years. Those moments shape generations. We’re at another such moment with AI. No one knows how it plays out, but how do you see AI influencing generational dynamics?

KL: I’m glad for the disclaimer. I work with a lot of tech companies. What keeps me up at night is realizing no one is fully driving the bus. Even builders don’t fully know what’s happening. Every student I work with uses AI. There’s a feeling that good jobs will get better, bad jobs will get worse, and the middle will disappear. People want to land on the right side of that split. Trade schools are growing, which may be an AI-opt-out path toward tactile, physical work, since robotics at scale is further off. They still use AI and are conflicted about it.

JK: I’m wary of hype. Predictions will take longer than people say, yet even now most people don’t understand what these tools can do, and most students use them poorly. I teach with AI to help students get on the right side of the shift. Image issues will likely get worse. You’re not just comparing yourself to the most attractive person in the world but to stylized, fake images. From a credit union perspective, technology and AI make things even more friction free. The last best experience becomes the minimum expectation everywhere. That raises expectations for seamless, optimized experiences.

KL: There is already a lot of AI-created garbage online, and young people see it. They don’t find it impressive. What becomes scarce becomes high status. As AI becomes more common, being human becomes higher status. The experience of being with a human becomes more luxurious. That’s an important place where credit unions can play. In an age of machinery, being deeply human is the high-status marker. Authenticity is gold.

JK: Your recent work with Filene highlights attitude-behavior gaps in financial choices. Can you explain a surprising gap and how credit unions can address it?

KL: One story woven about Gen Z, and really about every youth cohort, is that they’re mission driven and socially conscious, and their spending aligns perfectly with their ethics. We don’t see that consistently in the market. In fashion, for example, sustainable fashion gets buzz, but the top retailers for Gen Z are Shein and Amazon. Credit unions have real moral advantages over big banks, and that can be a tiebreaker if all else is equal. But people won’t sacrifice fraud protection, security, rates, a good digital experience, convenience, and ease of use for moral positioning alone. Win on the core table stakes first, then let ethics be the tie-breaker. Also, Gen Z shows a swing back to traditional status signifiers: golf, tennis, country clubs. If your messaging sounds like a traditional nonprofit and ignores status, that’s tricky. Speak to a broader slice of the market while keeping digital, rates, and security competitive.

JK: A funny pattern in my classes: every cohort says, “We’re fine, but the middle schoolers these days are doomed.” I’ve heard that for twenty years.

KL: There’s always a story that the next generation is either salvation or doom. Neither is true, but those are the stories we tell.

JK: What actionable steps can credit union leaders take to understand members under 40?

KL: Look at everything happening in the Center for the Next Generation of Member Growth. A big handbook is coming out on our influencer experiment: messaging that works, which influencers truly influence, how to leverage them, what to ask them to create, and how to structure contracts. For financial education, see our report on Gen Z’s unique headwinds, including social media–induced overconsumption and the proliferation of sports betting and online gambling. Speak directly to stress points. Get in front of current members sooner for introductions to their children. Market teen accounts and debit cards better. The sooner you get a piece of their pocket, the longer you’ll keep them, and the more likely you’ll become their primary financial institution. We’re wrapping an interview series with young people to map their full financial picture: Venmo, Starbucks, credit unions, banks, parents’ accounts, brokerage, all of it. The takeaways will help credit unions get a seat on that bus, and ideally more than one.

JK: Looking ahead, what emerging generational trends are you most excited to explore?

KL: The end of the phone-based childhood.

JK: Hang on. What do you mean, and why has it ended?

KL: The average Gen Zer got their first smartphone around age 11. Even before that, iPads were common, and there wasn’t much taboo about kids on tablets. No judgment of parents; everyone does their best with the information they have. Ten years ago, we knew less. Now we know more. Schools are implementing phone-free policies. Teachers report students are chattier. K–12 is looking more critically at ed tech: what’s developmentally appropriate at which ages, and what unintended consequences do we need to eliminate? There’s more social taboo around putting young kids in front of screens. Among wealthier families, we see a shift to Reggio and Montessori pedagogies and tech-light school environments. Economists often study the behaviors of the wealthy to predict diffusion. Right now, kids in those families spend less time on tech and more time in nature. I expect that to spread. I’m not anti-tech. It’s about intentional, developmentally appropriate introduction so tools can be used for good. 

K–12 is also revisiting how mental health is discussed. I study political partisanship, digital radicalization, and political violence. How that shapes a new generation is important. Economic conditions at labor market entry have lasting impacts on views of compensation, promotion cadence, and status. I’m very curious how current fluctuations will affect a new job generation as they find their financial footing.

JK: If you could offer one critical piece of advice to credit union executives on navigating generational dynamics over the next decade, what would it be?

KL: Take the time to see the world through the eyes of a different generation. The lowest hanging fruit is that credit unions are sitting on many underleveraged assets: the people you employ, the care you have for members. Find where your natural strengths intersect with the priorities of a new generation, then double down there. Many of those moves don’t require a huge lift.

JK: We’re coming to the bottom of our time. We have about five minutes left. Since this is my first time hosting, I’ll end with this. Is there anything I should have asked that I didn’t, or anything you’d like to add?

KL: Because it’s the two of us with intersecting interests, I feel like we covered a lot. We talked grade inflation, family dynamics, and more. Maybe we’ll get discontinued after this podcast because none of this made sense, but I had fun. I hope it was valuable. We’re both somewhat new to digging this deep into credit unions. It’s an honor to work with this industry. It’s fascinating to learn about, and we’re excited to help the industry share its strengths more effectively. There is real opportunity for growth. Helping credit unions see their strengths and what the market needs is key. If you’ve been in the industry a long time, it’s easy to lose sight of what makes you special and to overlook frictions that the broader market won’t tolerate anymore. We can play an outsider role to reflect back a clearer picture and help plot a strategic direction that gets you where you want to go.

JK: Has anything about credit unions surprised you?

KL: Yes. Many people inside credit unions can’t clearly articulate the difference between a bank and a credit union. If there’s internal confusion, no wonder the marketplace is confused. That surprised me.

JK: You need your story and you need to stick to it. Especially in nonprofit-like contexts, it’s about holding up the vision. Back to my church days, you can’t force volunteers to do anything. You keep a central message and vision so people know which direction to march and where they fit. That leadership strategy may be missing.

KL: Absolutely.

JK: Kim, it has been a true honor and privilege to talk with you. I don’t know if anyone else enjoyed it, but I had a ball. Yessica, our Filene contact, said I would enjoy talking with you, and I thoroughly have. I look forward to seeing you at big.bright.minds. in December.

KL: Wonderful.

JK: And hopefully we’ll see several of our listeners there as well in Nashville.

KL: Awesome. Thank you, Jerry.

Announcing!

Quinn Kinzler: And before we wrap up, a quick update for you all. In the new year, we will be relaunching the Filene Fill-In with a renewed focus on our Centers of Excellence. We’ll be featuring important conversations with our fellows and deep dives with guests who bring fresh insights into Filene’s core research.

To get you ready, we’ll be dropping a few bonus episodes after the Design for Digital Takeover, so keep an ear out for those and be sure to subscribe so the latest and greatest is always at the top of your feed every time we release. We can’t wait to share what’s ahead, and thanks so much for listening. We’ll see you soon on the Filene Fill-In.