NEW REPORT: The Credit Union’s Biggest Risk — Not Taking Risks

Credit unions are risk-averse institutions by nature. But if credit unions don’t take a gamble on new financial innovations, they are inadvertently taking on another type of risk altogether: Being considered financially irrelevant by members and alienating potential new customers.

Some credit unions are pushing back against the industry’s image as antiquated by investing in new innovations — and are doing so with their members’ backing. The latest PYMNTS Credit Union Tracker™, powered by CO-OP Financial Services, features news on the how FinTechs are stepping up their financial innovation efforts, the latest developments that affect market regulations and notable partnerships in the sector.

Notable Recent News from Around the CU World:

Not all credit unions (CUs) are wary of innovation. In fact, the credit union market recently gained a new advocacy organization specifically devoted to getting CUs to invest in an emerging payment technology. That organization is the CULedger, which initially launched in 2016 as a proof-of-concept project to develop a CU-focused distributed, shared ledger platform. CULedger recently announced its plans to form a new credit union service organization (CUSO) that will be majority-owned by member CUs and will focus on getting CUs to participate in shared ledger technology and to look for ways for the new solutions to better serve the industry.

Meanwhile, some companies that specifically cater to the credit union market are turning to data analytics to help CUs innovate and gain new insights into member needs and behaviors. In one recent notable development, CUNA Mutual, a mutual insurance company that serves the credit union market, recently launched its AdvantEdge Analytics division, which will focus on helping CUs adopt advanced analytics solutions. With these insights, the company can help CUs find new ways to address customer needs. A few high-profile CUs, including Baxter Credit Union, Coastal Credit Union and Randolph-Brooks Federal Credit Union, have already signed on for the service.

Other CUs launched services that make it easier for its members to keep in touch. One such notable development in customer service came from Xtend, Inc., a credit union based in Grand Rapids, Michigan. Xtend recently rolled out a new inbound contact center return call feature that allows members to request a call back instead of waiting on the line listening to hold music. Xtend’s CEO said in a statement that the goal of the service is to “restore members’ faith” in the CU model by quickly returning members’ calls.

For all the latest notable news and trends from around the credit union space, download the Tracker.

Fighting the CU ‘Mom and Pop Shop’ Image Problem

With each new adopted innovation, a credit union also takes on the risk of failure before reaping the potential rewards. But credit unions that don’t or are not willing to take risks on innovation could fall behind in terms of their technological offerings and be rendered financially irrelevant by members and potential new customers. For the August Tracker’s feature story, PYMNTS spoke with Brian Ziff-Levine, director of cards and payments for First Tech Federal Credit Union, who shared the lessons First Tech has learned from serving members in the tech-heavy heart of Silicon Valley, including members who work for Google, Amazon and Intel, among other big-name companies. Ziff-Levine said CUs need to be comfortable with risk and explore innovative solutions, or the industry could wind up stuck with a “mom and pop shop” reputation.

To read the story, check out the August edition of the Credit Union Tracker™.

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About the Tracker 

The PYMNTS Credit Union Tracker™, powered by CO-OP Financial Services, serves as a bimonthly resource for staying up-to-date on the most significant trends and developments across the credit union market.