Credit union members are more loyal than customers at most financial institutions (FIs), but cementing that allegiance means offering innovative products and services based on new technology.
While credit union members are less likely than customers of other FIs to walk if they’re not offered the latest digital solutions, they still want the newest innovative offerings, according to the report “Credit Union Innovation: The Race To Meet Consumer Demand,” a PYMNTS and PSCU collaboration.
The report shows that 31% of FI account holders would ditch their current provider for another that offered more cutting-edge products and services, while just 24% of CU customers would switch for that reason.
Although customers are more loyal to credit unions than other FIs, the race to keep up with the latest and greatest offerings is very much on the minds of CU executives, 39% of whom are pivoting from new product development to adding fresh features to existing services, according to the report. New product development priorities dropped to 18% in 2022 from 21% in 2021.
While CU members are less likely to walk over the lack of new products, the average CU member cites 3.23 areas for innovation that piqued their interest, up from 2.95 in 2021, per the PYMNTS report — slightly higher than FI customers pointing to 3.22 areas this year on average.
Customers from both CUs and FIs said they are looking for expanded payments capabilities and are also concerned about data security and protection from account fraud.
CU executives are putting investments into innovating payments, with 60% putting money into products like P2P payments, up from 50% in 2021. Efforts in mobile banking among CU executives, however, have declined since 2021, with 60% investing in the technology now from 74% a year ago.
When it comes to using and engaging with accounts, 20% of all FI account holders use only digital channels, up 13% from last year. Eighteen percent of CU members use only digital and 16% only go to a branch. The remaining 66% use both digital and physical branches and tend to switch back and forth, per the report.