PYMNTS Intelligence: Leveraging the Credit Union Advantage

Credit unions have a secret weapon that some financial institutions (FIs) may struggle to attain: member satisfaction. CU members have higher-than-average member satisfaction rates, and of those satisfied members, 6% said convenience and ease of use of online banking capabilities are the top reasons they are satisfied and 5% cited convenience and ease of use of mobile banking capabilities as the most important reason.

There is a prime opportunity for CUs to gain new members from those who are looking not just for a transactional relationship but also a financial partner. Consumers more often expect the latest technologies, citing an average of 3.2 areas of interest when considering innovation, such as peer-to-peer (P2P) fund transfers and real-time payments.

Instant financial tools help attract younger members

A majority of young consumers want the latest on-demand features. Sixty-one percent of millennials and 59% of bridge millennials said they are very interested in real-time payments — a primary feature of on-demand banking. A major motivator behind this is ease of use and convenience, cited by 23% of respondents.

CU members who are interested in switching FIs are more likely to care about innovations such as mobile apps and P2P payments. Thirty-eight percent said they would switch FIs if their CUs did not allow them to deposit checks using a mobile app.

The importance of accessibility and ease-of-use to attract younger members cannot be overstated. Twenty-nine percent of bridge millennials consider the ability to use mobile banking when evaluating the quality of an FI’s innovations, for example, along with 27% of millennials, 25% of Gen X consumers and 24% of Gen Z consumers. Meanwhile, mobile banking matters to a mere 13% of baby boomers and seniors.

Offering consumers the immediacy they demand

Consumers are frequently reporting a desire to switch to FIs that can accommodate their need for instant payments, transactions and loan decisions. Twenty-four percent of CU members said they would switch FIs to access more innovative technologies, such as being able to deposit checks using a mobile app or P2P payments, for example.

More CUs are emphasizing innovation and working to grant members’ wish for mobile banking on demand. Currently, 60% of CUs report investing in innovative products such as real-time and P2P payments. This is an increase from 2021, when half of CUs said they invested in these areas.

In a world where consumers can order a ride with a couple taps on a phone screen or watch almost any movie they want on demand, it only makes sense that they want to manage their money with the same immediacy and ease. If CUs hope to keep pace with other FIs, investments to help meet these needs must be made.