Why Credit Unions Must Act More Like Big Tech to Keep Members Loyal

Evolving consumer preferences, accelerating digital adoption and a challenging economy have kept financial services providers on their toes in 2023. Consumers maintain a similar posture, with 51% interested in financial advice, according to a recent study. Credit union members are especially interested in innovative products, with 27% willing to switch where they hold financial accounts to find them — up from 17% in 2018.

CUs, however, are facing their own unique challenges in keeping up with their members’ appetites for innovation. According to PYMNTS’ research, CU leaders cite a lack of resources preventing them from rolling out innovative banking products. The number of CUs identifying as early launchers of new products dropped from 19% in Q4 2021 to 13% in Q4 2022. These factors have more than half of CUs partnering with consultants or credit union service organizations (CUSOs) to drive the product innovations that will keep their members satisfied this year.

The “Credit Union Tracker®” explores how CUs facing a challenging landscape in 2023 can stay competitive by personalizing financial account offerings across all member channels.

Around the Credit Union Space

To increase credit union member loyalty and shed their image as technology laggards, CUs need to invest in hyper-personalized digital experiences. CUs traditionally use internal data to predict member financial needs, but a “segment-of-one” approach — focusing on the individual rather than broad market segments — that capitalizes on multiple data streams can lead to better insights. Personalization is important to 72% of consumers, and 40% say they’re likely to switch to digital banking experiences that compare to online shopping.

However, nearly 60% of CUs are concerned about interest rates, with 47% worried about the cost of funds. To address liquidity concerns, CUs are prioritizing growing retail deposits and 30% plan on implementing real-time payments this year.

For more on these and other stories, visit the Tracker’s News and Trends section.

The Insiders’ View on How to Best Reach Credit Union Members

CUs are well-positioned to meet customers’ needs in difficult economic times by providing an essential human touch with omnichannel offerings.

To get the Insider POV, PYMNTS spoke with industry insiders to learn how CUs can leverage a wealth of data to develop solutions that resonate with members seeking greater support from their CUs.

Why Omnichannel Personalization Is CUs’ Mandate for 2023

Consumers expect seamless and personalized financial account experiences across channels, and CUs must prioritize omnichannel personalization to meet these demands. CUs can gain ground in omnichannel banking since just 1 in 10 financial institutions offer true omnichannel account openings for consumers and businesses. Personalization is a clear pathway for consumer loyalty, but enabling the right personalized products and services is challenging.

To learn why guiding members toward financial wellness will be a significant action for CUs in 2023, read the Tracker’s PYMNTS Intelligence.

About the Tracker

The “Credit Union Tracker®,” a collaboration with PSCU, examines why omnichannel personalization for financial accounts should be an innovation goal for credit unions in 2023.