Credit union (CU) members value the classic benefits associated with CUs, such as lower fees and more access to loan products. Still, PYMNTS Intelligence finds they also show more interest in seamless omnichannel banking, cash management tools and buy now, pay later (BNPL) than non-CU members. Like many digitally savvy consumers, CU members increasingly expect such advanced offerings. If missing, these consumers will switch to financial institutions (FIs) that are more up-to-speed on the latest innovations.
Research shows roughly 1 in 5 CU members switched their primary financial service provider in the last 12 months. The same goes for 1 in 5 nonmembers. What is driving this switching? The most influential factors involved convenience, including the lack of a local branch and insufficient or difficult online and mobile banking. CU members were likelier to report these shortcomings, indicating they want a streamlined physical and digital banking experience. Ongoing innovation in products and services can help CUs stand out in this highly competitive marketplace.
These are just some of the findings from “Growing Credit Union Membership via Lending and Omnichannel Banking Innovation,” a PYMNTS Intelligence and PSCU/Co-op Solutions collaboration. The report examines how innovating seamless omnichannel banking and personalized lending can help CUs retain current members while attracting new ones. It is based on a census-balanced survey of 4,525 U.S. consumers conducted between Nov. 2, 2023, and Dec. 6, 2023.
Other findings from the report include:
PYMNTS Intelligence found that 12% of members switched to their current CU primarily because their previous FI did not have branches nearby. Another 7.9% say they switched primarily because their previous FI did not have sufficient online and mobile banking. These findings highlight areas where CUs must innovate to reduce member churn and attract new members.
Traditional for-profit banks are known for being ahead of CUs when innovating digital banking and financial services. Still, CU members are more likely to value innovation than nonmembers. While 81% of CU members value innovation when selecting a financial services provider, just 74% of non-CU members say the same.
CU members report using more lending products than non-CU members. CU members prioritize personal loans and split-payment offerings when choosing an FI. This is also true when considering their innovation preferences in lending products. For instance, 25% of members want their CU to innovate personal loans, and 21% want innovations on auto loans in the next three years. CU members are also hungry for BNPL innovations, with 17% saying they want their CU to innovate BNPL in the next three years. CUs can reduce member churn and engage new members by offering innovative personal loans and BNPL.
CUs must invest in ongoing innovation, omnichannel banking and convenient branch access as they formulate member growth initiatives to compete. Download the report to learn the banking innovations CUs must implement to retain existing members and attract new ones.
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