Credit unions (CUs) in the United States have shown resilience throughout the pandemic, continuing to modestly expand their membership base and enjoying strong popularity. Industry research shows that 24% of US consumers choose UCs as their primary financial institution (FI), more than community banks or digital-only banks.
However, the retail banking landscape is only getting tougher. Digital-first consumers expect more advanced and seamless digital banking experiences, and want access to technologies like instant loan approvals and real-time payments. National banks and deep-pocketed FinTechs are innovating relentlessly, and it can be harder for smaller players to keep up.
In the June edition of Credit Union Tracker®, PYMNTS explores the state of digital retail banking from the perspective of UCs and their members, with a focus on what UCs need to do to keep their members happy and stay ahead of the competition.
Around the credit union space
UCs have a reputation for delivering higher customer satisfaction than for-profit retail banks, and new research from PYMNTS sheds light on the underlying dynamics. The survey found that 39% of CU members identify trust in their CU as the top reason for satisfaction with their FI, compared to just 22% of non-CU members. However, UC members were half as likely as non-UC members to cite ease of use of online banking as their top satisfaction factor, one of several data points indicating that CUs have room to meet the expectations of their members in terms of digital products. and services.
PSCU is innovating on multiple fronts to extend digital offerings to its members. CU partnered with Amount to deliver new credit card products, then expand to instant digital loan approvals, among other recent digital innovation efforts. PSCU has also just launched a cryptocurrency microsite that provides education and information about digital currencies, opening the door to potential crypto-related services. US federal regulations prohibit UCs from holding cryptocurrency in government-insured accounts, but the National Credit Union Administration has determined that UCs can offer crypto products as long as they comply with relevant federal regulations.
To learn more about these and other stories, visit Tracker’s News & Trends section.
Ent Credit Union on the Need for Agile Systems
A UC’s core digital infrastructure and processes are quickly becoming obsolete in light of rapid developments in the retail banking space. Continuing to develop and modify older systems keeps a CU running, but it gradually accumulates technical debt that makes it harder and less efficient to deliver new digital tools that members want. In this month’s feature, Tanan Miles, Senior Vice President of Electronic Banking for Ent Credit Union, explains the importance of adopting agile systems based on cloud platforms, with built-in A/B testing. new features and other processes that help the CU respond with agility to market changes.
PYMNTS Intelligence: where UCs stand on digital and what their members want
UCs largely benefit from higher average customer satisfaction among retail banking customers than traditional banks and digital-only alternatives such as neobanks. A recent survey found that consumers rate UCs three times more favorably than large national banks when it comes to putting customers ahead of profitability – but far more consumers choose the latter as their top FI. One of the reasons for this gap may be that UCs lag behind in digital innovation. For example, PYMNTS data shows that only 23% of UC leaders believe that real-time payments allow UCs to meet potential demand from their members. CUs must prioritize innovations such as instant digital cards to retain members in an increasingly digital retail banking market.
To learn more, visit the Tracker’s PYMNTS intelligence.
The Credit Union Tracker®a PYMNTS and PSCU collaboration, examines the latest developments in the UC space, focusing on the state of digital innovation by UC and the preferences of UC members.