In 1948, International Credit Union Day was created to celebrate credit unions around the world.
Since then, the third Thursday of every October has been dedicated to celebrating the advancements made in the credit union (CU) space, as well as what makes the member-owned nonprofit cooperative financial institutions so unique.
Thursday (Oct. 19) is the 75th anniversary of that day — and since the inception of the International Credit Union Day, CUs have evolved in substantial leaps and bounds, adapting to the changing financial landscape by offering new services, embracing technology and focusing on member-centric solutions and modern innovations.
Driving that change is the fact that, over the past seven decades, the payments industry and financial services sector have undergone so many changes as to be unknowable to a 20th century CU member.
Fortunately, the spirit of innovation is deeply rooted in CU’s commitment to putting members first — and the industry has successively proven over time that a member-centric approach can coexist with technological advancements and community engagement.
Read also: ‘Candid Conversations’ and Credit Building Help Consumers Survive the Paycheck-to-Paycheck Economy
Embracing innovation is one of the best ways for financial organizations to engage their current customers, while at the same time differentiating themselves in the marketplace to acquire new consumers.
And there exists a lengthy list of white-space opportunity areas across both payments infrastructure advancements and customer personalization strategies. On the payments front, innovations like open banking, real-time payments, programmable or smart payments, mobile device tap-to-pay, account-to-account payments, and even blockchain-based assets are helping financial institutions capture more customers and better serve those they already have.
To provide these services, over the past decade CUs have accelerated their digital transformation efforts by forming partnerships with FinTech companies to stay competitive in an increasingly tech-driven financial landscape.
“Now is a great time to double down on the innovation,” Brian Scott, chief growth officer at credit union service organization PSCU, told PYMNTS. “There are a lot of things that are coming next.”
Still, these advancements require financial institutions to adapt their systems and processes to meet consumers’ changing demands, which can prove to be challenging for smaller players that may not have the resources and technology available to quickly adapt.
Underscoring this is the fact that a decade ago, there were nearly 7,000 credit unions; now, that’s shrunk to about 4,700 — and PYMNTS Intelligence finds that strategic mergers among CUs are increasingly helping them find their footing and succeed in the face of today’s challenging macro environment.
While they present their own set of challenges, the continued shift to digital and omnichannel conduits through which consumers want to bank also present CUs with a unique opportunity.
“Financial education and financial wellness are two important areas for financial institutions to focus on right now — as is capitalizing on the emergent idea around delivering personalized and connected experiences,” PSCU’s Scott told PYMNTS. “Creating programs that are specifically designed for financial education for younger consumers is one area that I think credit unions can really excel at and should be excelling at in this case.”
By providing account holders with the knowledge and tools to make informed financial decisions, financial institutions can better serve their clients and build trust.
And PYMNTS Intelligence finds that over two-thirds of consumers (67%) prioritize trust over convenience when choosing a bank or financial institution.
“A lot of the younger generation get their financial information from social media,” and that channel is a greenfield opportunity for CUs to pursue and engage with younger consumers, and become “trusted advisors” across TikTok and other avenues of engagement to cement the thing that CUs do best — foster strong member relationships, Scott Young, managing vice president of emerging services at PSCU, told PYMNTS.
“If a credit union can innovate and grow organic product penetration while having those digital tools ready to attract net new members — that’s a recipe for sustainability,” Young said. “Now is not the time to slow down or stop the pursuit of innovation.”
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More