Cryptocurrencies have become a popular choice for consumers either seeking a novel, fast-moving and potentially lucrative investment opportunity or exploring alternative payment methods to fiat currency. This interest is particularly evident among credit union (CU) members, with a study finding that 26% of CU members hold some form of cryptocurrency.
It stands to reason that CUs could benefit from catering to this member base, and many have already taken steps to provide cryptocurrency services. This month’s PYMNTS Intelligence explores what members expect from their CUs when it comes to cryptocurrency and why CUs have added cryptocurrencies to their portfolios.
Cryptocurrency owners tend to be younger and more technology-savvy than average. A PYMNTS study found that millennials are most likely to own cryptocurrency at 59%, the largest percentage of any age group. This overlaps with demographics that value innovative products from their financial institutions (FIs), as 29% of CU members express a willingness to switch FIs to access such products. Younger consumers are more likely to be part of this group as well.
A plurality of CU members that own cryptocurrency prefer to stay with their FIs if they offer cryptocurrency services. According to the study, 49% of cryptocurrency owners said they are very or extremely interested in keeping their accounts with FIs that offer cryptocurrency products and services. In addition, CU members’ interest in being able to monitor and manage their external cryptocurrency holdings is inching upward, rising from 18% in the first quarter of 2022 to 19% in Q4 2022.
CUs also should consider the opinions of prospective members regarding cryptocurrency, in addition to those of existing members. PYMNTS research found that 33% of consumers who are very or extremely interested in cryptocurrency are willing to change their FI to access innovative products, representing an opportunity for CUs to expand their member base.
Credit unions are ahead of their traditional bank counterparts when it comes to cryptocurrency offerings. According to a 2023 report, 5% of CUs offer cryptocurrency investing services to their members, while another 5% plan to introduce them in 2023. By contrast, 1% of banks offer cryptocurrency, and another 1% plan to do so this year. Fifteen percent of CU executives, meanwhile, said they are very or extremely interested in introducing innovative cryptocurrency products for members, potentially pushing current figures even higher in the future.
CUs’ most valuable potential member base is the “crypto curious,” according to the Credit Union National Association. These individuals are interested in cryptocurrency but not to the extent that they would venture far from their comfort zone. They would be more likely to invest if their current CUs offered such services. Catering to this interest could be a gold mine for retaining members and building new revenue streams well into the future.