Credit Union Members Won’t Patiently Wait for the Payments Innovation They Need Now

Credit unions cannot afford to put off innovation as consumers are willing to move their accounts elsewhere to get the enhanced payments capabilities they seek, says PSCU EVP and Chief Operating Officer Tom Gandre.

Credit unions have faced continue to face a challenging landscape shaped by macroeconomic concerns, coupled with the need to keep pace with evolving consumer demands and industry product innovations. Economic signals remain mixed, and the prospect of a recession remains top of mind. However, there are positive signals for credit unions. The 12-month inflation rate slowed in January, while unemployment hit a 53-year low. These encouraging trends extend to consumer card purchasing, with credit purchases up by 9% and debit purchases up by 7% year over year, according to data from the March edition of the  PSCU Payments Index.

While these numbers make a case for cautious optimism, credit unions (CUs) must remain vigilant while simultaneously monitoring and adapting to consumers’ changing payments expectations. The latest PSCU/PYMNTS  CU Innovation study found that 64% of members want their primary financial institution to offer more payments capabilities. According to the study, 27% say they would switch financial institutions to find product innovation, and this figure has been increasing steadily for four years. This comes at the same time credit unions are reporting they are scaling back their investments in innovation due to macroeconomic conditions.

These findings highlight that credit unions cannot afford to put innovation on the back burner in the midst of continued consumer card purchasing growth and members’ increasing willingness to move their accounts elsewhere in pursuit of enhanced payments capabilities. When faced with resource constraints and other barriers to development investments, leaders should prioritize areas of focus by leveraging data insights on member preferences and behavior. Fortunately, credit unions’ access to large amounts of data can help inform decisions on which products and services to bring to market.

Partnering with a credit union service organization or like-minded industry organization is an approach that credit unions should consider in order to confidently make these decisions in a cost-effective way. For example, as a financial technology solutions provider, PSCU supports credit unions on their respective innovation journeys by scaling leading-edge solutions to enhance the member experience. These enhancements often entail expanding the choice and variety of credit unions’ payments offerings while providing more personalized and connected experiences — ultimately driving member retention and card utilization.

Attracting and retaining members requires credit unions to strategically plan and invest in innovative digital product and service capabilities that meet members’ changing expectations. Even when motivated by economic uncertainty, scaling back on innovation means falling behind and potentially losing members to competitors. Today’s investments will ensure credit unions remain ahead of the curve and well-positioned to succeed regardless of the economy’s trajectory in the second quarter and beyond.