PYMNTS asked industry executives across the payments and digital commerce landscape to give us their take on the pivotal shifts, technological advancements and strategies that have shaped business in 2023. PSCU President and CEO Chuck Fagan says mergers and acquisitions are poised to continue influencing credit unions.
Set against a backdrop of rapid evolution and advancement, credit unions and other financial institutions had front-row seats to experience firsthand all the shifts and changes impacting the ever-changing payments landscape in 2023.
Underscored by an uncertain economic and geopolitical climate, the credit union and financial services industries have also been faced with interchange regulation, digital solutions dominating consumer consciousness, new players and solutions, evolving consumer preferences and more.
With a spirit of innovation and collaboration driving the credit union industry forward, alongside technologies reshaping the needs of credit unions, now is not the time to reconsider or slow investments in innovation. On the contrary, a policy of perpetual innovation is necessary to keep pace with not only other financial institutions, but also the many tech companies that have entered the financial services space in recent years.
As credit unions and other industry partners look to embrace innovation and invest in tools and technologies to meet the needs and expectations of today’s modern members, consolidation has become a prominent trend — and is poised to continue influencing credit unions and the ways in which they do business next year and beyond.
According to Credit Union Times, the first half of 2023 saw nearly 75 credit union merger and acquisition transactions. In August, the two major credit union trade groups, the National Association of Federal Credit Unions and the Credit Union National Association, announced their intent to merge. Then, PSCU and Co-op Solutions, two credit union service organizations and FinTech solutions providers, agreed to combine in late 2023.
The reason behind all this consolidation: Credit unions and other industry organizations are finding they are stronger together than they are apart. Per the August PYMNTS Credit Union Tracker, consumer satisfaction dropped slightly behind banks’ scores for the fourth year running (75/100 for credit unions compared to 78/100 for banks). With the rapid speed of change across the industry, many organizations are left with a difficult choice: merge with other like-minded organizations and combine resources or run the risk of being outshined by other financial institutions or FinTechs with more resources and capabilities to devote to innovation.
By coming together, not only are these organizations aiming to better position themselves for success, but they are also helping the credit union industry by maintaining membership, attracting new potential members and enabling increased investment on bigger-picture initiatives.
For PSCU and Co-op, for example, the combination is a transformative opportunity to bring together talented employees, complementary solutions, key partnerships and client relationships to create the premier FinTech solutions provider for credit unions. Not only will the combined organization be a more competitive player in the payments ecosystem, but it will also provide credit unions with integrated FinTech solutions that deliver personalized, connected experiences to members.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
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