The Credit Union Growth Play That Isn’t About Getting Bigger

As consumers increasingly expect banking relationships to combine specialized expertise with digital convenience, financial institutions face a difficult question: how can they preserve the distinct communities that built their franchises while assembling the scale needed to compete in a technology-driven market?

That ambition sits at the center of Cardinal Credit Union’s recently announced combination with Cleveland-based NoteWorthy Federal Credit Union, an institution best known for serving musicians and artists through specialized lending programs.

In a conversation with PYMNTS, Cardinal Credit Union President and CEO Christine Blake said the rationale extends well beyond adding assets or expanding territory. Instead, she framed the combination as an effort to strengthen a unique member community while providing broader access to banking services, digital tools and financial resources.

“We thought that that was just a unique opportunity for Cardinal,” Blake said, noting that the institution serves a market segment that remains relatively underserved by larger financial providers.

Preserving a Niche While Expanding Services

The combination will bring NoteWorthy’s members into the Cardinal organization, but Blake said the objective is not to erase what made the institution distinctive.

While the Cardinal name will ultimately remain, the musician-focused lending programs and specialized approach that defined NoteWorthy will continue.

“There’ll be some things that change because of the combination,” Blake said. “But we will certainly be keeping the pieces and the parts that are niche to them.”

For musicians, artists and performing arts organizations, access to specialized financing can remain difficult through traditional channels. Cardinal believes those relationships can be preserved while adding a wider range of services.

Blake pointed to the institution’s digital banking investments as one example. Cardinal’s online banking platform, introduced roughly two years ago, was designed to support a broader set of integrations and services, allowing members to access new capabilities without navigating multiple disconnected systems.

The larger industry lesson may be that technology alone is becoming less of a differentiator. Increasingly, institutions are seeking to combine modern digital capabilities with specialized expertise that larger competitors may not easily replicate.

Why Branches Still Matter

The transaction also arrives amid continued debate over the future of physical banking locations.

Transaction volumes continue to migrate toward digital channels, and Cardinal has invested heavily in upgrading both its technology stack and branch network. Yet Blake rejects the notion that branches have become irrelevant.

Instead, she sees them serving a different purpose.

“The advantage is still branding,” she told PYMNTS. “People still want to be able to know, ‘Hey, if I want to go in, I want to know that it’s there.’”

Consumers may deposit checks, transfer money and apply for loans digitally, but many still value the reassurance that comes from knowing a branch and a trusted advisor remain available when needed.

For Cardinal, the branch strategy reflects that balance. The institution has completed a multi-year effort to modernize nearly its entire branch network while simultaneously expanding digital capabilities.

The result is a model that treats digital and physical channels as complementary rather than competing assets.

AI Moves From Curiosity to Use Cases

The same measured approach characterizes Cardinal’s thinking on artificial intelligence.

Despite growing discussion about AI-powered banking experiences, Blake said member demand is not centered on the technology itself.

“They want the services delivered as quickly, as efficiently with the best experience as possible,” she said.

As a result, Cardinal’s initial AI efforts are concentrated behind the scenes.

The credit union recently launched a controlled internal pilot using Microsoft’s Copilot platform with a small group of employees. Participants completed training and identified specific business applications before receiving access. Potential use cases include operational workflows, accounts payable functions and administrative processes.

Blake said the institution is proceeding deliberately because of the responsibility financial institutions carry in protecting member information and maintaining strong governance around data.

The next stage may involve AI agents designed to automate specific internal tasks, but only after the institution determines appropriate use cases, governance standards and technology partners. For credit unions broadly, that measured posture may prove as significant as the technology itself.

Watch the Full Interview to Hear More About:

Why Cardinal viewed musician-focused lending as a strategic fit.

How digital banking capabilities factored into the NoteWorthy combination.

Where branches continue to provide value despite rising digital adoption.