Credit unions (CUs) have typically held a different reputation than traditional banks and FinTech companies.
Traditional banks enjoy massive resources and an institutional presence, while FinTechs represent a relatively new class of organizations that puts extra emphasis on digital capabilities.
CUs — long known for their customer loyalty — have begun working to amend their reputation, however, and position themselves as digital innovators as well.
When it comes to successful digital innovation, cooperation is key. Of the CU executives PYMNTS surveyed, 42% said it is essential to work with outside vendors to ensure the successful rollout of new digital services, and 40% said the same about credit union service organizations (CUSOs).
Paying attention to member feedback and letting it guide new digital services is also crucial, but this attitude has begun to wane recently.
In 2018, 22% of CU executives said it was important to have processes that let members make suggestions, and this number rose to 55% two years later, only to shrink back to 48% in 2021. This change could suggest there is a growing familiarity on the executive level with digital processes and more confidence in making the right decisions.
This growing belief in CUs’ abilities to innovate independently is also illustrated by CU executives’ views on homegrown digital products. Just 15% of respondents said they wished to build their own products in 2018, while a quarter of CUs said the same in 2021.
The embrace of digital tools is important at a time when consumers are rejecting financial institutions (FIs) that don’t offer them the exact digital options they want.
In 2018, 19% of customers considered changing FIs due to digital innovation. PYMNTS’ research found that 24% were willing to switch in 2021. While most customers still tend to stand by their primary FI, this number of stalwarts shrinks each year, and it may not be long before most consumers have no trouble making the switch.
The exact digital innovations that consumers consider when deciding to change FIs vary greatly, as there are dozens of available options. Among the most popular are loyalty and rewards offerings, with 35% of willing-to-switch consumers saying it is an area of interest. Other popular innovations include fraud protection, data security, mobile banking capabilities, and real-time payments.
For a closer look at PYMNTS’ findings, download the latest Credit Union Innovation Playbook, a PYMNTS and PSCU collaboration.