Strategies for Credit Unions to Build Member Relationships through Payments

December 5, 2022

Todd ClarkBy Todd Clark, President and CEO, Co-op Solutions

Fintechs are growing rapidly — faster than all other types of financial institutions — and are capturing more of members’ daily interactions. For example, between 2021 and 2022, PayPal experienced five times relative growth in PFR, Chime grew by a factor of 18, and both Robinhood and Mint quadrupled the number of respondents that identified them as their primary financial institution. 
 
But this evolution also presents credit unions with an opportunity—one they are uniquely positioned to serve. As consumers change their behavior and seek to obtain immediate funding closer to the point of sale, the ecosystems of lending and payments are rapidly converging. Through payments, credit unions can not only increase non-interest income, but also secure stronger member relationships and capture valuable behavioral data to grow their loan pipeline. 
 
A Gathering of Like Minds 
 
To explore these opportunities, Co-op Solutions facilitated a gathering of credit union chief executives for an inaugural CEO Summit. Over the course of several days, innovative credit union leaders from across the asset size and geographical spectrum gathered for deep conversations, thought-provoking speakers and the sharing of best practices to help set the path for the future of credit unions and the role they play in their members’ financial lives. 
 
Key takeaways from the summit included: 
 

  • Credit union CEOs are dealing with challenges on multiple fronts, including the need to diversify the earnings mix, demands to improve the member experience and an imperative to manage rising expenses. Often, they are attempting to address these challenges while shackled to an aging technology stack and receiving inconsistent levels of support from their boards and senior leadership teams. 
  • To address these pain points, credit union leaders are prioritizing investment in several key areas, leading with member-facing digital solutions, data optimization and developing talent for future needs
  • By focusing on a payments-first strategy with financial wellness as the driver, credit unions can tap an acquisition opportunity of up to 4.9 million new members

     
To secure this bright future, credit unions must embrace a new vision of service that meets the needs of today’s consumers. This vision includes offering anytime access to their financial lives through compelling, multi-channel digital solutions, coupled with a deep understanding of their needs through customized solutions designed to foster true financial wellness. 
 
Tapping Credit Union Leaders to Create a Blueprint for the Future 
 
In addition to the CEO Summit, Co-op regularly engages with credit union leaders through our Co-creation Councils and events like Co-op THINK. We also sponsor industry-leading research in partnership with EY and Filene Research Institute to identify the challenges and threats that credit unions face, and help develop solutions to capitalize on the movement’s strengths and opportunities. Our goal is to provide guidance to you, our credit union partners, and to continue to offer industry-leading payments and technology solutions to support the growth and sustainability of our industry. 
 
In the spirit of collaboration, we’ve distilled the robust conversations that began at the CEO Summit into a practical, actionable guide to help you get started in designing and building the credit union of the future—one that will stand for generations. 
 
Despite the challenges facing credit unions, the evolving landscape also illuminates a future of opportunity—one that will be transformed by the convergence of lending and payments. By developing a robust payments program, credit unions can not only increase non-interest income, but also secure stronger member relationships and capture valuable behavioral data to grow their loan pipeline. 
 
We at Co-op are here to help support the credit union movement as we together navigate this evolving journey toward the new member-centricity. 
 
To download your own copy of the Blueprint for Credit Union Leaders, visit https://insights.co-opfs.org/whitepapers/co-op-ceo-summit-blueprint .  

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