Primary accounts are the mainstays of banking, as they are the accounts where savings and checking activity are concentrated. The data accompanying the inflows of paychecks (in the case of individual banking clients), customer payments, and supplier payments (in the case of commercial activity) can be used by credit unions to craft new products and services. 

These accounts also give banks the capital that they need to lend out into the community at large, with a multiplier effect that improves the financial standing of stakeholders well beyond the confines of the bank itself.     

Fine-Tuning Digital Initiatives

In the PYMNTS Intelligence report done in collaboration with Velera, “The Credit Union Advantage: Seven Trends Driving Future Growth” we found that credit unions have been fine-tuning their approaches to digital innovation, which in turn attracts both consumers — especially younger consumers. 

Those consumers are also business owners and entrepreneurs, so the potential is there for the bank to establish a duality of primary account: for both the individual’s personal financial holdings and for the business accounts themselves.

There’s particular promise in engaging digitally with microbusinesses, which are the smallest corporate banking customers and which have the potential to grow into larger businesses, given access to capital and to the digital tools that help them manage their financial lives in real time (including with commercial cards).

More CUs are forging ahead with mobile-centric rewards tied to those cards, digital payments and budgeting and transaction management offerings. The share of CUs with 10 or fewer branches taking a “laggard’s” approach to innovation decreased significantly to just 11% in 2024 from 47% two years earlier.

We mentioned that consumers are also business owners: CUs have a 64% conversion rate of memberships to primary accounts among consumers, which indicates success in garnering the loyalty and dollars of those individuals.

But only 7.7% of small businesses use CUs for their primary accounts, and 82% have never had contact with a credit union — so this is a greenfield opportunity, as another 7.7% of smaller firms (we surveyed 2,000 of them) have at least some relationship with a CU.

The familiarity, combined with digital innovation, can conceivably get these smaller companies to switch their primary accounts to CUs. Twelve percent of the smallest firms, with $250,000 or less in annual revenues, opt to house their primary accounts within CUs — but 80% of them have never had accounts with credit unions. 

What SMBs Want

Some 55% of CUs plan to innovate self-service digital solutions, such as mobile banking and digital onboarding, within three years, so there’s likely to be more digital innovation on the horizon.

The data shows that top-performing CUs invest an average of 5.6% of their assets in innovation and have a member churn rate of 1.7%, compared to 3.1% investment and 3.3% churn among bottom performers. The less churn there is, the more likely it is that getting customers to move toward “primary account status.” 

The small businesses themselves offer up a roadmap: PYMNTS Intelligence and Velera found that 23.7% of smaller firms have conveyed that “must have” features must include robust security offerings and 22% have said they want self-service solutions.

The post Credit Unions Capitalize on Consumer Trust to Boost Growth appeared first on PYMNTS.com.

Those who were fired are Todd Harper and Tanya Otsuka, Reuters reported Wednesday (April 16), citing separate statements from the two former board members.

The report also cited White House Press Secretary Karoline Leavitt, who said, per the report, “President Trump is the chief executive of the executive branch and reserves the right to fire anyone he wants.”

Harper was appointed to the NCUA by President Donald Trump in 2019 and was reconfirmed in 2022 to a term that was not due to expire until 2027, according to the report.

He said in a statement, per the report: “This ill-conceived and politically motivated decision to fire me before the end of my term upsets that important regulatory balance and will harm consumers.”

Otsuka was nominated by then-President Joe Biden and confirmed by the Senate in 2023 and was serving a term that was to last until 2029, per the report.

She said in a statement, per the report, that the firing is “yet another attempt to undermine the rule of law and blatantly ignore Congress and our democratic values.”

Axios, which also reported on the firings of Harper and Otsuka, said that there are currently no Democrats on three boards of three regulators that were designed to be bipartisan: the NCUA, the Federal Deposit Insurance Corp. and the Federal Trade Commission.

Sen. Elizabeth Warren, D-Mass., the ranking member of the Senate Banking Committee, released a statement Wednesday saying that the firings at the NCUA is part of a “continued attack on American consumers.”

“This is the latest attempt by Trump to skirt the rule of law, undermine independent agencies and illegally purge the government of those who work for the American people,” Warren said in her statement.

The Financial Stability Oversight Council said in December that the NCUA is one of the agencies that Congress should ensure have the examination and enforcement powers they need to oversee their regulated entities’ third-party service providers.

The post Trump Fires 2 Board Members of National Credit Union Administration appeared first on PYMNTS.com.

The new Risk Mitigation Service Model is designed to accommodate credit unions’ unique risk tolerances and needs, allow them to keep their existing products or risk solutions, and streamline service delivery, the credit union service organization (CUSO) formerly known as PSCU/Co-op Solutions said in a Tuesday (April 15) press release.

“Our new tiered approach empowers credit unions with flexible service offerings to engage with the Velera Risk Solutions team at a level that matches their organization’s current and future needs as their tolerance shifts or changes in response to evolving fraud trends and threats,” Velera Senior Vice President of Risk Solutions Karen Postma said in the release.

The new Risk Mitigation Services Model includes three tiers, with each one building upon the offerings of the previous tier, according to the release.

Essential provides 365 coverage, insight on fraud trends, daily support according to the organization’s needs, and the establishment of global rules, the release said.

Premier includes those offerings and adds a layer of elevated fraud prevention that includes an assigned analyst to collaborate on fraud trends and rule suggestions, and daily review of fraud cases, rules and recurring touch bases, per the release.

The third tier, Enhanced, includes the offerings of the first two tiers and adds a dedicated risk consultant to manage the credit union’s entire fraud experience.

Customers that already have Velera fraud services will not need to take any action unless they want to change their service level.

In a challenging fraud landscape, credit unions are adopting advanced technologies and forming strategic partnerships to protect their assets and educate their members to maintain trust, according to the PYMNTS Intelligence and Velera collaboration, “Scam Surge: How Credit Unions Are Tackling Rising Security Threats.”

The report found that in addition to investing in fraud detection/mitigation technology and educating their members about common scams, credit unions are forming partnerships to strengthen their defenses against fraud.

Forty-two percent of credit unions prioritize fraud reduction when collaborating with FinTech companies, per the report.

The post Velera Introduces Tiered Fraud Service Model for Credit Unions appeared first on PYMNTS.com.

The checking and savings accounts housed in primary financial institutions (FIs) provide the on-ramps, so to speak, for individuals to take their money and invest it with the likes of Robinhood, particularly as cryptocurrencies become more mainstream alongside traditional equity trading.

Todd Clark, newly named president and chief operating officer at digital investing platform InvestiFi told Karen Webster that consumers, especially young consumers, want to invest with their primary FIs. For forward-thinking banks that offer a seamless continuum between checking accounts and investment accounts, where the former funds the latter, as well as financial literacy education (to invest and save responsibly), the opportunity exists to expand their financial services ecosystems.

“There are a lot of credit unions that already have investment solutions, but they are mostly advisory-based solutions,” Clark said. “Your typical advisor does not get involved with someone until they have $25,000, $30,000 or $50,000 in their account. But there are many people out there who are actively seeking pathways to invest $5,000 or $7,000, and they don’t need an advisor. They want to do it on their own.”

That’s why they move their money to Robinhood and SoFi.

Expanding Beyond Crypto

InvestiFi offers digital investing solutions to banks through a white-label platform that integrates with FIs’ existing infrastructures, and FIs brand those services as their own.

Clark’s new tenure with the firm comes after a stint as CEO of CO-OP, which merged with PSCU, now Velera. His time on the board of InvestiFi came amid his taking a year off from full-time work in the wake of the merger.

InvestiFi, for its part, has moved beyond its roots earlier this decade, enabling crypto trading to its status as an InvestTech platform that allows trading across a host of asset classes to be conducted from deposit accounts.

“We’re signing up a credit union or a community bank a week now,” Clark said.

For banks, the economics of the self-directed model are tied to the fact that customer funds are kept in-house.

“The only time [the money] is not on the credit union balance sheet is when it is actually being held in a stock or in a crypto asset,” Clark said. “…They see the money coming and going, rather than going [out to other investment platforms].”

Robinhood, for example, made $1 billion last year from the cash sitting in investment accounts, “and we’d rather see that cash sitting in credit unions and banks’ accounts rather than at some party,” Clark said. Core deposits, after all, are the least expensive deposits that FIs can have — and those deposits fund the rest of the business.

Asked by Webster about the profile of the credit union that is embracing the platform, Clark said InvestiFi has the top 20 credit unions among its roster of customers but also has been signing up “$150 million credit unions on the regular. The solution is easy to implement and to master. If they already have advisory services, we’re helping them target the people with between $1,000 to $20,000 who want to open up an account, invest small dollar amounts, or experiment with crypto for the first time.”

That profile nearly encapsulates young banking customers — millennials and Generation Z — who expect a digital, app-driven experience.

InvestiFi’s roadmap includes expanding the securities trading functions that were launched last fall and the robo advisor that debuted this year. The company will also be moving to IRAs.

“We’re spending a lot of time with connections to banks’ cores and will continue to build out our platform,” he said.

There’s also the potential to offer leads to brokers that are already connected to credit unions in what Clark said, “is a partnership with them, and not a competitive environment.” In the meantime, there are training and financial education videos embedded within the platform and solutions extended to end users.

The potential is vast, as there are thousands of credit unions still to be connected to InvestiFi’s platform, which can scale easily as volume and processing demands, he said.

“The vast majority of people would like to invest like this with their credit union,” said Clark, who told Webster, “There’s a huge component of trust with those banks … we’re here to stay.”

For all PYMNTS digital transformation coverage, subscribe to the daily Digital Transformation Newsletter.

The post InvestiFi President: Credit Unions Must Offer Digital Investing to Retain Gen Z appeared first on PYMNTS.com.

Unquestionably, winning over younger members demands digital innovation and mobile-driven strategies. However, research suggests that it also requires targeted outreach toward digital natives, who may be less aware of credit unions as a banking option. In fact, digital-first strategies — essential as they are — may not be sufficient to convert a new generation of consumers without meeting them in the channels they frequent. Critically, credit unions that both innovate and communicate their advantages to younger generations could avoid ceding further ground to other FIs in capturing these key demographics.

• CUs Face Aging Membership as Gen Z Leans Toward Banks
• Unfamiliarity Keeps Gen Z From Joining CUs
• Digital Features Drive Gen Z’s Expectations
• How Credit Unions Can Stay Relevant

[branded_divider]

CUs Face Aging Membership as Gen Z Leans Toward Banks

Credit union members skew older than bank customers, with baby boomers outnumbering millennials and Gen Z combined. Attracting younger members is vital to long-term CU viability and growth.

CU leaders agree that Gen Z engagement is critical but unevenly executed.

CULytics data indicates that while 80% of CU leaders see attracting younger members as “extremely important,” only 40% report real traction with this consumer segment — highlighting uneven progress across the sector. Without addressing this imbalance, CUs risk significant market share erosion as older members retire and their borrowing needs decrease. Banks attract younger consumers by offering seamless mobile experiences and simplified onboarding — areas where many credit unions still lag. However, PYMNTS Intelligence and other research identifies an even more basic explanation for the trend: a lack of Gen Z familiarity with credit unions.
[branded_divider]

Unfamiliarity Keeps Gen Z From Joining CUs

Gen Z lags behind older consumers in credit union engagement, with a lack of familiarity posing a key obstacle to membership for this demographic.

A large portion of Gen Zers are unaware of CUs as a banking option.

To remedy this, digital discovery and embedded banking can expand CUs’ reach with Gen Z. Many Gen Zers expect fast, branch-free account setup. Embedded banking — such as offering account opening via college portals — can help CUs meet digital expectations and reach younger users where they already are.

Targeting youth early can help close generational gaps.

One specific strategy CUs are taking to bridge generational gaps is by rolling out new tools for kids and teens to build brand familiarity early. Kachinga’s white-labeled app, for instance, directly integrates with credit unions’ core systems to offer family-friendly financial tools that teach budgeting and saving. In addition, initiatives like Credit Union Youth Month — ongoing every April — reinforce these strategies, aiming to build loyalty from childhood on and ensure long-term membership stability.

A FinTech-CUSO partnership aims to convert Gen Z borrowers into lifelong CU members.

Another effective strategy for reaching younger consumers is to develop solutions targeting their specific needs and concerns. Credit union service organization (CUSO) Envisant’s new partnership with FinTech Sparrow, for example, helps its client CUs address Gen Z’s student loan challenges. The initiative offers fast onboarding and tailored support for younger borrowers.

Notably, 70% of users engaging via CU channels were nonmembers who later expressed interest in joining, signaling a clear path to membership growth. With Gen Z representing one of the largest and most influential emerging demographics, strategically targeting this segment can substantially increase its engagement. However, solutions such as these also showcase the first necessity of engaging younger members: meeting these consumers’ digital-first expectations.
[branded_divider]

Digital Features Drive Gen Z’s Expectations

Gen Z expects fast, mobile-first financial tools. Credit unions looking to stay competitive must offer the digital payments, seamless authentication and app-based credit card management these consumers demand.

CUs still struggle with digital experience and loyalty-building for younger members.

In the CULytics survey, all CU leaders cited seamless digital experience and FinTech competition as top challenges. Sixty percent also pointed to difficulty building loyalty and engagement with Gen Z and millennials, highlighting the broader strategic gaps credit unions must address to attract and retain younger members.

In fact, Gen Zers appear to see more value in banks as their digital expectations grow. Just 49% of Gen Z credit union members say their CU offers strong value, compared to 60% at big banks. As digital demands rise, younger consumers increasingly associate value with mobile features, seamless authentication and spending control — areas where banks are pulling ahead of many CUs. FinTech companies and digital banks already excel in these mobile innovations, only adding to the pressure on credit unions to act swiftly.

Velera is simplifying card updates to streamline digital payments for CUs.

As in the earlier Envisant-Sparrow example, credit unions can gain a leg up in digital innovation by tapping into CUSOs and other third-party solutions. Velera’s new Card on File feature, for example, allows CU members to update payment credentials across more than 115 merchants in one step. This feature removes friction from digital payments, boosts card usage and helps credit unions meet Gen Z’s expectations for seamless, app-based financial experiences. Mobile-first solutions not only satisfy Gen Z’s need for convenience but also offer greater security and real-time financial control — features crucial to younger users.
[branded_divider]

How Credit Unions Can Stay Relevant

Younger generations invariably demand seamless, mobile-first financial experiences, so credit unions must urgently modernize digital offerings. However, modernization alone could still fail to engage younger consumers who remain largely unaware of credit unions as an option. CUs must therefore tailor outreach strategies to meet Gen Z and other younger age groups on familiar platforms.

PYMNTS Intelligence offers the following strategic roadmap for CUs to preserve relevance and expand membership with younger generations:

• Prioritize competitive digital innovation. This includes mobile functionality, biometric authentication and spending controls. Align CU digital offerings with — or surpass — those of FinTech and bank competitors to attract younger users who increasingly equate digital excellence with value.
• Innovate solutions aimed directly at younger consumers. Introduce mobile-driven tools like card management apps, embedded account opening and automated payment credential updates. These solutions offer the security and convenience younger consumers expect. Consider developing solutions that solve generation-specific challenges, such as student lending.
• Target informational outreach toward key demographics. Launch campaigns via digital channels, partnerships with FinTech providers and educational institutions to enhance Gen Z awareness. Strategic outreach efforts represent high-impact investments for long-term membership growth.

Credit unions that take proactive steps to meet the expectations of digital natives and effectively convey their value can build lasting loyalty with younger generations.

Winning the loyalty of younger consumers begins with building lifelong relationships. Supporting members at every stage of their financial journey is key — from their first checking account in college to buying their first home or saving for their child’s future. It starts with meeting younger members where they are — digitally. By offering instant digital cards, rebranding checking accounts as spending accounts, and providing rewards on things they already use like food delivery and streaming services, we’re making sure we’re at the front of their wallet and the center of every financial milestone.”

The post From Aging to Z: How CUs Can Capture Younger Generations appeared first on PYMNTS.com.

The “Credit Union Advantage: Seven Trends Driving Future Growth,” a collaboration between PYMNTS Intelligence and Velera, paints a picture of a sector adapting to the demands of members and small businesses. By investing in digital capabilities and focusing on areas like self-service and mobile engagement, credit unions are fortifying their existing member relationships and laying the groundwork to attract the coveted younger generation.

The report surveys credit union executives, consumers, and small to mid-sized businesses, revealing seven trends that underscore the sector’s dynamism. Credit unions, including smaller institutions, are demonstrating a shift toward innovation, a departure from previous perceptions.

This surge in innovation is coupled with an ability to cultivate primary account relationships, indicating a strong foundation upon which to build enhanced digital experiences. Furthermore, investments in technology and member experience are proving to be directly correlated with stronger member retention, highlighting the tangible benefits of this digital transformation.

Key data points underscore the digital focus among credit unions:

• Fifty-five percent of credit unions are planning to innovate self-service digital solutions like mobile banking and digital onboarding within the next three years, recognizing the importance of meeting member expectations for digital interactions.
• Larger credit unions are leveraging partnerships to accelerate their innovation agendas. Those with over $5 billion in assets are, on average, developing 8.4 products and features either fully or partially through collaborations with third parties, indicating a willingness to embrace external expertise to enhance their digital offerings.
• Credit unions are keenly aware of the need to cater to younger demographics, with 21% of Generation Z consumers identifying mobile credit card management apps as a priority innovation, signaling a clear demand for sophisticated mobile-driven features.

Beyond these digital-centric trends, the report highlights other compelling advantages for credit unions. Notably, they boast a 64% conversion rate of memberships to primary accounts among consumers, demonstrating a deep level of trust and engagement.

Moreover, microbusinesses show a greater inclination to use credit unions as their primary financial institution, with 12% reporting them as their main FI.

Perhaps most significantly, the data reveals that top-performing credit unions, those investing an average of 5.6% of their assets in innovation, experience a lower member churn rate of 1.7%, compared to bottom performers with a 3.1% investment and a 3.3% churn rate. These figures underscore the wisdom of investment in innovation and member experience as drivers of long-term success for credit unions.

The post Credit Unions Convert 64% of Members to Primary Accounts appeared first on PYMNTS.com.

While financial incentives remain the top reason consumers and businesses choose a primary payment card, many CU cardholders prioritize spending control tools over cash back or lower interest rates. With 20% of CU users citing these features as a key decision-making factor — 25% more than national and digital-only bank users — it’s clear that financial management capabilities are a growing differentiator.

Yet despite these strengths, CUs may be leaving some opportunities on the table. High-income consumers and millennials are less likely to put their CU-issued cards at the top of their wallets, and rewards programs offered by national and digital-only banks continue to draw consumers away. So, how can CUs bridge the gap?

In “Credit Union Innovation Readiness Index: The Path to Top-of-Wallet Conversion,” a PYMNTS Intelligence and Velera collaboration, we surveyed 12,081 U.S. consumers and 2,000 U.S. SMBs to understand their card usage and the factors influencing their top-of-wallet card choices.

Inside the Playbook:

• Analyze how CUs achieve higher top-of-wallet conversion rates among SMBs and Gen Z than their competitors.
• Uncover the unique motivations behind CU cardholders’ choices, including the importance of spending control tools.
• Explore how consumers and SMBs use CU-issued cards most often for essential purchases, like groceries for consumers and operational costs for SMBs.
• Discover why high-income consumers and millennials are less likely to prioritize CU cards and what CUs can do to reverse this trend.
• Examine strategies that CUs can implement to enhance their rewards programs and better compete with national banks and digital-only players.

This report paints a clear picture: Credit unions have a unique opportunity to expand their influence by building on their strengths. Their high top-of-wallet conversion rates among Gen Z and rural SMBs prove consumers value more than just rewards — they appreciate financial control. However, to stay competitive, CUs must refine their offerings for high-income earners and millennials, who are more likely to be swayed by premium rewards and digital-first experiences.

By improving incentive programs, enhancing digital tools and refining their outreach strategies, CUs can elevate their position in the financial services industry. Dive into the full report to uncover actionable insights to drive top-of-wallet success for credit unions in 2025 and beyond.

About the Credit Union Innovation Readiness Index

The “Credit Union Innovation Readiness Index: The Path to Top-of-Wallet Conversion,” a PYMNTS Intelligence and Velera (formerly PSCU/Co-op Solutions) collaboration, examines consumer and SMB CU card usage and the factors influencing their top-of-wallet card choices. The playbook is based on a census-balanced survey of 12,081 U.S. consumers conducted from Oct. 21, 2024, to Nov. 20, 2024. This study was complemented by a survey of 2,000 small to medium-sized businesses (SMBs), which was conducted from Oct. 23, 2024, to Nov. 20, 2024.

The post Credit Unions Prove Spending Control Drives Top-of-Wallet Success appeared first on PYMNTS.com.

During uncertain times, innovation can take several forms, with new products and services delivered digitally. Serving the member means meeting individuals where they want to be met — and right now they want a bit of guidance from their CUs.

Chuck Fagan, president and CEO of credit union service organization Velera, told Karen Webster that consumers’ mindsets have been “chaotic these past six months — sentiment is up and down. There are pockets where the consumer is feeling pretty strong about things, but there are also pockets where there are general concerns” on topics ranging from tariffs to inflation.

“What we’ve seen in terms of delinquencies ticking up, it’s still not at crisis level, and consumers are managing well,” he said.

However, if the message during the presidential campaign was that prices were going to come down — eggs are but the poster child here — well, that’s going to take time.

Consumers are recalibrating what they can spend, and where, and trying to figure out how to get things ready should the proverbial rainy day come.

“For credit unions, this is a prime-time opportunity to provide financial education — including budgeting tools,” Fagan said.

There is appeal in offering high yield checking and savings accounts (where in some instances, yields are north of 5%), and banking clients don’t have to tie up their money in CDs to get similar returns.

Uncertainty for Credit Unions Too

The uncertainty of the current environment extends to CUs themselves, where the Community Development Financial Institutions (CDFI) Fund was the target of a new executive order from President Donald Trump last month. Trump ordered the CDFI Fund be “eliminated to the maximum extent consistent with applicable law.” The Credit Card Competition Act may resurface in the current Congress, throwing the economics of interchange fees into a bit of doubt. The fate of the Consumer Financial Protection Bureau is a wild card.

“We’ve been caught up in a consolidation of regulators, and the CFPB, if it’s re-emerged, will certainly have a different focus,” Fagan said.

That focus might more fully be on fraud, which continued to grow at heady rates, with no slowdown in sight.

“If they really wanted to make a difference for the consumer by hunkering down on doing something to protect the consumer on the fraud side, I think it would be huge … you’ve seen lawsuits dropped and investigations dropped, and what they pick back up will be interesting,” he said.

The nominee to helm the bureau, Jonathan McKernan, seems to be both a listener and collaborator when it comes to regulatory priorities, “and that’s good for the consumer and for the financial institutions and everyone involved,” Fagan said.

The Innovation Roadmap

In discussing how CUs should approach innovation, Fagan said successful innovation requires more than just moving to embrace the shiny new penny, so to speak. Innovation might be simply doing things differently than they had been done before — but it also requires new digital capabilities.

Size and scale may not permit much in the way of innovation failures at CUs, but “to truly innovate, you have to have a failure mentality,” he said. “You’re not going to hit it out of the ballpark with every single initiative.”

Partnerships are key, especially with digital wallet buildouts, he said. Partnerships, particularly through Velera, can speed innovation cycles, meeting demands for streamlined (virtual) card provisioning and other offerings.

“Speed on the back end of innovation is one of those areas where smaller FIs must take advantage,” Fagan said. Otherwise, banking clients, particularly younger ones, will be quick to move to a CU’s competitor.

Things may be uncertain now, said Fagan, adding, “ultimately, we’ll all come out of this on the other side, and things will ‘strengthen up,’ but it’s going to take a little bit of time.”

The post Velera CEO: Credit Unions Beef Up Financial Guidance as Members Face Economic Uncertainty appeared first on PYMNTS.com.

And right now, credit union members want to be reassured that their data and their money is being kept safe. As detailed here, last year, scams have become the leading form of fraud, surpassing digital payment fraud. The share of scam-related fraud increased by 56%, financial losses from scams rose 121% and the percentage of banks that posted a boost in dollar-denominated fraud losses stood at 42%. That’s a jump from the 29% of financial institutions (FIs) that had said the same in 2023.

In the report “Retention Roadmap: Credit Unions Drive Member Loyalty via Priority Alignment,” done in collaboration between PYMNTS Intelligence and Velera, we found there are real advantages in meeting expectations — as top-performing credit unions (CUs) have markedly low churn, at 1.7%. Higher digital adoption, as members demand new tools and services, offers a number of benefits, too: CUs can engage members at the points where they want to be met, namely on digital devices and cellphones.

Read more: Velera Warns Credit Unions of ‘Consumer-Engaged’ Fraud

Where the Priorities Lie

CUs are prioritizing what matters most to members: security and self-service. The two can go hand in hand. Security can leverage the very notion of the self — where biometric authentication uses the unique attributes of a finger or facial scan to use the banking apps that power everyday financial lives. CUs with proactive innovation strategies, which would include security, and a high degree of innovation readiness, achieve active mobile banking user rates that are 20% higher lesser performing peers. Sixty-four percent of CUs plan to offer biometric authentication or digital identity in the next three years, which still leaves some room for improvement, as roughly a third of CUs are yet to join that biometric authentication pantheon.

PYMNTS Intelligence data shows nearly one-quarter (24%) of consumers say security features are the most important investment for their primary FIs to make in the next three years — a greater share than for any other feature. Given the fact that security features and self-service digital solutions are also the top two priorities cited by 24% and 22% of small to medium-sized businesses (SMBs), respectively, there’s also a need for credit unions to examine how they serve their commercial clientele. Business email compromise and artificial intelligence (AI) deepfakes are all tools in the fraudsters’ arsenals.

The consumers who have, unfortunately, been on the receiving end of fraud attacks are still sanguine about their CU experiences. The data show that last year, a whopping 77% of CU members report being satisfied or very satisfied with how their FIs have handled their fraud situations. That’s up by 14 points from the previous year, which indicates that the tech-driven advances are bearing fruit.

As for the self-service options that are then on offer once the security protocols are in place and all checks out (and members are free to interact with the CU), 55% of CUs surveyed by PYMNTS Intelligence and Velera plan to offer self-service digital solutions in the next three years.

Trust is the glue that binds customers to their credit unions, and biometrics can be an added layer of reassurance that CUs are going the extra, tech-driven mile to increase that trust.

The post 64% of Credit Unions Plan to Offer Biometrics Authentication appeared first on PYMNTS.com.

David Durovy, senior vice president of transformation at i2c, told PYMNTS that many financial services firms, credit unions included, have historically relied on basic alerts, member prompts and generic digital coupons, some delivered via mobile apps or SMS text.

But that’s not enough, and members want their credit unions (CUs) to know a lot more about them, and to have an engagement that boils down to a conversation. Credit union members don’t want to be talked to by their banks, said Durovy — they want to talk with their CUs.

Getting there is no easy feat and means doing a lot more than simply updating and refreshing banking apps.

As he noted, “it’s easy to throw around the word digital,” and “digital experiences, digital first, they are buzzwords we hear every day across the industry, across a variety of use cases, but specifically for the credit union audience.” But these smaller financial institutions (FIs) have challenges in the mix as they seek to modernize operations and their members’ banking experiences. 

Compared to national banks, said Durovy, credit unions face budgetary constraints, and their staffing resources are far outpaced by their larger brethren. In order to forge ahead with new product and service innovations, credit unions have outsourced or utilized third-party aggregators to deliver a number of services that are critical for their member base.

Those third parties can include a broad range of providers, spanning core platforms to card issuing services. But in some cases, those same providers might not have the capabilities on hand to serve a credit union’s specific product roadmap or the services its individual and corporate clients are demanding.

Most credit unions’ members want an enhanced mobile experience, where, as Durovy said, many digitally savvy individuals, especially younger generations, have never had to write a paper check.

Adjusting to a Mobile-First World

“We’re in a mobile-first and mobile-native world,” he told PYMNTS, “and we have to be transacting there. But that’s one of the key areas where even today, a large number of credit unions still haven’t been provided the capabilities from their existing partners to be able to get there.”

And because of those limitations, said Durovy, CUs cannot capitalize as fully as they might on the fact that their competitive differentiation rests with an intimate knowledge of the markets they serve — the personal relationships that informs everything from setting up accounts to underwriting credit.

To fully digitize, he said, it’s important that the CUs providers — no matter if they offer a full suite of services or particular point solutions that plug into legacy infrastructure and their architecture — provide new capabilities, new services and new ways of interacting. Key questions that must be asked and answered, Durovy said, include:

“How do we create that credit union interaction with them through a mobile channel? What are the capabilities that we can pull through the mobile channel that are relevant today, but don’t necessarily require us to go into a credit union branch? How do we extend service through chat channels, and not just with chatbots?’” In short: “How do we add that layer of intelligence that truly differentiates the credit union?”

It will take a while, said Durovy, but there’s potential to be realized from embedded finance, underpinned by member-specific data that crafts personalized offers and cash-back rewards tied to local businesses. That contextual effort will be sharpened by the use of artificial intelligence (AI), he said, as CUs partner with firms such as i2c to build those services — especially around card issuing and small- to medium-sized business (SMB)-facing offerings.

“Card issuance is top of mind for a lot of credit union leaders today because historically they just haven’t had that product control and they haven’t had insight into a lot of the data,” he said. Now, “fast forward to today’s world. Companies like i2c can provide configurable, turnkey type solutions that allow [credit unions] to have the balance sheet … and allow them to take as much control of the operating environment as they want or are comfortable with.” 

As credit unions use digital and mobile channels to grow loyalty with existing members and gain new members, he told PYMNTS, “the whole premise here is that the credit union is local, that it does have a different knowledge base, a different understanding of the market, and it does provide service in a different way.”

The post Why Mobile Banking at Credit Unions Demands More Than an App Refresh appeared first on PYMNTS.com.