Credit Unions (CUs) and Financial Institutions (FIs) are working harder to understand how innovative technologies such as cryptocurrency, blockchain, and peer-to-peer (P2P) payments will change the way they operate. provide products and services to members and customers.
UC in particular is rising to the challenge of continuing to satisfy members with the traditional services they have used for decades and providing the latest offerings that many members want. PYMNTS data revealed that half of UC members value product innovation, and nearly a quarter say they would take their business to another financial institution for more innovative products and services. CUs that work overtime to understand the types of innovation that best meet member demand can reduce the likelihood of losing their members to other FIs or FinTechs.
These are just a few discoveries in “Credit Union Innovation: The Race to Meet Consumer Demand», a PYMNTS and PSCU collaboration. We surveyed 6,483 account holders of US FIs, including 2,073 UC members and 4,410 customers of other FIs, from April 1 through April 21 about how they value products and services innovations from their financial service providers. PYMNTS also surveyed 101 credit union executives from April 4-20 about their responsibilities for a range of functions, including operations, product development, and research and development. Finally, we surveyed 50 executives of FinTechs that provide products and services to consumers, credit unions, commercial banks, and community banks from April 6 through April 20.
Additional key findings include the following:
• A record 29 percent of FI account holders and CU members say they would switch to more innovative service offerings. The previous high for account holders willing to switch for innovation was 26% in 2019 and 2020. Willingness to switch is less pronounced among UC members, however: only 24% would consider switching to receive products innovative, while 31% of clients of other FIs would do the same.
• Thirty-nine percent of CU leaders are shifting their product development efforts to focus on adding new features to existing products. Meanwhile, the share of CUs emphasizing innovative new product development fell to 18% in 2022 from 21% in 2021 – another reflection of the challenges all FIs face as they try to beat their competitors by bringing new innovative products to market.
• Sixty percent of CUs report investing in innovative products such as real-time and P2P payments, an increase from the 50% of CUs who made these investments in 2021. In mobile banking, however, the proportion of CUs making investments declined to 60% from 74% a year ago.
As the digital shift continues and gains momentum, more and more consumers will inevitably demand that their trusted financial service providers offer them more advanced products and services. Much of this interest stems from consumers’ desire for convenience and to save time. The 20% of FI account holders who only use digital banking channels are proof of this. As UCs increase their investments in innovative products and enhance existing offerings, they will attract members who want access to digital payments, reduce their exposure to member churn risk, and better position themselves to nurture relationships. with account holders.
To learn more about the strategies that credit unions can adopt to provide their members with the products and services that interest them, To download The report.