To understand how credit unions’ strategic choices for growth are evolving to address these challenges, CUNA Mutual conducted a survey of 183 credit union executives earlier this year.
Larger credit unions ($1.25B+) were more likely than smaller credit unions to say they have expanded into new geographies prior to the pandemic and during the pandemic. They were also more likely to say they plan to expand into new counties or states in 2022.
One in four credit unions polled merged during the pre-pandemic period or during the pandemic. Another 15% say they are planning to merge by the end of 2022.
The percentage of credit union executives expecting mobile apps (69% vs. 42%) to be a Top 3 distribution channel in 2022 increased significantly compared to the pre-pandemic period.
*Pre-pandemic period defined as January 2018 – February 2020.
There was a significant decline (19% vs. 28%) in the percentage of credit unions expecting NSF courtesy pay fees to be among their Top 3 revenue drivers in 2022 compared to the pre-pandemic era.
The leading sources of competitive advantage identified by credit union executives were: member service, ability to serve members in the channel of their choice, strong community presence, organizational culture and most attractive interest rates.
Member service may no longer be competitive advantage given recent American Customer Satisfaction Index (ACSI) research showing credit unions on par with or trailing banks on service-related attributes.
The digital capabilities with the highest adoption rates in the pre-pandemic period were: APIs for vendor relationships and partnering, end-to-end digital new account opening, digital new account on-boarding, cloud computing and advanced data and analytics.
While adoption of digital capabilities is expected to continue growing through 2022, credit union executives expect large increases in the adoption of two digital capabilities: advanced data and analytics and personalized communications of offers using artificial intelligence.
Study participants expect three non-digital capabilities; digital marketing, user experience design and talent acquisition / development; to grow significantly in importance by 2022 compared to the pre-pandemic period.
2021 CUNA Mutual Group internal data and Experian, “Auto Finance Insights: State of the Automotive Finance Market Q1 2021,” Q1, 2021
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