How credit unions can win the product game

Credit unions are often overlooked in analyses of the financial sector—with the showdown between startup challengers and giant incumbents featured far more frequently in the spotlight. But credit unions are a stalwart of the US banking landscape, counting more than 135 million Americans as customers, and they’re not going away anytime soon. 

Rather, credit unions have a viable opportunity to leverage their local rootedness and personalized touch to beat out competitors. With the right products that speak to their strengths, credit unions can stick around—and scale significantly.

Personalization

Most credit unions are local, if not hyperlocal. Though there are only around 4,900 credit unions today, compared with more than 13,500 twenty years ago, the majority of remaining credit unions continue to emphasize local affiliation over nationwide spread, which defines larger institutions like Navy Federal Credit Union. 

That local emphasis, especially with credit union leaders coming from the communities they serve, can help define product road maps. Creating competitive loan terms for local industries and companies, for example, or emergency financial assistance coordination in the face of local emergencies, can demonstrate the utility of credit unions and shore up their ranks as well. That credit unions extended 19% more loans in 2022 than the year prior suggests that many major credit unions are already moving in this direction. 

Accessibility

Arguably, part of credit unions’ current product win involves committing to the product and operational methods that have served them for decades. Especially in communities with poor internet connectivity and other infrastructure, developing digital products in conjunction with analog complements can maximize access and client bases.

Credit unions can, in this respect, demonstrate the win that comes out of building products that work both online and offline.

Partnerships

Making successful digital products requires a large lift that is often infeasible for small credit unions. Those fundamentals have encouraged fintechs to serve as credit unions’ official tech-development partners—players like Finotta, Apiture, Tipalti, Backbase, and others.

Credit unions face crucial partnership-related decisions, picking out the right tech provider to build out their digital offerings in conjunction with the traditional products they offer. This can help reach younger demographics and users beyond their immediate geographies (where that makes sense), and can expand the portfolio of products their clients can access.