Closing the Digital Divide: Credit Unions Should Prioritize Tech Over Transactions
In the past, credit unions have acquired banks to gain quick access to technology that they could then build upon down the line. But credit unions are realizing that to continue prioritizing members’ experience and build loyalty, they must meet members where they are — everywhere.
By Nicole Haverly, Vice President – Credit Unions at nCino
Over the last decade, industries across the board have gone through rapid digitization as new technology has become available and consumer expectations have evolved. The financial services industry, while moving slightly slower than other industries, is no stranger to the evolution. Banks, with their product-focused approach and drive to remain competitive, have been quicker to adopt digital solutions to meet changing demands. Credit unions, on the other hand, have historically prioritized building deep, personal relationships with their members over pushing products, which has sometimes slowed their adoption of new technology.
In the past, credit unions have acquired banks to gain quick access to technology that they could then build upon down the line. But credit unions are realizing that to continue prioritizing their members’ experience and build member loyalty, they must meet members where they are — everywhere. Online and mobile platforms have become the primary touchpoints for members, making it essential for credit unions to invest in technology that delivers seamless, intuitive experiences.
Rather than relying on the quick fix of tech-enabled banks to catch up, credit unions have an opportunity to differentiate themselves by investing directly in modern technology that aligns with their mission of service and trust.
Facing the Pressure to Digitize
Credit unions are at a crossroads. Falling behind their regional and commercial counterparts in adopting technology puts them at risk of irrelevance, especially as younger generations, who are digitally native, expect seamless, mobile-first experiences. The median age of credit union members is 53, highlighting the urgent need for credit unions to modernize their offerings and appeal to younger, tech-savvy generations to ensure long-term growth and relevance.
To attract and retain younger members, credit unions must prioritize mobile banking solutions that meet these expectations. The good news is, according to a GoBankingRates survey, about 26% of Gen Z already use credit unions for their banking. While this may be in part to legacy banking trends influenced by their parents, credit unions need to continue to attract younger generations by investing in where they spend their time, and that’s on mobile apps. Investing in technology to meet these generations where they are means providing the information they seek and sharing it where they consume it — on their phones.
Learn more:
- Don’t Get Frankenbanked: When a Financial Institution’s Tech Stack Goes Rogue
- Why Niche Banking May Be Community Banks’ Secret Weapon
- Struggling to Become Truly Data-Driven? Focus on Access and Culture, Not Tech
Mobile Solutions for a Digital-First Generation
Mobile banking is no longer optional — it’s essential. According to a recent study by Morning Consult and the American Bankers Association, 55% of adults use mobile apps for banking, and this number is only growing. Younger generations prefer mobile apps over traditional websites, with nearly two-thirds of Gen Z using mobile banking apps. Platforms that make financial management engaging and intuitive are capturing their attention, leaving traditional institutions struggling to keep up.
Neobanks — digital-only banks — are a prime example of this shift. With over 30 million Americans already holding neobank accounts, and that number expected to grow to 40 million next year, the competition for younger business is fierce. Credit unions must act now to ensure they remain relevant in this rapidly evolving landscape.
Balancing Technology and a Personal Touch
A common hesitation among credit unions is the fear that technology might replace the personal relationships they pride themselves on. The key here is to leverage technology to enhance — not replace — human interactions. For example, AI can analyze member behavior, transaction history, and preferences to deliver highly personalized financial advice, product recommendations, and even custom marketing. By integrating data and AI tools, staff can access real-time insights during member interactions, making every conversation meaningful and personal. In addition, AI tools can help credit unions anticipate member needs, provide tailored offers, and deepen member relationships.
Strategic technology investments can help credit unions bridge the digital gap while remaining competitive in the industry. How? By meeting their members where they are and providing seamless ways to manage their finances.
The Way Forward
Credit unions sit at a pivotal intersection: they can either continue acquiring banks and potentially waste budget and time in the hopes that the technology acquired will serve their members’ needs, or they can strategically invest in technology that their members want while continuing to cultivate the community-oriented engagement they’re known for.
Failure to invest in technology that their members want could have irrevocable consequences. Not only is strategic investment key to closing the digital divide, but it will keep credit unions competitive in their communities.
While the amount of technology available is overwhelming, it is crucial for credit unions to remember that there is no "one size fits all" solution; however, there are key actions they can take while staying community focused.
First, credit unions need to meet their members where they bank — digitally. Developing an app with seamless interactions will allow their members to bank on the go while still feeling connected to their credit union.
Second, credit unions need to develop an efficient data management strategy to better unlock the power of their data. The amount of data collected has increased exponentially over the past decade. The increase in data, combined with inefficient data management, has made it increasingly difficult to effectively use the data to meet members’ needs. By developing an efficient data management strategy, credit unions will see value from technology like AI to drive additional benefits for their members.
Lastly, credit unions need to invest in technology that connects their front- and back-end offices by using analytics and intelligent processes. Traditional banking has relied on manual, time-intensive processes which take time away from relationship-building. By leveraging AI-powered solutions that augment the human experience, credit unions can reclaim precious time that was previously spent on investing in their members and communities.
With strategic technology investments — focusing on seamless mobile platforms, intelligent processes, and data management — tailored to meet member expectations, credit unions will be able to attract new members while honoring their current ones. By doing this, credit unions can redefine the future of banking while continuing to honor their original mission of service.
