The Six-Point Plan to Re-ignite Credit Union Growth in 2026
By David Evans, Chief Content Officer at The Financial Brand
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Credit unions, faced with mounting pressures from rising deposit costs, intensifying competition, and evolving member expectations, must fundamentally rethink their growth strategies, according to “Next-Level Growth: Credit Union Opportunities in a Changing Market”, a recent report from Cornerstone Advisors.
According to the report, nearly two-thirds of credit union executives now identify new member growth, operational efficiency, and deposit gathering as top concerns, with these “growth anxieties” escalating sharply over recent years. Traditional approaches, including branch expansion, broad marketing campaigns, and incremental product updates, are proving insufficient against competition from fintechs and megabanks who are capturing younger demographics with speed and personalization.
Need to Know:
- 62% of credit union executives ranked new member growth among their top three concerns in 2025, up from 41% in 2022, a 51% increase over three years.
- 74% deployment rate characterizes credit unions’ technology projects, meaning one in
Credit unions face an existential growth challenge transcending simple member acquisition. “Community” no longer defines itself geographically but through affinity, lifestyle, and values. Meanwhile, Gen Z and millennials demand digital experiences their parents never expected.
The old tools aren’t working. Traditional levers including branch expansion, broad marketing, and small product adjustments are proving insufficient to meet the demands of these new realities. Growth must originate not just from new members but from deeper engagement with existing relationships.
Defining the New Growth Mindset
Cornerstone argues that credit unions must shift from transaction-focused operations to relationship-deepening strategies that combine their inherent advantages in trust and mission with digital sophistication, AI-powered efficiency, omnichannel distribution, and proactive sales cultures.
The upside: Institutions willing to systematically identify friction points, experiment with solutions, and scale successful innovations can transform growth challenges into opportunities for sustainable expansion.
Key insights
- Innovation requires execution, not departments. Credit unions suffer from a concerning deployment gap where roughly one in four institutions planning technology initiatives fails to execute, with similar patterns across online banking platforms, digital account opening, and CRM systems over multiple years.
- Digital channels now drive primary member relationships. One in five credit union members logs into mobile apps daily, surpassing total branch foot traffic across entire networks, making digital experience quality the dominant factor shaping institutional perceptions.
- Overcome sales stigma that actively blocks growth opportunities. Credit union staff incorrectly interpret member-centricity as avoiding proactive product conversations, leaving members unaware of beneficial services while products-per-member ratios stagnate despite genuine demand.
- Hybrid distribution models can scale reach economically. Credit unions combining micro-branches, virtual banking channels, and reimagined physical locations as relationship hubs achieve membership growth exceeding 4% and loan growth surpassing 17% without proportional cost increases.
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A Practical Framework for Sustainable Growth
1. Do away with “innovation theater”. At many institutions, the term “innovation” has devolved into a synonym for “new technology” rather than systematic problem-solving.
Mike Kelly, CEO of TeamOnUP and former PSCU chief executive, argues credit unions often employ innovation definitions that are far too narrow and distract from genuine growth work. Innovation should function like a hammer—a tool for specific problems rather than the foundation for entire departments. Kelly also believes credit unions possess unique innovation opportunities where larger players cannot compete: hospitality and human engagement. Simple improvements in branch staff training, genuine friendliness, and readiness for member moments represent innovations more transformative than many technology deployments.
2. Make digital experience your primary growth channel For Bhavna Guglani, chief digital officer at BCU, digital channels no longer merely supplement physical presence but rather drive primary growth engines. With members across all 50 states, BCU learned firsthand that branch-centric models cannot scale effectively. Digital channels carry brand responsibility when one in five members logs into mobile apps daily—more than total branch foot traffic across entire networks. BCU implemented onboarding flows asking new members about financial goals and well-being. When members interact with tellers, experiences are inherently personalized.
3. Blend physical and digital access in branch transformation The digital dominance of daily member interactions does not render brick-and-mortar locations obsolete. Rather, branches must evolve. Cornerstone’s research confirms that while routine transactions have moved online, branches remain critical for complex financial needs. Physical proximity still matters for over one-third of consumers choosing financial institutions.
Case study: Steven Mertz, executive vice president of growth and strategy at People First Federal Credit Union, reimagines branches as extensions of digital capabilities rather than replacements.
People First opened its first micro-branch at just 250 square feet, outfitted with interactive teller machines, kiosks, and video access to remote bankers. The institution subsequently launched a full digital branch—a virtual lobby connecting members via video to universal bankers for account opening, loan applications, and comprehensive services. The motivation proved practical too: Serving underserved markets in 250 new census tracts without building costly branch infrastructure. The strategy also sparked product innovation including the Smart Saver account, a reverse-tiered savings product rewarding smaller balances to encourage saving habits.
4. Transform sales culture to unlock relationship growth Converting opportunities into deepened relationships requires cultural shifts many credit unions resist. Jay Fee, senior vice president of consumer and commercial banking at Teachers Federal Credit Union, identifies reluctance to embrace sales culture as a primary industry growth barrier.
The core problem: Staff believe they must choose between being member-centric and being proactive about product recommendations, creating false dichotomies that paralyze frontline teams. When staff avoid conversations about genuinely beneficial products, they withhold valuable options rather than protecting member interests.
5. Move artificial intelligence beyond chatbots to predictive analytics The AI discussion has filled board meetings for years, but for many credit unions, disconnects between discussion and deployment reveal deeper challenges. Yes, chatbot deployment reached 45% of credit unions by 2025, up from just 3% in 2019. But that should not be the end of the story.
Reva Rao, head of digital transformation at Blend and former senior leader at Golden 1 Credit Union and Travis Credit Union, argues that AI-powered predictive analytics is the next transformative frontier: spotting when members approach overspending before rent comes due, anticipating fraud before it happens, and delivering proactive financial wellness members expect institutions to provide.
AI can augment human judgment rather than replace it, handling repetitive tasks while preserving personal touches for sensitive situations including fraud resolution and financial hardship navigation. The most effective implementations blend efficiency and empathy, with AI managing transactional work like account inquiries and routine approvals while allowing staff to focus on complex needs requiring judgment, compassion, and relationship-building.
6. Eliminate relationship-killing moments. Credit unions pursuing growth should conduct blocker audits across member journeys identifying where applications abandon, where members call instead of self-serve, and where staff lack confidence in product conversations. Solutions should be prioritized based on impact rather than novelty—streamlined loan approval processes cutting decisioning time from days to hours may prove more transformative than flashy chatbots handling 2% of inquiries.
The Bottom Line
The credit unions that thrive in coming years will combine inherent advantages in trust, mission, and member relationships with new capabilities in digital sophistication, sales effectiveness, AI-powered efficiency, and omnichannel distribution. They will solve real member problems rather than chase technological trends, experiment with solutions, fail fast, learn, and iterate. They will empower every employee to contribute to growth rather than centralizing responsibility in isolated departments.
Most importantly, they will recognize growth as a means to fulfill missions more broadly and deeply rather than an end itself.
