Come 2030, credit unions will be in business serving up somekind of financial services, essentially one generation removed fromtoday. However, getting there will be as wrenching—as full ofdislocations and pains—as was the shift from 1950s-style creditunions with no share drafts into today's full-service financialsupermarkets.

But experts are on hand with tips for mapping a path totomorrow.

At the starting gate, Birmingham, Ala.-based credit unionconsultant and onetime NCUA chairman DennisDollar threw out a chilling prediction about the number ofcredit unions left standing a generation from now. “The mergertrend in credit unions will definitely continue and significantlyaccelerate over the next five years,” he said, “probably settlinginto the range of 5,000 credit unions by 2020. That will befollowed by a period of assimilation and, from that point forward,a much more strategic approach to mergers. By 2030, there willlikely be about 4,000 credit unions. However, I am convinced thatthey will be stronger financially and much better positioned toimpact their communities with wider fields of membership, enhancedcapital options and a reputation as the most influentialcommunity-owned financial institutions.”

Compare those figures with roughly 7,300 credit unions as ofyearend 2011, which means Dollar projects a 40% drop in the numberof institutions.

Other industry observers were even less optimistic. Olympia,Wash-based credit union consultant Marvin Umholtz said, “There willbe fewer than 1,200 credit unions in 2030, and the vast majority ofthem will be over $1 billion in assets and a substantial numberwill be over $10 billion. Any credit union under $100 million inassets will be referred to as 'tiny.'”

Ben Rogers, research director at the Filene Research Institutein Madison, Wis., split the difference. “I believe there will bearound 3,000 credit unions in 2030,” he said. He agreed that thesurviving credit unions would be significantly larger, too. “Rightnow the average size is $187 million,” he explained. “It will be$500 million then.”

Things get particularly interesting as experts offer futuristicviews of what it will take to prosper. Big areas of anticipatedchange include outsourcing, branching, an emerging world of 24/7contact, and the tax exemption.

Stan Hollen, CEO of COOP Financial Services in Rancho Cucamonga,Calif., said he sees a time ahead where credit unions do more fortheir members by doing less themselves. He specifically envisions aworld where “credit unions act more like the Ace Hardware model.”He explained that Ace, a cooperative, provides group buying,back-office process and marketing with the result that smallerhardware stores are able to compete with extremely well run big boxcompetitors.

Hollen also foresees dramatically more outsourcing of functionssuch as collections, lending and human resources as functions thatwould be easy for many credit unions to outsource to lower costproviders. “The shift to outsourcing will be sizable,” predictedHollen, who indicated it would be unavoidable in an era when costcontrols are crucial.

As for branches, Hollen is adamant that branching will remainintegral to credit unions, but it will become very different, verysoon. “Branches will look more like Apple Stores,” he said. Tellerswill no longer be isolated behind protective barriers; theyprobably will approach customers with Apple iPad type devices intheir hands.

There also will be a lot more self-service. “It will be similarto going into an airline terminal today versus 10 years ago,” saidHollen.

In that vein, Amanda Lowery, an executive vice president withThird Degree, an Oklahoma City marketing firm, predicted, “By 2030,if people are coming into the branch for a face-to-faceinterchange, it will be for something complex or deemed veryimportant by the member—developing financial plans, debtcounseling, etc. There will be shift from quick transactionsto sitting down and advising. Fewer credit union employees withmore skills and credentials will be the norm. The branch squarefootage will likely decrease.”

A paradox is that even as branches shrink, there actually couldbe more contact between credit unions and their members. At leastthat is the view of Michael Poulos, CEO of Michigan First CreditUnion, a $600 million institution in Lathrup Village, Mich. “Ourgoal is around the clock connectivity. We need to be there for ourmembers 24/7.”

Poulos said this is not just talk. Within a year, he elaborated,Michigan First will staff up call centers that will provide theability for members to interact 24/7. In many cases, members willchoose to seek answers online, and for them there will be onlinetools. Still others may use video calling. “We want to be there forour members how they want us to be,” said Poulos.

“Our goal,” he added, “is the reverse of the Golden Rule. Wewant to treat people as they want to be treated.” He suggested thisis a path that may help many credit unions prosper in the comingdecades.

One dark cloud, pointed to by numerous industry observers, isthat probabilities are said to be increasing that credit unionswill lose their tax-exempt status. “By 2030 many of the survivingcredit unions will be very large institutions. They will look muchlike other large financial institutions, and they will be taxed asothers are,” predicted Bill Conerly, a financial servicesconsultant based in Portland, Ore.

Consultant Umholtz echoed that prediction. The trade off in hisview is that credit unions “will have access to capital fromsources other than retained earnings, including the option forhybrid ownership structures that authorize partial stock issuancewith voting rights for investors. The currently heavy reliance inthe loan portfolio on real estate loans will have been largelyreplaced by business-related lending.”

These changes will not come easily, and they won't be painless.But, for the credit unions that transform themselves to suitchanging times, there will be bright tomorrows, the experts stated.Hollen noted, “I have not worn a watch in four years. I see almostno young people wearing watches. Who will wear watches in 2030? Wedon't want to wind up like watchmakers. To avoid that we haveno choice: We need to be flexible, we need to adapt, and we need todeliver what people want.”