In a harsh appraisal of the industry's future ability to gainmuch new business from Bank Transfer Day fallout, aCalifornia-based research firm warned Monday that credit unionsstand to “go the way of the Oldsmobile.”

Credit unions may enjoy the public's “love” but they sorely lackthe full tech expertise to appeal to a younger clientele which manybanks, particularly large ones, retain, declared James Van Dyke,founder of Javelin Strategy & Research in Pleasanton.

In a report issued last week reviewing Bank Transfer Day accountmovement from large banks, Van Dyke told Credit Union Times thatcredit unions need to work much harder at upgradingtechnology-based products.

Based on interviews with Occupy and Bank Transfer Day participants, Van Dyke said “these youngfaces are avid users of the kinds of social, mobile and onlinetechnologies that are in shortest supply at credit unions” butproliferate at banks.

The anger may be directed at banks, he said, but “theprotesters' signs” are being held by someone “holding a mobiledevice that is best suited for use at the very bank described inthe sign held by the other hand.”

These “young adults” may have the desire “to love anotherfinancial institution” like a credit union but they are not aboutto give up “always-on and real time technologies” they enjoy, saidVan Dyke.

This kind of attitude among the youth “should be raising alarmbells” in CU board rooms, he warned, but adding that whilemethodically improving services, credit unions “should not respondby buying every new technology pitched to them by vendors.”

Rather, he said, they should “prioritize the offers with abusiness case that allows the new technologies to pay forthemselves. Think about acquisition, cross-sell, cost-minimizationand loyalty … all in ways that reward both the new member and thecredit union,” he advocated. “Make a small number of wiseinvestments to see an increase in membership and higherprofitability,” the Javelin founder said. “If young consumers arewilling to stand in line through the night to get the next versionof an iPhone, they'll become fans of a financial institution thatgives them a similar experience.”

In his report assessing BTD activity, Van Dyke said the firm'sresearch shows that that 5.6 million U.S. adults with a bankingrelationship changed providers in the past 90 days. Of thoseswitchers, 610,000 US adults–or 11% of the 5.6 million–cited BankTransfer Day as their reason and actually moved their accounts froma large to a small institution.

“With a Google search of 'Bank Transfer Day' returning fully 22million responses we're not surprised that these angrybank-switchers represent nearly a three-time increase over theamount of people who took their funds out of large banks for thesame stated reason during the previous 90-day period in 2011,” hesaid.

The exodus “was certainly not the massive departure banks might have feared,” Van Dykesaid, noting that research shows the people are highly resistant tomove their accounts “and even Huffington Post's similarlypositioned 2008 'MoveYourMoneyProject.org' failed to barely evenregister in previous Javelin surveys.”