AUSTIN, Texas — Curious what the future of credit unions will look like?

Ron Shevlin, senior analyst at Aite Group, suggested to CU Water Cooler Symposium attendees Thursday that the future of credit unions boils down to changing the rules of retail banking so that they are in the credit union industry's favor, rather than the bigger players'.

He added that a niche exists for credit unions in delivering financial advice to the truly financially engaged masses. He defined financially engaged as those who are creating and managing monthly budgets, categorizing and forecasting their expenses, have a desire to get advice on how to manage their finances better and which payment methods to use.

“If credit unions don't fill that space, providing advice around everyday things of optimizing their spending and savings, it opens the door for someone else to,” Shevlin said.

Shevlin challenged the industry as a whole to put money and resources into creating new business models around moments of opportunity. 

He offered three areas worth further exploration: Service-based pricing monetizing advice not transactions, closed loop membership-no member left behind, and the creation of a CU FINScore, a 'Fit-Bit' of banking.

“What I've heard from credit unions is that members leave because they turned that member down for a loan. When someone joins a credit union why not let it be with the credit union system as a whole? So if you may not be the best provider for that loan you refer them to another credit union that can so you keep them in the system,” Shevlin said.

“Creating a FINScore, which tells consumers in real time how they are really doing in terms of budgeting, creates moments of opportunity to talk about why it changed and what they can do about it,” he added.

Shevlin also said the idea not only adds to the financially engaged consumer's bottom line of how they can optimize their spending and savings by taking certain actions and behaviors, it also quantifies the benefits of membership.

“Credit unions can stop competing on rates or fees and compete on FINScore improvement to those financially engaged consumers, who find it important to manage their financial lives,” Shevlin said. “It creates a common credit union  language.”