Neobanks, Fintechs, Bigtechs – Oh My! How Does Your CU Compare to Challengers?

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No matter how hard you try, challenger banks are hard to ignore. Each day seems to bring news of another challenger bank, or another partnership or acquisition of one, and the activity of challenger banks is poised to only increase as they are taking the banking market by storm. While credit unions differ in approach by honing in on personal connections with members, there is a lot to be learned from challenger banks. All in all, members and customers are after the same thing, which is high tech and in channels that work best for them.

As members’ preferences continue to evolve, credit unions are faced with fierce competition from challenger banks. In the past year, challenger banks have gained rapid attraction due to their ability to meet customers in the channel of their choice – digital.  As of September 2020, seven American challenger banks counted approximately 39 million users combined, a 40% increase compared to the previous year, according to Statistica. While it’s easy to say this could be a reaction to COVID-19, as limited personal interactions made it easier to incorporate a fully digital banking option, another reason could be the advanced tech solutions that many customers and members are after.