Credit Unions Must Rethink Their Value Prop
Credit unions face a growing challenge from large banks and fintechs that are increasingly winning over younger consumers, according to Bill Handel, general manager and chief economist at Raddon, a Fiserv company.
Handel, a returning guest on the Shared Accounts With CU Times podcast, said credit unions may be underestimating the long-term threat posed by changing consumer preferences.
Research from Raddon shows that roughly 80% of Gen Z and millennial consumers now identify one of the nation's largest banks as their primary financial institution. For the second consecutive survey, younger consumers were also more likely to identify an online bank or fintech as their primary financial provider than a credit union.
"The lesson from the big banks and the fintechs is the same," Handel said. "How we do business—the speed, the ease—is really the critical piece overall."
While concerns about a stock market collapse may be overblown, Handel noted that risks remain, particularly rising auto loan delinquencies and ongoing pressure on consumers who are still recovering from years of inflation.
Looking ahead, he said credit unions should focus on improving operational efficiency, embracing AI as a tool to augment, not replace, employees, and redefining their value proposition around helping members achieve their best financial lives.
"Efficiency ratio is king," Handel said, adding that future success will depend on balancing technology investments with high-quality talent and member service.
BONUS FEATURE: As promised in the episode, here are photos of Zach's quick stop in Madison to meet Michael at his favorite brewery Working Draft. And take a look at Zach's new library card. It's simply the coolest thing EVER! We're glad Zach and family are all situated in their new home in Minneapolis.
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