As a speaker at a recent event for credit unions and community banks, I engaged in many discussions about the daunting challenges for the industry. From better staff training and in-branch agentic AI to interactive displays and improved data availability, vendors at the event offered solutions. But simply making another purchase seemed inadequate to credit union leaders’ true quest: Bringing fresh relevancy to credit unions for members and potential members.
In 2024, credit unions captured only 5% of new checking accounts, according to Cornerstone Advisors. That’s down from 10% in 2022. An aging customer base adds to the challenge. Large banks and fintechs win the lion’s share of new accounts and younger potential members.
Despite their trusted role in communities, credit unions don’t just compete with other financial service providers, but also compete with social media influencers as sources of financial advice – and too often lose. Amidst these challenges, waves of consolidation sweep up institutions that fall too far behind.
What’s the reason credit unions fall behind? Too many credit unions chase what’s next in tech or branch design without asking: “Does this actually help our members get what they care about?” Real relevance comes from knowing the job you do for people, not just the tech you use to do it. The opportunity is in meeting unmet member needs and building on what makes credit unions special. Getting that right will reinvigorate the industry.
Closing the Experience Gap
In conversations with credit union leaders, I found a clear awareness that the industry faces a looming relevance problem. Closing the customer experience gap presents an opportunity to build fresh relevance for members and potential members. The experience gap refers to the disparity between what business leaders and their customers perceive. In financial services overall, 79% of leaders believe they meet customer expectations – but only 26% of their customers agree, according to the 2025 CX20 Global Report from AmDocs.
After investing in automation, more comfortable branches and digital transformation, the size of the member/customer experience gap surprises many credit union leaders. That’s because simply following trends doesn’t close the gap. You close the gap by delivering the digital, in-person and product experiences that meet consumer needs for financial services – and that consumers want to adopt. That may sound daunting, but as a credit union, you’re already on that path.
Credit unions meet needs that megabanks and fintechs can’t. In an environment where consumer protection rules are facing rollback, fraud and other security threats are on the rise, and predatory lending may be making a comeback, people want their financial institution to be on their side. Credit unions put members first and bolster that trust advantage with local knowledge and community relationships. You’re already positioned to help members keep their money safe and navigate complex choices. You must also offer experiences that enhance your position and that people adopt.
Uncover and Meet Actual Needs for Real Consumers
You boost your relevance – and let it shine through – by delivering experiences that highlight your core strengths, including local insights, personal service and commitment to helping people, businesses and communities thrive. How? Invest in member needs and adoption – not in internally generated ideas, hot technologies or efficiencies in isolation from what people want.
For example, in a large CRM system implementation, focus on first uncovering the realities critical to driving adoption and building relevance. The goal is to gain clarity about what your members are trying to accomplish, their needs and what they will come back for again and again. Only then can you align the solution to member needs.
How to Surge Ahead Instead of Chasing
Credit unions fall behind when they chase fintechs and big banks at their own game – building “feature parity,” instead of focusing on what makes them uniquely valuable. Assumptions, legacy systems and a tech-first mindset perpetuate this problem. Stop worrying about being “behind,” focus on making life meaningfully better for members, on the stuff only you can deliver. That’s how you get loyalty that tech alone can’t buy.
To break out and win, credit unions should leverage their core advantage: They exist to simplify, guide, empower and protect their members. That’s especially true in the face of increasing security threats. Don’t just keep up. Play your own game by zeroing in on what people in your community need and how you can help – now and next. Start with:
- Deep member understanding. Go beyond telling your story. Dig into what people are trying to achieve and why your credit union is the best partner. Lean into your stake in local communities, your charter and the real-life challenges members face.
- Design for people, not tech. Use technology as a tool, not a goal. Focus on making things easier, more transparent and more personal for your members. Combine fresh ideas with the familiar. Give people choices about how to engage. Use data to show you understand what matters most to them, solving their urgent needs and supporting better financial futures.
- Human touch as a competitive edge. Train and reward staff for what only people can do: Listening, anticipating, clarifying and building trust. Use personal insight to present options that matter. The big banks can’t automate genuine human connection, especially when it’s grounded in local knowledge.
- Courage to evolve. Be bold about changing how you work if it means meeting members’ needs better. That might mean fewer branches, new ways of serving or partnering where it helps. Don’t let legacy thinking box you in.
The real opportunity isn’t copying the competition’s features; it’s doubling down on your unique promise to your members. Simplify. Guide. Empower. Protect. That’s what will keep you relevant, no matter how fast the world changes.
Play to Win
Investing in the latest financial service trend may or may not solve the big issues. It’s a gamble that could lead to success or drain your resources. You play to win when you focus on what members need and will adopt. Ground your efforts in a clear understanding of the customer experience gap.
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