You’ve most likely heard the saying, “You can’t keep doing the same thing over and expect a different result.” Have you ever used it when talking about your credit union? Let’s phrase it differently for perspective. If you don’t change the way your credit union does things, your credit union risks becoming irrelevant.
That may sound harsh, but the numbers don’t lie. Nearly 400 credit unions have disappeared in the past two and a half years, and that’s a steady trend for a decade or more. NCUA data indicates 145 credit union mergers were approved in 2023, 162 mergers and consolidations were approved in 2024 and 80 credit union mergers were approved in the first half of this year – 387 total. Those credit unions most likely weren’t the ones that took smart risks and failed. They are the ones that avoided risk altogether – at the highest cost.
Define Risk
Risk doesn’t mean taking reckless gambles. It means the willingness to take chances. It means facing the discomfort that comes with change. It means having the calculated courage to step forward when others step back. For example, Southwest Financial Federal Credit Union, an $82 million credit union in Farmers Branch, Texas, took on a bold partnership with BankSocial to enter the cryptocurrency space. Instead of waiting for others to test the waters, they positioned themselves ahead of the curve.
“We had the opportunity to buy in to BankSocial in the early stages,” Southwest Financial CEO Melanie Kennedy said. “Our partnership with BankSocial gives our members the opportunity to buy and sell crypto currency in a safe space and maintain custody of their wallet, which is not the case with some other crypto wallets. This product continues to grow in features, functionality and security.”
Risk taking doesn’t always require your credit union to spend a lot of money. Sometimes it does, but more often, it requires credit union leaders to embrace the unknown and move forward, not backward.
Take Risks in Marketing and Branding
Credit unions are notoriously conservative in many areas of the business, and marketing is one of them. They put considerable effort into convincing potential members how different they are from banks and even other credit unions, but their marketing doesn’t always reflect that.
Case in point. Does your credit union do a Fall auto loan campaign? More than half of our marketing clients do, and probably half of all credit unions do similar campaigns. There’s nothing wrong with that. Fall is still an ideal time to purchase a vehicle, even in today’s economic climate. The challenge comes with their unwillingness to be different.
Think about it. If half the credit unions in America launch a Fall auto loan campaign, all of them use imagery of leaves falling or similar seasonal settings, and they include overused headlines like “Fall Into Savings,” or “Rake in the Savings,” where is the differentiation? We’ve had this conversation with credit unions more times than I can count, but some are more comfortable doing what they’ve always done. They would rather opt for the familiar than take a risk for something out of the box to succeed.
Unfortunately, this trend extends far beyond seasonal auto loan campaigns. We’ve spoken with dozens of credit union executive teams and boards of directors who know they need a new website but don’t want to invest in the expense. We’ve talked about name changes and rebranding to credit unions that know they won’t grow until they have a name that is not directly associated with the niche demographic that can join their credit union. But they’re still not willing to risk offending legacy members. At some point, credit unions have to realize that failing to take a risk results in the risk of lost opportunity.
Centric Federal Credit Union in West Monroe, La. ($420 million) knew they were taking a risk when it created an entire culture around its new tagline. They knew a tagline was more than words on website. It’s a brand promise, and they needed to get it right. They needed to be sure all of their employees lived it daily. “Living Better” was a new way of serving members and a new way for employees to treat each other. It was woven into every aspect of Centric’s business.
“It was crucial that our message never suggested that members couldn’t live better without us,” Centric SVP of Marketing Kelli Green said. “Instead, our vision was clear. As a financial partner and confidant, beyond just a banking relationship, we are here to help you live better. Today, the ‘Live Better’ brand reflects not only who we are, but who we strive to be – sharing the journey of life during the ups and downs they may experience.”
There are some banks out there that have also figured out the importance and taking risks, and they’ve done it in an entertaining way.
Badass Bank is one of them. A division of Stryv Bank, Badass “was created by a team of industry disruptors with a vision to revolutionize the way people experience banking.” It bills itself as “a bank built for the bold” – a bank that does what others are afraid to do. “Being a badass means breaking away from the norm, challenging outdated systems and relentlessly pursuing innovation to give our customers more power, freedom and control over their finances.”
Its target audience is tech-savvy, ambitious and bold individuals who want to feel in control of their finances. Its website is predominantly black with gold skulls and definitely challenges the status quo of bank marketing and branding. In other words, it’s completely different than most banks.
Redneck Bank is another. This bank is the internet banking division of All America Bank in Oklahoma. Its entire product lineup is two accounts – a high yield rewards “checkin” account and a mega money market account, plus a handful of digital services for account accessibility.
Its uniqueness lies in its fun, folksy and humorous "redneck" theme. Its website features cartoon animal mascots and colloquialisms, promoting the idea that "bankin's funner.” The bank's offbeat name was chosen to stand out in a crowded field of digital banks and appeal to a broad, nationwide customer base. The quirky marketing is a way to make banking feel less intimidating and more approachable. It’s different. It stands out.
If both of these banks can pull off such uniqueness, credit unions can certainly step outside their comfort zones a bit and take more risks with their marketing.
Take Risks With Your Board
The average age of a credit union board member in the U.S. is mid-to-late 60s, with one report citing 76.3 years as the average in 2023. Having older board members at credit unions brings experience, but it can also create challenges like resistance to change, lack of perspective on younger members, outdated policies and limited exposure to modern business practices.
Quick question: What is the age of your youngest board member? Is there anyone in their 30s or even 20s on your board? It takes intentionality to get younger board members. While you don’t want to replace veteran and contributing board members with younger, disengaged members, you do need a healthy mix.
Succession planning and developing a deep bench does not just apply to the C-suite. It starts with the board.
Board members who don’t understand technology, security and other issues could have serious ramifications for credit unions. It’s important to have open, and yes, sometimes uncomfortable discussions with your board members about bringing in younger people. Your credit union’s future depends on it.
Take Risks With Your Capital
Some credit unions have too much capital. Instead of investing it in new technology or credit union upgrades, or returning it to members, these credit unions just sit on the money to have a financial cushion. This type of capital erosion strategy is not an inefficient use of member funds. If it isn’t being invested or loaned out, it isn’t expanding services to members or benefiting members with optimal loan and savings rates.
Excess capital can also make a credit union complacent. Boards might avoid innovation or risk-taking, thinking the financial cushion is sufficient. While too much capital isn’t a regulatory violation, it signals inefficiency. Credit unions exist to serve members, so hoarding capital instead of using it to benefit members can be considered a governance issue, and that impacts the credit union’s ability to grow.
Credit unions can’t afford to not take risks. There’s too much competition and too much credit union consolidation happening. Stepping into the unknown does not always require a giant leap. Taking small, intentional steps outside of your comfort zone builds confidence and momentum. Whether it is launching a new initiative, making a bold decision or empowering your team in new ways, growth begins the moment your credit union chooses to move forward.
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