The stat credit unions can’t ignore
Indirect lending has long been a cornerstone of credit union growth. Yet fewer than 1 in 20 indirect borrowers ever open another account. They finance the loan, drive off the lot, and disappear. In 2026, that kind of leakage is no longer a minor inefficiency. It’s a strategic risk that can derail growth plans. [Source: FLEX Credit Union Technology, 2024]
As leadership teams gather this fall to finalize strategic plans and budgets, the question isn’t whether indirect lending still matters; it does. The question is whether credit unions will treat those borrowers as transactions or as members worth cultivating. The difference lies in how seriously we take the first 90 days.
The leakiest part of the funnel
Indirect portfolios often look impressive on balance sheets: auto loans booked, assets growing, pipelines healthy. But inside that volume hides a troubling pattern. Most indirect borrowers never enroll in digital banking, never move their direct deposit, and never adopt core services like e-statements. They remain “loan-only” relationships.
For years, this was tolerated. Volume masked the leakage. In today’s environment, that luxury is gone. With acquisition costs estimated at $200–$500 per new member, every dormant indirect borrower represents lost ROI. When deposits are harder to gather and fintech competitors make habit-building look effortless, ignoring this segment isn’t just wasteful, it’s negligent.
The economics of 2026 demand discipline
The credit union system is heading into 2026 with mixed signals:
- Loan growth has slowed. The industry posted just 2.8% growth in 2024, with only a modest rebound to 3.3% in early 2025. Indirect is no longer a volume-only play. [NCUA Quarterly Data Summary, Q1 2025]
- Deposits are volatile. Share balances rose 4.5% year-over-year in Q1 2025, continuing the 4.3% increase seen in 2024. However, members are aggressively rate-shopping and shifting money between institutions. Winning deposits requires winning behaviors. [NCUA Quarterly Data Summary, Q1 2025]
- Competition is everywhere. Megabanks and fintechs onboard members in minutes, with guided pathways that feel like apps, not forms. Their message to consumers is simple: “We’ll show you what to do next.”
Against this backdrop, the first 90 days of a new relationship become the make-or-break window. Either members adopt core behaviors, such as funding, payroll, and card usage, or they vanish.
The first 90 days define loyalty
Research across industries shows habits form early. In banking, if a member hasn’t funded an account, set up payroll, or activated their card in the first 90 days, the likelihood they ever will drops sharply.
The mistake many institutions make is treating onboarding as a message instead of a managed plan. A welcome letter or an email campaign is not enough. Members need guidance, nudges, and a sense of momentum. Behavioral science points to simple but powerful tactics: progress bars, personalized prompts, streaks, or micro-rewards. These aren’t gimmicks; they’re signals of care and direction.
Fintechs have mastered this. They don’t hope members figure it out; they choreograph the first session and celebrate each completed step. Credit unions can do the same without sacrificing their values.
Lessons from the field
Kohler Credit Union in Wisconsin faced this reality head-on. Their leadership identified a breakdown: members were joining, but the relationship wasn’t moving forward. Direct deposits stayed elsewhere. The mobile app went unused. E-statements lagged. The intent was there, but the follow-through never came.
“We had the right products, but we lacked a cohesive onboarding experience that actively engaged members,” said Matthew Fehrmann, CIO of Kohler Credit Union. “People need direction more than additional features.”
Kohler’s response was to redesign the member journey from the first login forward. Instead of adding new products, they focused on guiding members into the ones they already had. Personalized emails and in-app prompts encouraged high-impact actions: online banking enrollment, mobile app download, e-statement opt-in, and direct deposit setup.
The philosophy was simple but profound: don’t overwhelm members with options, show them how to act. The result? More deposits flowing into accounts, higher digital adoption, and stronger loyalty.
Strategic planning means budgeting for activation
As boards debate 2026 priorities, indirect members must be part of the conversation. Growth won’t come just from new loans or new marketing campaigns. It will come from converting the relationships credit unions already have. That means budgeting for activation.
Consider the data:
- More than 25% of banks and credit unions lose over half of their online account applicants before completion, with another third losing 26–50% [CUNA 2025].
- At some credit unions, over 85% of prospective members abandon digital applications [CUNA 2025].
- Even when accounts are opened, nearly 50% go dormant or churn in the first year [CU 2.0, 2025]
- Younger generations, 79% of Gen Z and 69% of millennials, still lean toward large banks, yet half say they’re open to switching if a credit union can prove value early [Apiture/Harris Poll, 2024].
Practical steps include:
- Defining activation KPIs. Track funded accounts by day 30, direct deposit penetration by day 60, and card-in-use by day 90. These metrics matter more than account opening counts.
- Designing guided pathways. Embed onboarding steps into digital banking so members complete them in session, not weeks later via email.
- Using behavioral design. Apply nudges and gamified elements to make progress visible and rewarding.
- Optimizing continuously. Onboarding isn’t a project to launch and shelve. It’s a discipline to refine quarter after quarter.
This is where challenger thinking comes in. The institutions that succeed won’t be the ones that spend the most on acquisition. They’ll be the ones who invest in making activation dependable.
From transactions to trust
Indirect lending gives credit unions something precious: an introduction. What happens next is a choice. Will we let those members vanish after the loan, or will we guide them into habits that create loyalty, deposits, and deeper engagement?
Strategic planning season is the time to decide. Every line item in the 2026 budget reflects what leaders believe about the future. If indirect members are absent from that plan, the message is clear: growth will be left to chance.
Credit unions exist to transform transactions into relationships. The first 90 days are where that promise is either kept or broken. In 2026, it must be kept.
