Credit unions unite behind digital banking
The Rochdale Society of Equitable Pioneers. The Shore Porters Society. Fenwick Weavers’ Society. These and other 19th-century proto-cooperatives were the forerunners of today’s credit union (CU) community. Early innovators managed cooperatives using the same founding principle that CUs use today: members-first finance in place of indifferent, legacy-style banking.
Though the sector is considered healthy and well-managed, credit unions and the CUSOs (credit union service organizations) that support them with tailored offerings face upheavals in the next couple of years. The PYMNTS December 2019 Credit Union Tracker looks at the changing topography of the CU space, as digital transformation challenges the “all for one, one for all” mentality that has undergirded their business model since the 1800s.
A Small Change It’s Not
Strong balance sheets in key areas like credit card debt ($64.4 billion), car loans ($382.9 billion) and mortgages find most credits unions on solid footing as 2020 begins. But change is in the air, and it’s the intoxicating scent of digital transformation. Specifically, the metamorphic impact of mobile open banking and instant payments has been the first real test of the trust bond that holds CUs together. With the possible exception of FinTechs that stand to gain from customer defections and perhaps some legacy banking competitors, no one is rooting against the CUs. Even so, they have decisions to make – and quickly, too.
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