Crisis for credit unions?

Apps, branches, and websites face technological disruption.

New technologies are constantly redefining our world. There are nearly countless examples of old technologies and incumbent business models being ousted by new ones. Technological disruption is the story of Netflix busting Blockbuster, Internet media shredding the newspaper industry, cell phones replacing landlines, and self-driving semi-trucks displacing truck drivers (coming soon).

World-renowned Harvard professor Clayton Christensen wrote a whole book about technological disruption called “The Innovator’s Dilemma.” The gist of the book is that long-standing organizations too often become entrenched in a certain way of doing things and, therefore, fail to adapt when breakthroughs come on the scene. Incumbents might not embrace an innovation because they fear change, believe it won’t affect them, want to maintain the status quo, or they just don’t see it coming. Whatever the reason, failure to innovate can spell death or injury for an organization.

For credit unions, there are innovations on the horizon that will make current technologies and practices obsolete. The good news is that new technologies don’t have to be threats. They are only threats to people who resist or are unaware of them. Indeed, credit unions who are willing to embrace innovations have a big opportunity to solve a lot of banking problems that currently exist.

Current problems with mobile banking apps

Credit unions are trapped in a dichotomy where half of their digital traffic goes to their websites and the other half goes to their mobile apps. This split in traffic divides the resources of the credit union, makes marketing difficult, and negatively impacts member experiences.

For consumers, native mobile apps can be inconvenient because they have to be downloaded. Additionally, valuable information and core banking features are divided between apps and websites, instead of all being in one place. Finally, only existing members get value from apps, not potential members.

Current problems with brick and mortar branches

People don’t want to visit branches for everything. More and more people prefer to interact with financial institutions digitally because it’s more convenient. This is especially true of the rising generations (e.g., Millennials).

We’ve known for years that credit unions’ websites get more traffic than their brick-and-mortar counterparts. Despite this common knowledge, most credit unions haven’t changed their marketing or member interaction strategies. As I’ve said before, “there’s massive dissonance between how people are banking and where credit unions are investing, and that disparity will continue to grow if credit unions don’t change their spending habits.”

Current problems with credit union website designs

Credit unions are still trying to catch up with the last major technological disruption that affected their websites: smartphones. Many credit unions still do not have responsive websites that work on all devices.

If your credit union website design isn’t responsive at this point, you’re already well behind the technological curve and at risk of being left behind again because the next wave of website innovations are already being implemented by early adopters. New innovations include real-time personalization, artificial intelligence, and mobile-app-like functionality, which is discussed below.

When your credit union website design lags behind the curve, consumers end up choosing your competitors that have greater functionality and convenience.

What’s the answer?

Your mobile app, physical branches, and traditional website will be replaced by a full-service digital branch (FSDB)—a web app where consumers can do all of their banking.

More specifically, FSDBs will be progressive web apps (PWAs). As Google explains, PWAs are “a new way to deliver amazing user experiences on the web.” They are websites with app-like functionality that can do everything your mobile banking app does—even mobile deposit—without having to download anything. A popular example of a PWA is the web version of Twitter, which functions like a native app even though it’s accessed through a browser.

In the past, mobile banking apps served a useful purpose because they could do things that web apps couldn’t, but that’s not the case anymore. Here’s a small sample of what PWAs can do:

  • Send push notifications to your device
  • Capture images and video
  • Function offline without an internet connection
  • Detect device motion
  • Save to your home screen like an app (but without needing to download)

Check out a more exhaustive list of what PWAs can do at

When mobile apps, websites, loan origination systems, account opening systems, etc. merge into one PWA to create an FSDB, members and nonmembers alike will be able to learn about your products, open accounts, get loans, and manage their money without bouncing between a website, native app, and other systems. One integrated experience is more pleasant for users and unified for credit union managers.

Everything you do in a branch could be done through an FSBD, except count coins, cash checks, and shake hands. You could even use a service like POPin to connect consumers with support agents via video calls (similar to Facetime) and facilitate digital, notarized signatures.

Will all brick and mortar locations be replaced by FSDBs? No, I don’t think so. But FSDBs are the future of mainstream banking because that’s how modern consumers want to bank. As I mentioned earlier, credit union’s websites already get far more traffic than their branches because it’s simply more convenient to bank online than to visit a branch, in most cases. People may want to visit a branch in-person if they have a complex issue to discuss, but that’s an exception rather than the rule.

Credit unions are a hardy group that have gone through lots of changes over the past century. As a whole, they have more assets and members than ever, but face tough competition from banks and fintechs. Credit unions that embrace innovations that align with consumers’ wants are most likely to see their growth continue. Accordingly, full-service digital branches can give consumers the banking experiences they really want and solve some of the biggest problems credit unions face today with mobile apps, physical branches, and websites.

Derik Krauss

Derik Krauss

Derik is a cofounder of BloomCU, an award-winning website design agency for credit unions. His agency's design work has received recognition from CUNA (Diamond Award),, and others. He ... Web: Details

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