How credit unions can navigate their rapidly changing industry
Despite the economic headwinds credit unions are facing right now, they’re also entering one of the most significant transformational periods the industry has ever experienced.
Despite the economic headwinds credit unions are facing right now, they’re also entering one of the most significant transformational periods the industry has ever experienced. This is largely due to the rapid digitization of how credit unions operate and engage with members – a direct response to fundamental shifts in consumer demands and priorities. While this period will come with inevitable logistical obstacles and short-term crises, it will ultimately put credit unions in a better position to build their membership bases and compete with other financial institutions.
There’s no doubt that 2023 will be a difficult year for credit unions: Fed interest rates will remain high, refi and purchase mortgage volume will shrink, and many members will be under considerable financial stress. However, there’s also good news: tappable home equity will likely remain strong, while home equity loans and HELOCS will be essential sources of liquidity for members. But the most important good news is the fact that credit unions have demonstrated a willingness to adapt as the economic and technological landscape shifts beneath them.
With that fact in mind, let’s take a look at the biggest developments in the industry and how credit unions can be prepared.
Consumer expectations are evolving
How consumers manage their money and interact with financial institutions has undergone a series of transitions in recent years, and the pace of change will only continue to accelerate. For example, a 2022 Ipsos-Forbes survey found that 78 percent of banked Americans prefer to do their banking digitally. While banking experiences were already digitizing, the COVID-19 pandemic forced financial institutions to make this change even more proactively.
