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Union Credit provides customer acquisition strategies for community financial institutions in 2024

Competing fintechs and a tightening economy calls for a new perspective

SANTA ROSA, CALIF. (December 19, 2023) — Union Credit, the only marketplace for credit unions to make firm pre approved, one-click credit offers at the point of purchase, reveals strategies for forward-looking community financial institutions to position for account holder growth in 2024 and long-term success.

As thousands of community and regional institutions battle over a finite amount of deposits, interest rates are growing increasingly competitive and fintechs are acquiring customers through lending. The “Buy Now, Pay Later” (BNPL) model exemplifies how consumers prioritize staying within their existing experiences, even opting for less attractive products to maintain their current paths. For credit unions and banks, success lies in adapting to this shift, focusing on aligning with consumer desires and needs. This strategic approach, emphasizing accessibility where consumers are actively engaged, is key to acquiring new customers and sustaining growth in the evolving financial services sector.

Barry Kirby, Co-founder and Chief Revenue Officer of Union Credit, emphasizes the imminent need for change in community financial institutions. He states, “Industry visionaries have long sounded the alarm, and now, a shifting economy will act as the catalyst, compelling these institutions to take decisive action.”

Here are three strategies community financial institutions can leverage today to acquire new relationships and position for growth:

Address the aging accountholder challenge. Millennials are the largest generational group in the United States, at just over 72 million people, and do most (80%) of their shopping online, often using embedded finance for purchasing. Forward thinking community institutions will invest in an embedded finance strategy to appeal to modern, young and digital-savvy consumers. This approach integrates competitive offers directly into younger consumers’ everyday shopping experiences, simplifying interactions and making it more convenient to engage with and join the institution.

Shift focus from large to small deposit acquisition. With an aim to attract younger demographics, who generally have limited funds, focusing on short-term growth tactics like Certificate of Deposits (CDs), which target high-income individuals, is not a sustainable strategy. Instead, focus on a diverse customer base with modest deposits. Millennials and Gen Z can be courted with smaller deposit opportunities that build financially healthy behavior and drive growth and long-term engagement.

Consider lending as a strategic avenue for growth. Many community institutions prioritized deposits over lending in 2023 to counteract shrinking margins. In the background, fintechs and megabanks quietly constructed robust loan portfolios, addressing market needs and gaining a substantial customer base. It’s crucial for community banks and credit unions to recognize that, as of 2022, the majority of their memberships originated from lending activities. Therefore, viewing lending not just as a short-term fix but as a long-term vision becomes paramount, offering an opportunity to make a lasting impact on communities. This shift in perspective may necessitate embracing innovative approaches beyond traditional methods like indirect lending, delving into more targeted strategies for attracting new prospects and infusing vitality into the institution.

Kirby explained, “Lending fintechs have set a new bar for consumers. Community financial institutions can no longer operate under a siloed thinking model that necessitates consumers to seek them only during times of need; instead, they need to proactively connect with them in those moments. Local lenders have a distinct advantage in terms of trust, service, and local impact. The next generation expects connectivity; they prefer shopping local and having trusted providers. Credit unions and banks that can break through the old ways to meet them where they are will forge lasting relationships within their communities.”

About Union Credit

Union Credit provides consumers with firm, one-click credit offers embedded within their daily activities. The marketplace helps credit unions break into new markets digitally with access to the front end of purchase and financing experiences. Merchants embedding Union Credit benefit from providing customers with local, competitive, and advantageous offers that are in the buyer’s best interest. Visit our website and follow us on LinkedIn to learn more.

Contacts

Samantha Wheeler
Account Associate
William Mills Agency
C (205) 789-8136
300 W. Wieuca Road | A-300 | Atlanta, GA 30342
samantha@williammills.com | www.williammills.com