Last Summer, the reputation of banks fell for the first time in 5 years. After a series of data breaches in the banking industry, customers began to distrust larger financial institutions. As a result, people began to turn to credit unions, which they viewed more positively. The big point of differentiation between credit unions and other financial institutions is the culture of trust and member service. Credit unions tend to be more involved in their community, and are able to connect with members on a personal level. These are qualities that members have begun to value a lot more and credit unions anticipate more members in 2019 to join for these very reasons.
In addition to quality member services, credit unions have been able to compete through new technologies and solutions. In 2018, credit unions took a deep dive into their core technology to see how it holds up to member demands. Many credit unions found that their core simply did not have the capacity to keep pace with their strategic goals moving forward. Consequently, a vast number of credit unions invested in new core technology which would facilitate integration with best of bread fintech providers. According to FinTech global, fintech firms raised $32.2 billion in the second quarter of 2018, which is more than triple the same quarter of the previous year.
With a new core and technologies like machine learning and mobile banking in place, credit unions have also switched gears to target new age groups such as Millennials and Gen Z. These generations look for cutting-edge technologies when choosing a financial institution, and credit unions have taken huge leaps this year to capture their attention. While both Millennials and Gen Z are captured through tech options, their needs are actually quite different. Millennials are young professionals and many of them have reached the prime home-buying age of 29, so they will be looking into options such as mortgage lending. Meanwhile, the younger Gen Z cohort is comprised mostly of students, looking for entry level bank accounts and convenient solutions such as mobile apps and integration with P2P platforms like Zelle.
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