Skip to main content

The Seven Steps to Becoming an Innovative Credit Union

 


By rich@leading2leadership.com | December 1, 2023

As the financial landscape evolves and becomes disrupted, credit unions face the challenge of staying relevant. To maintain relevancy, innovation becomes a must-have if the organization is to meet the changing needs of its members. Embracing innovation is vital for credit unions to thrive. But innovation, for innovation’s sake, is not helpful. All innovation must focus on offering members a memorable and personalized experience. This article will explore the seven steps for credit unions to become innovative.

  1. Member-Centric Approach, Understanding the Member’s Needs:

Everything a credit union does must begin with the member in mind. Understanding the member’s life journey needs, with an eye on their preferences and pain points, is critical. This deep understanding of members should be the driving impetus for all innovation. This member-centric approach ensures that innovations directly address the challenges credit union members face. A significant part of innovation is understanding how to leverage technology to personalize services. Consider using AI-driven chatbots and machine learning for customer support and loan approvals while creating a seamless, user-friendly experience across all channels.

2. Foster a Culture of Innovation:

Fostering a culture that encourages creativity and innovation is paramount. This involves empowering employees at all levels to share ideas, experiment with new approaches, promote creativity and risk-taking, and embrace a mindset that values continuous improvement. Create a work environment where collaboration and communication are valued and employees feel safe sharing innovative thoughts. Cross-functional teams and innovation labs can provide dedicated spaces for brainstorming and testing new concepts.

A vital element of innovation is a culture that embraces diversity of thoughts, ideas, and experiences. Educate staff about the importance of diversity in thinking and how diversity positively impacts innovation and well-being.

3. Embrace Technology:

Innovation in the digital age is synonymous with technological advancement. Credit unions should invest in cutting-edge technologies to enhance member experience, streamline operations, and stay competitive. A credit union may have to consider a transition from legacy systems to more agile and scalable platforms. This includes adopting cloud computing, upgrading cybersecurity measures, and integrating APIs for smoother data exchange with third-party services. This includes improving mobile apps, online banking services, and tools used in call centers and branches. Today, credit unions must explore emerging technologies like distributed ledgers (blockchain) for secure and efficient transactions, money movement, and authentications.

Credit unions should focus on streamlining operations, enhancing member services, and improving efficiency by staying abreast and investing in the latest technologies and tools.  A digital-first/mobile-first strategy is essential to meeting the expectations of today’s tech-savvy members.

4. Collaborate with Vendors, Other Credit Unions, and FinTech:

A core principle of credit unions is collaboration. Collaborating with other credit unions, vendors, and fintech companies can open up new potential for innovation. Fintech firms are often at the forefront of advancements, and partnerships can provide credit unions with access to innovative solutions without significant in-house development. When credit unions and vendors collaborate, finTech collaboration can be magnified with fresh perspectives and expertise. This climate of cooperation can result in mutually beneficial relationships that enhance the financial ecosystem. Building this collaborative ecosystem can accelerate the credit union’s ability to adapt to changing market dynamics.

5. Invest in Data Analytics:

Data is a crucial driver of innovation. Credit unions need to know, through data, what members are doing, what they aren’t doing, what they are missing, and what they need. This data-centric approach to innovation will also help the credit union know when an innovation is working and, if not, why. But the ecosystem around data is very complicated. Most credit unions have over 30 third-party data sources that use proprietary reporting systems, nomenclature, queries, report timing, and APIs. Credit unions should invest in robust data systems to normalize and govern the critical data before it will yield insights into member behavior, preferences, and trends the organization needs. Insufficient data will only yield wrong insights and decisions. By leveraging a governed and analytic discipline, credit unions can personalize offerings, detect patterns, make informed decisions, and safely deploy AI decisions and machine learning, effectively contributing to their overall innovation strategy.

6. Personalization and Niche Building is Vital:

One size does not fit all when it comes to financial services. All credit unions should focus on using innovation to tailor their offerings to meet the unique needs of individual members. This need for personalization may be more significant for smaller credit unions. Small credit unions cannot compete in the open financial services market with the big players’ tools, applications, and access choices. Therefore, innovation becomes their lifeline to sustainability. Using Design Thinking and Innovation, small credit unions can identify market niches not served by the “big guys.” By innovating product solutions and access methodologies, these small credit unions can learn to serve this niche and build a franchise that is very difficult to replicate. This can include personalized savings plans, targeted lending products, focused marketing, product bundling, and applications and tools for access and money management. This personalized approach builds member loyalty and sets credit unions apart from larger, more impersonal financial institutions.

7. Make your Innovation Sustainable:

Ensure innovation aligns with the credit union’s core values and long-term goals. Seek solutions that meet immediate needs and contribute to sustainable growth and positive social impact. Sustainable innovation considers environmental, social, and governance (ESG) factors.

Becoming an innovative credit union requires a holistic, strategic, and proactive approach encompassing technology, culture, collaboration, and a deep understanding of member needs. Credit unions can position themselves as dynamic and forward-thinking financial institutions by fostering a culture of innovation and staying adaptable to changes that serve the members and the organization. Ultimately, the goal is to create an environment where members feel supported and excited about the financial opportunities their credit union provides.

Comments

Post a Comment

Please no profanity or political comments.

Popular posts from this blog

Hurricane Knocked The Power Out? New Orleans Firemen’s FCU Is Ready.

  Hurricane Knocked The Power Out? New Orleans Firemen’s FCU Is Ready. The next big storm in the Gulf isn’t an “if,” it’s a “when,” but the small Gulf-area credit union has a plan to help the community get back on its feet when the time comes. Aaron Passman This article is part of Callahan & Associates’ “ CDFI Grants In Action ,” a limited editorial series that showcases how credit unions leverage CDFI funding to advance their mission and deliver measurable impact for members. To learn how CDFI certification can change lives and unlock opportunities at your credit union, visit  CU Strategic Planning , A Callahan Company. When hurricanes rip through the Gulf, they leave behind disrupted lives and disconnected communities. In those moments, access matters as much as empathy. When disaster strikes,  The New Orleans Firemen’s Federal Credit Union   ($275.0M, Metarie, LA) is ready to roll with a mobile branch that brings back banking to the front line of recovery. The...
Post a Comment
Read Complete Article HERE>»

Sunday Reading - Lake Manly Returns

  Lake Manly Returns   An ancient lake has  reemerged in California's Death Valley National Park following record rainfall this year.  Between 128,000 and 186,000 years ago, meltwater from ice covering the Sierra Nevada fed rivers that emptied into Badwater Basin, North America’s lowest point at 282 feet below sea level. The steady flow sustained Lake Manly, nearly 100 miles long and roughly 600 feet deep. The lake disappeared as Death Valley evolved into the driest place in North America , with some areas receiving under two inches of rain annually. This year, however, the park received 2.41 inches between September and November, marking its wettest autumn on record and triggering the temporary return of a shorter, shallower Lake Manly.  Above-average rainfall periodically brings Lake Manly back, including in 2023 when Hurricane Hilary dumped 2.2 inches of rain on a single August day, allowing visi...
Post a Comment
Read Complete Article HERE>»

The US Senate makes major step towards recognizing firefighter cancers as line‑of‑duty deaths

   18 Dec 2025 The US Senate makes major step towards recognizing firefighter cancers as line‑of‑duty deaths en Fire Fighter´s Advocacy   Firefighter Cancer   Firefighter Unions   Firefighter's Health   Line of Duty Deaths The US senate  has passed the   Honoring Our Fallen Heroes Act , recognizing firefighter occupational cancers as line‑of‑duty deaths and extending federal benefits to families. This marks a shift in U.S. policy towards aligning with decades of advocacy by firefighter unions and survivors. According to a statement on IAFF.org,  the passing of the Act in the Senate is a "major step forward for the thousands of survivors who have been denied PSOB benefits after losing their loved one to cancer...  It now moves to the U.S. House of Representatives for consideration." According to IAFF.org, the Honor Act has strong bipartisan support in both chambers of Congress. A companion bill in the House ( H.R. 1269 ) currently has 152...
Post a Comment
Read Complete Article HERE>»

Sunday Reading - The gold standard, explained

  Gold Standard       The gold standard, explained A gold standard is a system where a country’s currency is pegged to, and can be converted into, a fixed amount of gold. It’s typically meant to create a sense of security in the country’s currency: When a government uses a gold standard , its currency can be exchanged for an equivalent amount of gold—although regulations around redemption vary by country.   After the Civil War, in 1873, America adopted the gold standard for the first time. At the time, if gold was priced at $100 an ounce, each dollar  rep...
Post a Comment
Read Complete Article HERE>»

Effective January 1, 2026 - Credit Union Succession Planning

  First Responder Credit Union Academy www. NCOFCU .org   Effective January 1, 2026 This  statement  from current NCUA Chairman Todd M. Harper states that “this final rule on succession planning establishes a way for the NCUA to address one of the most common causes for unplanned and unforced credit union mergers. It also ensures that smaller institutions remain the cornerstone of ...
Post a Comment
Read Complete Article HERE>»

Buy Now, Pay Later Keeps Gaining Ground: New Study Shows Growth Surge

03/10/2025 06:31 pm Share         TROY, Mich.— A new study reveals the appeal of buy now, pay later is not waning, as the service saw significant growth last year. The J.D. Power 2025 U.S. Buy Now Pay Later Satisfaction Study shows BNPL enjoyed continued, significant growth in the number of consumers using the product year over year, with the highest usage among consumers from Generations Y and Z, and the highest growth period during the holidays. “The BNPL segment has undoubtedly grown in popularity, with more customers using these services than ever before,” said Sean Gelles, senior director of banking and payments at J.D. Power. “That’s been especially true around seasonal periods of higher spending, such as the holidays. Card-based BNPL products continue to lead the charge on satisfaction, as issuers are leveraging their existing brand awareness and equity to retain would-be defectors.” Following are some of the key findings of the 2025 study: Gene...
Post a Comment
Read Complete Article HERE>»

Sunday reading - What's the story behind Thanksgiving?

What's the story behind Thanksgiving? While European settlers in North America had long observed days of thanks, prayer, and reflection, the “ first Thanksgiving ” most often refers to a 1621 meal between the Pilgrims and the native Wampanoag people.   In 1863, Abraham Lincoln declared a national Thanksgiving Day on the final Thursday of November to be celebrated each year. A large meal shared with loved ones is the centerpiece of most Thanksgiving celebrations, where the average gathering size is seven and most people consume 3,150-4,500 calories .   What began as a neighborly meal to celebrate a successful harvest has transformed into an annual economic and cultural powerhouse: The day before Thanksgiving is one of the busiest days of the year for air travel as Americans prepare to eat upward of 40 million turkeys  and 80 million pounds of cranberries. ... Read what else we  learned about the holiday here . ...
Post a Comment
Read Complete Article HERE>»

The Market Review

The Market Review Payroll Tax Cuts Extended, U.S. Data Mixed, ECB Steps Up SupportThe past week has seen moderate progress on several fronts. First, the EU markets were bolstered by a massive lending program from the ECB to over 500 banks. The banks borrowed €489 billion in 3-year loans at a rate of 1.00%.
Post a Comment
Read Complete Article HERE>»

How CU Economists are Responding to Latest Jobs Numbers

WASHINGTON–What many are calling the newest jobs report disappointing, it has some positives, according to economists with both CUNA and NAFCU. The federal government said that during September nonfarm payrolls rose by just 194,000 in the month, after many analysts had been saying they expected as many as 500,000 new jobs to be reported. According to the fed data, the topline number was hurt by a 123,000 decline in government payrolls, while private payrolls increased by 317,000. Dawit Kebede, CUNA Despite the weak jobs total, the Bureau of Labor Statistics reported wages were up sharply. The monthly gain of 0.6% pushed the year-over-year rise to 4.6% as companies use wage increases to combat the persistent labor shortage. ‘Still Reluctant to Travel’ “Following the Delta surge in August, various indicators started showing signs of improved economic activity,” noted CUNA Senior Economist Dawit Kebede. “The September jobs report is weaker than expected, but the good news is that whi...
Post a Comment
Read Complete Article HERE>»

Here’s What Consumers are Saying About Gift Cards, According to New Fiserv Study

BROOKFIELD, Wis.–Eighty percent of consumers say they enjoy receiving a gift card as a gift, and 68% of consumers will spend the full value of that gift card in three months or less, according to the 19th Annual Prepaid Consumer Insights Study from Fiserv. The study further found employers are increasingly using gift cards to reward their employees, and retailers are finding new ways to leverage gift cards in their incentives and rewards programs. According to Fiserv, five of the most interesting findings in the survey of more than 1,000 U.S. consumers include: ‘Satisfaction’ Abounds with Gift Cards 80% of consumers say they feel satisfied when they receive a gift card, so satisfied that consumers aren’t waiting long to spend them. 71% of consumers say that it takes one or two purchases to redeem the full value of a gift card; and 68% say it takes less than three months to fully redeem. Physical Cards Still Reign, But Digital is Growing While digital gift card spending is on the ri...
Post a Comment
Read Complete Article HERE>»