Navigating the Evolving Credit Union Landscape in 2024

The frontrunner CUs will prepare to capitalize on fluctuations in the economy, technology and regulations.

By Jody Bhagat | March 22, 2024 at 09:00 AM

As we find ourselves nearly three months into 2024, several developments are shaping the credit union landscape faster than ever before. Greater member attrition, increasing digital migration, heightened regulatory scrutiny and the emergence of artificial intelligence are coming together against economic uncertainty. Credit unions face difficult prioritization in this fluid climate. One prediction seems sure: We'll see further divergence between top-tier credit unions and the rest of the pack over the next 18 to 24 months.

While most concentrate on driving efficiencies and cost reductions in 2024, progressive institutions are strategically boosting investments in critical capabilities for an edge. History shows this advantage can expand when competitors simply hunker down. What priorities should lead the agenda ahead? Here are four key areas credit unions should consider moving up on their priority lists.

1. Realizing tangible value from major initiatives.

Many credit unions have started on ambitious modernization initiatives across four areas: Data infrastructure, core system upgrades, digital platform enhancement or post-merger integration. For some, these resource-intensive undertakings are long-term plays focused on building essential competitive strengths over time. However, with mounting cost pressures, these complex attempts may demand that their efforts prove material, near-term returns that warrant ongoing expenditure. Credit unions should identify high-impact applications that can speed up the realization of benefits, re-evaluate transformation roadmaps for phased rollouts that extract value faster and combine them with operational efficiency programs.

Credit unions have to strike a balance between making progress on modernization while also demonstrating concrete dividends from early accomplishments. For instance, rather than rolling out a wholesale data transition over two years, credit unions could prioritize specific "use cases" based on a narrower collection of data assets. This generates ROI through better member intelligence while methodically strengthening the overall environment.

Leading credit unions recognize that transition for its own sake no longer cuts it. They have to maintain a sharp focus on step-by-step priorities that move them to modern systems while also fueling momentum through early wins.

2. Battling for deposits through member engagement.

The intense competition for core deposits is now a top priority for most credit unions. Rising funding costs, account outflows and thinning margins put institutions in a battle for any advantage to attract and retain deposits. However, promotional rates alone rarely work on their own anymore amid the current competitive landscape.

McKinsey research found two key demographics – young/high income and middle age/high income – account for over 60% of deposits prone to switching institutions. The former shows a switching likelihood 3x higher than the latter. Credit unions that understand and fulfill distinct member preferences can draw more deposits compared to rivals.

While pricing stays important, the focus should shift toward member engagement by providing customized solutions grounded in behavior and product innovation. Such personalization represents the main factors in securing future deposits.

Savvy credit unions engage members through tailored offerings – like "savings boosters" – that benefit both sides. Adoption of these tools can as much as double the credit union's ability to capture more wallet share through additional product relationships.

As credit unions empower members with more control through customized insights and tools, they build trust and loyalty beyond temporary rate incentives. The winners in this intensifying battle will be those that leverage rich member understanding to demonstrate they have each person's best interest in mind. Prioritizing engagement and trust now yields higher account balances later.

3. Journeys become the priority.

Members have many financial objectives, like increasing savings, reducing expenses or improving credit health. These goals evolve as people's financial situations change over time. These "jobs to be done" require more than a single move – they're a journey.

In 2024, credit unions will get better at identifying members' most critical financial journeys. They will then curate products, tools, trackers and content to quicken progress along those paths. Rather than promoting generic offerings, credit unions will facilitate members spelling out their goals and tailor solutions to streamline their achievement.

Of course this will be a phased approach, initially focusing on the top priority journeys detected. The key is coordinating across channels and products to smooth the complete trip. An added payoff for credit unions is heightened member loyalty and deeper relationships with those who allow the institution to assist them with these journeys.

4. Targeted proposals that showcase genuine personal value.

The era of bland, generic marketing banners is coming to an end. Today, members simply disregard credit union marketing banners, even with sophisticated back-end targeting. Even targeted banners on authenticated sites convert at around just 1%. Members feel credit unions are just trying to sell them something, so it's understandable that few people actually click them. The only real justification for using banners is that credit unions can display them at high volumes, meaning a small fraction of clicks still accumulates.

In 2024, we may see the inception of a new concept: Personalized engagement marketing. Credit unions can harness their knowledge of individual member transactions and behaviors to deliver personalized proposals that show precise personal savings based on spending habits. This is a big shift – fundamentally evolving the whole engagement process between credit unions and consumers.

This breed of data-driven personalization is an example of the future of credit union marketing. Leveraging the latest data and analytical capabilities, credit unions can put together targeted guidance that can foresee what members need. This tailored advice resonates not only because it comes from the member's own activity, but also because it's highly customized to the member's conduct and needs. Targeted guidance grounded in a person's behavior converts because it proves the credit union truly understands them and has a genuine interest in strengthening their financial life.

Looking Ahead

Credit unions face some tough choices in 2024. Compounding the fiscal strain is that these choices will have a lasting influence on a credit union's competitive stance and financial performance. Credit unions need to purposefully concentrate on their abilities that augment the value they provide members, and have that value be unique. Even with so much uncertainty, one thing holds steady – only slashing expenses won't suffice.

The frontrunners in this new credit union world will prepare to capitalize on fluctuations in the economy, technology and regulations. They'll cultivate skills not just to keep pace, but to refine their unique value. Credit unions that embrace change and original ideas can sidestep stagnation, even as fights escalate over deposits, trust and members.

With intensifying competition ahead in 2024, forward-thinking credit unions will prioritize building stronger member loyalty and service, expanding the gap with lagging institutions.

Comments

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...

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...

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...

Read Complete Article HERE>»

Fed to Keep Rates Higher Even Longer; CU Economists Still See Chance for Cuts Soon

CU trade economists think another good inflation report or two might convince the Fed to lower rates twice this year. By Jim DuPlessis | June 12, 2024 at 04:11 PM Fed Chair Jerome Powell speaks at a news conference in Washington, D.C., Wednesday afternoon. The Fed kicked the can down the road Wednesday, keeping rates at their current high level and signaling that it will take more time in reducing them. The Federal Open Market Committee (FOMC) ended its two-day meeting Wednesday with a decision to maintain the federal funds rate at 5.25% to 5.50%. Its projection report showed half of FOMC members expect the rate to fall to 5.1% by year's end, indicating one 25-basis-point rate cut this year. In March, the median expectation was for two rate cuts. Fed Chair Jerome Powell said half of members expect rates will fall to 3.1% by end of 2026. The FOMC's four remaining meetings this year are July 30-31, Sept. 17-18, N...

Read Complete Article HERE>»

NCUA"s new video module provides best practices for merging

The three-part video module provided by NCUA, available online here , examines current trends in mergers, when a credit union board should consider a merger and how to negotiate a merger agreement that best serves the credit union’s interests. Every credit union should discuss the possibilities of a future merger in their strategic planning.

Read Complete Article HERE>»

Is it a ‘skip’ or a ‘pause’? Federal Reserve won’t likely raise rates next week but maybe next month

WASHINGTON — Don’t call it a “pause.” When the Federal Reserve meets next week, it is widely expected to leave interest rates alone — after 10 straight meetings in which it has jacked up its key rate to fight inflation. But what might otherwise be seen as a “pause” will likely be characterized instead as a “skip.” The difference? A “pause” might suggest that the Fed may not raise its benchmark rate again. A “skip” implies that it probably will — just not now. The purpose of suspending its rate hikes is to give the Fed’s policymakers time to look around and assess how much higher borrowing rates are slowing inflation. Calling next week’s decision a “skip” is also a way for Chair Jerome Powell to forge a consensus among an increasingly fractious committee of Fed policymakers. One group of Fed officials would like to pause their hikes and decide, over time, whether to increase rates any further. But a second group worries that inflation is still too high and would prefer tha...

Read Complete Article HERE>»

Involved in a data breach? Here’s what you need to know

Involved in a data breach? Here’s what you need to know Posted: September 21, 2023 by Anna Brading If you've received a message from a company saying your data has been caught up in a breach, you might be unsure what to do next. We've put together some tips which should help you when the (more or less) inevitable happens. 1. Check the company’s advice Every breach is different, so check the company's official channels to find out what's happened and what data has been breached. Organizations often put out a rolling statement on their website, blog, or X (Twitter). Follow any specific advice they offer first, and keep an eye out for any further communications. 2. Change your password If your password has been caught up in a breach, you should immediately change it. If you've used the same password on another site or service then you also need to change that. Cybercriminals will often try one password on multiple sites because they know people reuse them, so make s...

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 ...

Read Complete Article HERE>»

7 Things to Do (And Avoid) with SMS/Text in Credit Union Marketing

By not using SMS text messaging for marketing, you are missing a channel with a 98% open rate and a rapid response rate. Consumers love the convenience and are open to receiving personalized and relevant texts from their bank and credit union. Naturally there are some caveats to be aware of. Here are seven pointers. Are you content to have your customers take 90 minutes to respond back to a communication you’ve sent, or would 90 seconds be better? That’s the difference in average response times between email and SMS text. Then there is the open rate: SMS texts have high open rates — up to 98%, according to Gartner and 82% by another source. The average open rate of email is around 20%. If you send an email with a link to a survey to find out what a consumer thinks about the virtual meeting with a lending officer they just had, it may linger in the consumers’ inbox for days, at which point the experience is no longer top-of-mind or the consumer decides to simply delete the ...

Read Complete Article HERE>»

NCUA promises flexibility in examinations and the flexibility to prudently adjust or alter member loan terms

In an effort to help members through the coronavirus crisis, the NCUA will give credit unions the flexibility to prudently adjust or alter member loan terms and will not subject those decisions to “examiner criticism,” agency Chairman Rodney Hood said Monday. Hood, in a letter to credit unions , outlined the steps the agency is taking to address the health emergency. Those steps include requiring all agency staff to work offsite through March 30. All examination work will be conducted offsite as well, the agency said. “A credit union’s efforts to work with members in communities under stress may contribute to the strength and recovery of these communities,” Hood wrote in outlining steps that credit unions may take to help members. Those steps include: Waiving ATM fees and increasing ATM daily cash withdrawal limits. Waiving overdraft fees. Waiving early withdrawal penalties in time deposits. Easing restrictions on cashing out-of-state and non-members checks. Easing credit terms f...

Read Complete Article HERE>»

First-responder Credit Union Newsroom

Search This Blog