Preparing Credit Unions for a Transformative Decade Ahead

CUs must meet their current members' needs, anticipate their future needs and seek out a new generation.

By Pam Cohen | June 03, 2024 at 09:00 AM Credit/AdobeStock

As we navigate through an era of rapid change and economic uncertainty, credit unions stand at a critical juncture. The future beckons with both challenges and unprecedented opportunities, but by embracing innovation and focusing on member-focused services, credit unions can remain relevant and impactful in a space where consumers are quick to embrace brands with the most marketing dollars. As an industry we need to take a look at our current members, meet their needs, anticipate their future needs and seek out a new generation of members.

As we look to the needs of members in the next decade, the success of credit unions hinges on the ability to merge technological advancements with personalized service. You don't need me to tell you that members want digital access to their accounts, but they also desire trained staff to help them solve problems or better address their unique financial needs. Credit unions have historically always been better at personalized help than at leading in digital innovation. This is where leaders need to rethink the balance between the two and invest in digital tools and technology. Integrating artificial intelligence into operations will be crucial, allowing staff to focus more on member service rather than on mundane tasks or complex decision-making processes.

Parallel to the direct needs of members, credit unions face significant challenges in the form of regulatory changes and economic pressures such as inflation. Advocating for regulations that understand and address the unique challenges of credit union members can help ensure that our institutions continue to serve their communities effectively. The issue of overdraft fees exemplifies this, with many credit unions adopting less punitive fees to protect members during economic downturns. It is so important that credit unions balance financial health with member support, especially as purchasing basic necessities becomes an increasing burden for some. As inflation makes an impact on credit union balance sheets, it has a significant impact on members' ability to cover daily costs and in some cases manage debt repayments. Regulatory pressures to eliminate certain fees would have a direct impact on our industry's ability to assist them.

We are in a unique position as a local financial institution to foster member loyalty and attract new members. We are seen at the corner, and probably present at the local 5K charity event. To keep members coming back and garner new members we can't let our physical presence replace the importance of member experience. Initiatives such as training frontline teams in financial well-being strategies and leading with empathy are vital. Leadership must also support frontline initiatives with a robust back-office team and advanced technology to deliver seamless and supportive member services.

Those same frontline staff play a pivotal role in meeting the increasing demands for financial literacy. Credit unions have a pivotal role in educating their members. In addition to onsite assistance, we offer a mix of live seminars, recorded sessions, blogs and podcasts that allow members to choose the learning format that best suits their needs. These educational efforts not only empower members but also foster a community of informed and engaged individuals who can make sound financial decisions.

The rapid pace of societal change means that credit union employees must embrace resiliency. Change is normal, and rapid change is the new normal. By building an inclusive, safe and brave culture, credit unions can equip their staff to adapt to changes effectively. Training programs focused on unconscious bias, leadership skills and employee resource groups (ERGs) are crucial in developing a workforce ready for the future. Innovation within credit unions can flourish in an environment that promotes trust and authenticity. Encouraging staff to bring their whole selves to work and providing opportunities for growth through education and team challenges fosters a culture where creativity and innovation can thrive.

There is no grand plan available for success in the next handful of years. We have to rely on what we know from the experience that we have. Balancing digital transformation with people-centric practices is crucial for managing risks. Training teams to lead with empathy and integrating AI strategically can help maintain this balance, ensuring that both members and employees benefit. The resilience of credit unions in times of uncertainty will depend significantly on their ability to adapt and innovate while staying true to our community-oriented roots. As credit unions look ahead, we must navigate these changes with empathy, determination and resilience, ensuring they continue to serve their members with integrity and care.

Pam Cohen

Pam Cohen is Chief Administrative Officer for the $4.1 billion, Basking Ridge, N.J.-based Affinity Federal Credit Union.