New Data: Self-Service Innovation Emerges as Key to Credit Union Retention and Growth

Credit union (CU) members tend to value benefits such as personal service and a sense of community associated with CUs. Data reveals, however, that CU members increasingly show interest in self-service options and the convenience they provide. Like many digital-first consumers, CU members increasingly expect a seamless user experience across digital and physical channels. As a result, they choose providers that are up to speed on the latest innovations.

Ongoing innovation in self-service banking — including online and mobile options and the ability to use any ATM — can help CUs stand out, especially among younger consumers. For instance, nearly one-quarter of Generation Z and bridge millennials choose a financial institution (FI) based on self-service banking convenience and user experience. CUs that innovate in self-service banking are well positioned to grow memberships among younger consumers — especially Gen Z.

These are just of the findings from “How CUs Can Drive Engagement with Self-Service Banking Innovation,” a PYMNTS Intelligence and Velera (formerly PSCU/Co-op Solutions) collaboration. This report examines how self-service banking innovation can help CUs retain their current members while attracting new ones. It is based on a census-balanced survey of 4,551 U.S. consumers investigating which products and features consumers want and expect from CUs. The survey was conducted between Feb. 29 and April 8.

Other key findings from the report include:

Self-service banking innovations are popular with all members, but millennials are most likely to say they rely on ATMs.

More than six in 10 CU members say they rely on online banking the most when accessing financial services. Mobile and online banking are the most popular among Gen Z consumers, but only by a narrow margin. Meanwhile, at 14% each, millennials and bridge millennials are the most likely to use ATMs the most. These findings highlight the importance of self-service banking options in driving CU membership growth, especially among younger consumers.

CU members mainly using ATMs are twice as likely as in-person banking members to choose a CU as their primary bank for self-service banking.

Data shows a correlation between how consumers most often access financial services and their interest in self-service banking convenience. While 18% of CU members who prefer using ATMs say self-service banking convenience is important when choosing to use a CU as their primary FI, just 9.1% of CU members who prefer in-person banking say the same. CUs wanting to reduce churn and attract new members need to focus their innovation efforts on providing self-service banking.

Lack of familiarity and restrictive credit offerings deter many younger consumers from joining CUs.

Better marketing may be necessary to convince the many non-CU members to join a CU. For example, millennials are the most likely to say unfamiliarity with CUs is a reason for not becoming a member. Gen Z is more likely to cite restrictive credit offerings as a reason for not choosing a CU.

CUs need a multipronged approach to attracting new members while retaining current ones. Ongoing self-service banking innovation can help CUs engage Gen Z members today and into the future. However, they cannot neglect user experience, marketing and lending criteria. Download the report to learn how leading CUs are innovating to attract digital-first consumers.