Boston University Digital Business Institute Report Investigates CU Digital Transformation Journeys

By W.B King

Among topics covered in The State of Digital Transformation in Credit Unions: A 2025-2026 Outlook is that the industry is facing challenges of talent shortages, industry consolidation, fraud, and fragmented legacy systems.

“But in conjunction with these challenges lies the opportunity for credit unions to differentiate themselves in the market and provide even greater value to the members that trust and rely on them,” the report, published by Boston University Questrom School of Business, Digital Business Institute, noted. “The increasing use cases of artificial intelligence (AI), automation, personalization, and the power of clean, actionable data to drive deeper member engagement has become a value proposition that financial institutions cannot ignore.”

Boston University partnered with infocap.ai on its findings, which included that credit unions should navigate the “complexity of nearly infinite paths to the future-scaling through growth, while supporting and nurturing their member base.” The alternative isn’t promising, which is why they spoke with credit union executives who shared perspectives on their digital transformation journey.

“Our industry is plagued by disparate systems...hundreds of vendors, none of them talking perfectly to each other,” said Traci Michel, COO / chief strategy officer at Metro Credit Union. The $3.4 billion Chelsea, Mass.-based credit union supports more than 200,000 members.

“Many credit unions, especially small or mid-size, are caught between aging legacy systems and ambitious member expectations for seamless, digital-first experiences. In our interviews with credit union leaders, regardless of their role, they consistently described pain points,” the report stated. These include:

• Fragmented, siloed data across departments.

• Heavy reliance on slow, manual processes with frequent errors.

• Challenges in integrating new technology with fragile, outdated core banking systems.

  
  

“Credit unions are well-aware of these challenges and want to meet them. But they are held back by limited resources and significant constraints that hinder their capability to navigate the increasingly complex solution space,” the report continued. “For many credit unions, implementing new technology is a slow process.”

This sentiment was echoed by Christie Kimbell, EVP at Filene Research Institute. “I would say that credit unions are not even fast followers. I would just say they're followers. And for a fintech to get established, they need to have a lighthouse account,” she added. “They need to have somebody with credibility who has already implemented their solution.”

Focusing on What Matters Most

Since budgets can play a significant role in adopting innovative technology, the report points to AI as a solution. “Automation, especially robotic process automation (RPA), is not about replacing already busy staff, it's about empowering them,” the report noted. “Credit unions are exploring ways to reduce low value manual work and plugging gaps in expertise with technology, allowing their teams to focus on what matters most: members.”

Kimbell said it’s not simply adopting the latest tech but figuring out how to solve the right problems. To this end, the report outlined possible use cases:

• Intelligent Document Processing: streamlining loan applications, onboarding forms, and compliance checklists.

• Data Orchestration: unifying member data across core banking, CRM, and ancillary systems for a 360-degree view.

• AI-Enabled Member Support: deploying chatbots for routine inquiries, escalating complex or sensitive needs to staff.

  
  

“These solutions address real, daily frustrations. Frustrations that staff and members both experience,” the report continued. “By automating routine tasks, credit unions can reduce errors, improve speed, and—critically—free staff to deliver the personalized service members expect.”

A Culture of Continuous Improvement

As Metro Credit Union’s CEO Robert Cashman shared: “We’re competing with Amazon now. With Robinhood. With anyone offering a seamless experience.” As such, the report concluded that credit unions are at the intersection of tradition and transformation. “The challenges are significant—legacy systems, data fragmentation, resource constraints—but they are matched by opportunities for innovation and differentiation that are much simpler and less expensive to put into place than they have ever been.”

Noting that the path forward for credit unions is not a one-size-fits-all mentality, the report stated: “The dynamic playbook needed for success is taking shape. Embracing an iterative mindset: exploring new technologies with thoughtful investments, building on early wins, and fostering a culture of continuous improvement in the face of unrelenting change.”