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  • Writer's pictureW.B. King

New Co-op Report Finds Credit Union Member Relationships Are Increasingly Fragmented

Updated: Jun 16, 2023

By W.B. King

As consumers traverse rising inflation and interests rates, they have a desire for financial transactions that are streamlined. To better understand the psychology behind consumer payment behavior, Co-op Solutions partnered with MasterCard and EY in a new report: CO-OP CU Growth Outlook: Fueling Financial Performance Through Daily Interactions.

“Whereas trust in financial services used to be defined by safety and security, today it is based on capabilities,” the report stated. “As a result, financial institutions are now competing intensely for the industry’s greatest resource: the attention span of the consumer.”

In collaboration with the Rancho Cucamonga, Calif.-based Co-op Solutions, EY conducted a market research survey of 2,001 current credit union members and 1,019 credit union prospects across all regions of the U.S. to determine preferred banking behaviors. The report surveyed a mix of demographic groups covering multiple generations, income levels and asset sizes. Additionally, Co-op engaged Mastercard to conduct a survey of 406 credit union members and 736 non-members on payment and purchasing behaviors.

Among findings was that member relationships are increasingly fragmented, with credit union members having on average three times the number of financial relationships as non-credit union members.

“While price remains a top consideration, both members and prospects show a preference for financial products that offer additional ‘convenience’ features along with rates that are on par with the market,” the report continued. “Digital payments have continued to grow in usage and have emerged as the primary driver of daily interactions and member engagement, with 45% of respondents citing engagement as the top reason for maintaining a primary relationship with their financial services provider.”

Credit Unions Need to Grab Hold of the Competitive Edge

Fifty-seven percent of respondents said they are experiencing a

negative impact to their lifestyle due to current economic conditions, and 45% indicated engagement as the top driver of primacy. Credit unions’ primacy, the report noted, is based on character and critical product. “Banks and fintechs earn this spot based on interactive convenience.”

“With relationships increasingly fragmented across multiple providers, consumers are having difficulty viewing their entire financial picture,” the report stated. “They need help, and they are increasingly turning to highly interactive products and services to support their daily financial management needs.”

For credit unions to effectively compete with banks and challenger fintechs, the report finds that credit unions must offer “competitive financial tools focused on meeting their members’ daily micro-transaction needs.” This effort should be coupled with financial services guidance that provides long-term value.

“Credit unions must focus on winning the moments that matter, by capturing micro to macro money management through daily engagement,” the report stated. “This is achieved by offering convenient digital micro-interaction solutions that help members with their daily money movement and management, allowing the credit union to become embedded in their members’ daily financial lives.”

When basic credit union offerings are enhanced with convenience and guidance features, the report found that the basic offering rate of 7% increased to 41%. “Credit unions will have success by combining outstanding digital convenience with expert, trusted guidance and competitive rates.”


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