New MDT White Paper Helps Credit Unions Connect Tech Budgets with Strategic Vision

By W.B. King

Nearly 47% of credit unions plan to increase their technology budgets by 6–10% in the coming year, but approximately 90% of that technology budget is earmarked for maintaining the status quo—leaving little for innovation. This was among findings in MDT’s latest white paper, Overcoming Budgeting Pain Points for Credit Unions—A Strategic Look at Budgeting Challenges Facing Credit Unions and the Lessons They Revealed.

Supporting over 100 credit union clients, the Farmington, Mich.-based MDT offers cloud-environment and consulting solutions aimed at enabling effective digital transformation.

The impetus for the white paper, explained MDT’s Tracie Loudermilk, vice president of project and consulting solutions, is a recognition that budgeting season is often challenging for credit unions that are charged with connecting vision to action, aligning stakeholders, and empowering executives to lead with confidence.

“In today’s evolving and fast-paced environment, budgeting is more important than ever. However, many credit unions still struggle with outdated practices, siloed processes, and underestimated costs,” said Loudermilk, who was recently featured in Finopotamus’ “Women in Technology” series. “As credit unions face growing technology demands and tighter margins, MDT strives to help leaders align their budgets with solutions that deliver meaningful impact by guiding clients through the fintech ecosystem and turning budgeting from a financial exercise into a platform for achieving strategic goals.”

Tech: A Growing Share of Budget Spend

The report stressed that technology budgeting is perhaps the hardest line item to execute at credit unions, and as such, great care should be taken when considering forward-looking strategies. “Even when projects are well-scoped, evaluating options—along with unexpected costs such as vendor renewals, compliance requirements, or implementation delays, can disrupt forecasts and timelines. These budget variances can have outsized impacts when technology represents a growing share of credit union spend.”

Tracie Loudermilk

MDT Strategic Partnerships Manager Eric Gubka added: “Technology expenses have a way of adding up in ways that aren’t always clear at the outset. You may budget for a new platform, only to realize later that factors like integration work, or other adjustments need to be accounted for to make it fully effective.”

According to MDT, the five most common underestimated tech costs are:

• Training staff on new technology.

• Data integration or migration services.

• Implementation support.

• Project delays that push spending into new fiscal years.

• Vendor license renewals and escalators (built-in contractual costs that increase over time).

  
  

The report also reminded executives to always ask the following question: “What’s the total cost to deliver value—not just to launch a tool, but to ensure it’s adopted, effective and sustainable?”

Augmenting Judgment

With artificial intelligence (AI) being a perennial tech buzzword that impacts both back office and member-facing operations, the reports noted that AI doesn’t replace leadership judgment, it augments it. “The budgeting process is entering a new era. Emerging technologies—particularly AI, machine learning, and advanced analytics are reshaping how organizations plan, forecast, and allocate resources."

When determining whether to invest in AI solutions, the report offered four compelling reasons:

• Predictive Modeling: AI can analyze member behaviors, lending patterns, and economic indicators to project more accurate revenue and expense trends.

• Scenario Planning: Automation makes it easier to test “what if” scenarios such as rising interest rates or shifts in deposit flows without weeks of manual number-crunching.

• Error Reduction: Automated data integration minimizes spreadsheet errors and version control issues that often undermine confidence in forecasts.

• Continuous Insight: Rather than locking into an annual budget, AI tools support rolling forecasts that adapt dynamically to market and member needs.

  
  

“Credit unions that embrace these [AI] tools with governance can move beyond backward-looking, static budgets and instead adopt agile, rolling forecasts that respond to real-time changes,” the report stated.

A Living Framework for Action

The white paper also focused on topics such as “Budgeting Pain Points: What Credit Unions Are Telling Us,” “Common Budgeting Mistakes and What to Do Instead,” “Regulatory and Compliance Considerations,” “Technology Tools and Indirect Costs,” and “Bringing Strategy and Execution Together.”

The white paper offered the following advice to credit union executives: “At its core, budgeting isn’t just about managing dollars, it’s about directing them with intention. When rooted in strategy and shaped through cross-functional collaboration, budgets become more than a ledger. They become a living framework for action, accountability, and adaptation.”