Changes occurring as a result of and throughout the pandemic continue to inspire changes within the credit union space. Credit unions have been forced to evolve from a primarily face-to-face model and instead adopt advisory services and digital technologies to grow business. As Peter Longo, Senior Director, Product Management Digital at Finastra, tells FinTech Magazine, change is important to keep pace with existing and new competition.
Credit unions, Longo says, have been reallocating and staffing up in commercial and small business sectors, as well as cross-training employees and advisors to do more, as member needs change.
“Credit unions have typically thrived in lending, credit cards, and card spending. This has been disrupted due to the pandemic. Embedded finance competitors have come to the fore alongside community banks, that have historically refrained from going after microloans or smaller unsecured loans, but now look to explore this.”
But it is also more complicated than that, as Longo says embedded finance is cutting through into the credit union market, resulting in them needing to find ways to evolve their growth strategies and find new sources of income.
Credit unions typically depend on personal interaction around lending that dissipated during the pandemic which also led to an increase in deposit growth more typical of community banks and larger financial institutions. The resulting adoption of new technologies can support credit unions to replicate their personalized service within a digital footprint.
Overview by Jordan Hirschfield, Director of Research at Mercator Advisory Group
