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Empowering Credit Unions to Engage and Thrive with the Next Generation through increased digital offerings

20 Dec 2023
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The role of credit unions has expanded significantly in recent times, with extended loan capacity, mortgage provisions, and a shift towards greater digital offerings.

72% of people are now members of credit unions, with 46% describing themselves as active members.

However, with the right levels of digital services, new research commissioned by Metamo through Amárach shows the potential for further growth of membership by improved digital services, particularly among younger cohorts.

The research shows that the 18-24 demographic is:

  • More likely to say technology is important in managing their lives
  • More likely to use products from newer financial services organisations e.g., Revolut
  • More likely to say they know little about credit unions, and
  • More likely to view Credit Unions as ‘traditional with a simple product range’.

These findings suggest that increased digital capacity and expanded service offerings will allow credit unions to attract and retain younger members, thus delivering a sustainable future for the sector. However, these digital services may also bolster membership across other demographics.

Opportunity for digital expansion:

The research found that 79% of all consumers report that technology plays an important role in managing their lives. 58% of respondents said mobile phone apps were their preferred method of managing their day-to-day financials, with 54% saying the same for savings.

However, credit unions had the lowest rate of digital engagement when compared with other financial institutions; almost one-third (32%) of active credit union members said they never used their credit union app. Comparatively, across all respondents, 82% use Banking Apps, and 58% use Revolut at least once a week, with only 15% using a Credit Union App in the same period.

Furthermore, Banking Apps were selected as being the second most important app in day-to-day life (WhatsApp being first), while Credit Union Apps were ranked towards the bottom of the list and seen as unimportant overall.

These findings show a clear consumer demand for greater digital services – by increasing their digital offerings, credit unions have the opportunity to further expand membership and compete directly with pillar banks for the provision of financial services.

Modern or Traditional?

While overall credit unions are perceived positively across a number of attributes, 18-24s were consistently less positive, with this age group more likely to view credit unions as being traditional with a simple product range (60% of respondents in the 18-24 category were of this opinion, compared to an overall figure of 42%).

Just 27% of this age group recognised the considerable change that credit unions have undergone in the past five years.

Again, increasing the number of services digitally available to members offers an opportunity to shift this perception and highlight the full potential of credit unions.

Conclusion

To thrive and ensure continued success, it’s crucial for the sector to connect with the vibrant younger demographics and communicate the full suite of offerings that are available to them.

Credit Unions are evolving to provide a real alternative to the traditional pillar banks, but in order to deliver a sustainable and thriving future for the sector, they need to reach these younger demographics who are the financial services customers of the future.

Digitalisation is the way forward, and Metamo is here to empower Credit Unions to bridge this digital divide.

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