Younger members and small businesses are redefining banking. If you can engage, understand, and grow with them, you will shape the next decade of deposits, payments, and profitability. If you cannot, you risk becoming invisible infrastructure behind more agile platforms.

The Growth Engine Has Shifted

For decades, you grew by expanding deposits and deepening existing relationships. Today, that engine has changed. Gen Z and emerging small business owners, or “bizumers,” are driving new account formation, payments activity, and future deposit growth.

Small business accounts, often created by younger entrepreneurs, hold significantly larger balances than retail accounts and deliver more durable growth. Yet these relationships are increasingly captured upstream by fintech platforms that own the payment experience and, in turn, the member relationship.

In this environment, payments are no longer just a utility you provide. They are how you engage. They are your gateway to data, deposits, and long-term loyalty.

Rebuilding Generational Banking In A Fragmented World

You can no longer rely on the traditional model of generational banking. Serving families over decades through a single relationship is no longer the default.

Your members maintain relationships with multiple financial providers, while you hold only a portion of their financial data. The fragmentation limits your visibility, weakens engagement, and restricts your ability to anticipate needs.

Align your services with moments that matter, such as first jobs, business formation, homeownership, and wealth transfer. Build family-centered experiences through co-managed accounts and integrated personal and business banking.

Most importantly, stop treating Gen Z and SMB as separate strategies. They are deeply connected. The same member managing a personal account today may be running a business tomorrow. If you can identify that activity early and serve it with relevant tools such as lending, payments acceptance, and cash flow insights, you position yourself to capture long-term value.

AI And Data: Your New Competitive Advantage

You are no longer competing on products alone. You are competing on data.

Today, you likely have only partial visibility into your members’ financial lives. Without complete data, you cannot deliver the AI-driven experiences that your members increasingly expect.

Treat AI as a way to scale relationships. Leading financial institutions are already using it to deliver personalized insights, automate decisions, and engage accountholders in real time.

The shift to make is from transactional banking to predictive banking. Payments data is one of your most valuable assets. It gives you a real-time view into behavior and intent. When you capture and activate that data, you can anticipate needs, deliver relevant solutions, and embed yourself more deeply into your members’ financial lives.

The Hybrid Monetary Era: Risk And Opportunity

At the same time, you are entering a hybrid monetary era. Traditional currencies now exist alongside tokenized deposits, stablecoins, and blockchain-based payment rails.

This creates pressure on your core business. New forms of digital money can shift deposits and payments outside of your credit union. It also creates opportunity. You are uniquely positioned to act as the bridge between traditional finance and emerging on-chain ecosystems.

If you enable seamless movement between fiat and digital assets, you can position yourself as a trusted on- and off-ramp. That allows you to maintain your central role while participating in new value flows. To do this, evolve your infrastructure. A hybrid ledger connecting your foundational core with emerging networks will become essential as adoption grows.

Leadership Imperatives

To compete effectively, focus your strategy on four priorities:

• Design for the next generation by building experiences that reflect digital-native behaviors.
• Reclaim payments and SMB relationships where the next wave of deposits is forming.
• Invest in data and AI at scale to turn fragmented insights into predictive intelligence.
• Modernize your infrastructure to support seamless money movement across ecosystems.

Those that lead will own the relationship layer, activate the data layer, and enable the movement of money across every form it takes.

Ready to refine your strategy? Explore the full 2026 Strategy Benchmark for deeper insight and peer benchmarks.

The post Competing For Gen Z, SMBs, And The Future Of Money appeared first on CreditUnions.com.

But financial readiness doesn’t begin when a young adult applies for a product. It’s built long before that, through years of small decisions, everyday habits, and early experiences with money.

That’s where the gap sits. Many institutions evaluate readiness. Far fewer help build it.

The Relationship Starts Earlier Than You Think

Long before a young adult opens an account, they’re already forming financial habits and opinions about who they trust with their money. By the time a credit union makes its first offer, much of that foundation is already in place.

The institutions winning the next generation aren’t simply targeting 18-year-olds. They’re showing up earlier, during the years when habits and trust are still being shaped.

And if a credit union isn’t part of that process, someone else is. Fintech apps have figured this out, and they’re winning one family at a time.

What Families Are Actually Looking For

Parents aren’t looking for another app. They want practical ways to turn everyday moments into real lessons.

• A 10-year-old saving up for a new game and tracking their progress.
• A 13-year-old learning to split money between spending, saving, and giving.
• A 16-year-old managing their first paycheck with a little guidance alongside them.

These experiences are happening right now, with or without a credit union involved.

That’s exactly the gap Boucoup was built to fill, a family banking platform that helps credit unions build relationships with parents and their kids today and turn them into members for life.

Why This Is A Credit Union Conversation

Credit unions were built to help members, families, and communities make better financial decisions throughout their lives. Family banking is where that mission gets to show up earlier.

When a parent helps their kid save for the first time, that’s financial wellness in action. When a teenager learns to manage a paycheck with guidance, that’s the real-world education credit unions have always believed in. When a family builds a relationship with their credit union before they ever need a loan, that’s community, deepened.

At Boucoup, we call this the Win-Win-Win:

Parents get practical tools to teach financial responsibility at home. Kids and teens build genuine confidence through real money experience. And credit unions get to live their mission during the years it matters most, growing household relationships long before any competitor enters the conversation.

The Window Doesn’t Stay Open Forever

The years between childhood and adulthood are when financial habits take root and trust is decided. The institutions that show up during that window are earning a place in someone’s financial life before anyone else gets the chance.

Every day, families are choosing tools, forming habits, and deciding whom they trust. That process isn’t waiting for anyone.

The credit unions that win the next generation will be the ones that showed up earlier, when habits were forming and trust was still being earned.

Boucoup is a family banking platform built for credit unions, helping institutions reach parents, kids, and teens long before traditional membership begins.

Families are forming financial relationships right now. See how credit unions are using Boucoup to be part of that decision. Request a demo.

The post The Financial Readiness Gap: Credit Unions Evaluate It Every Day. But Who Builds It? appeared first on CreditUnions.com.

Look at the data from the FBI. Losses from cyber-enabled fraud hit nearly $20.9 billion in 2025. That is a massive leap from $12.5 billion in 2023 and a staggering jump from just $4.2 billion in 2020.

Financial institutions handled more than a million fraud claims last year. According to the Federal Reserve, debit card fraud and check scams dominate the sandbox alongside payment app exploits. Unfortunately, older adults are frequently caught in the crosshairs.

Here’s the thing: Artificial intelligence didn’t start the fraud fire. It just doused it with gasoline.

Criminals are leveraging AI to scale operations at a terrifying pace. We are talking about voice-mimicking deepfakes, flawless altered documents, and hyper-personalized phishing campaigns. It lets bad actors exploit synthetic identities and attempt account takeovers with absolute precision.

For credit unions, this hits close to home. Your biggest strength is your member-first philosophy. It builds incredible community trust. But fraudsters know this, and they actively exploit that very trust to manipulate vulnerable members who expect safety.

More Tech Isn’t Always Better

Many credit unions are fighting back by deploying AI tools to catch check fraud. They are adopting behavioral analytics while enhancing biometric identity verification. They are also automating document processing to support Bank Secrecy Act compliance. They pair these tools with front-line staff training and excellent member education.

No model catches everything. The strongest fraud defenses combine AI-driven detection with experienced people who know when to intervene.

Even so, implementation across the industry remains uneven. Legacy systems don’t play nice with modern software, and smaller institutions face real resource constraints. Then there’s the governance question. If an AI system flags a transaction, you need to be able to explain the logic to an auditor. You cannot simply trust a black box.

Do you know what happens when credit unions just pile on more tools to solve this? They get buried under alert fatigue. Think of it like putting six different security alarms on your house. If the sirens go off every time a neighborhood cat walks past the window, you eventually start ignoring the noise altogether. That is exactly when the real threat slips through your front door.

The goal shouldn’t be acquiring more technology. The goal is investing in better technology. When you evaluate fraud prevention platforms, look for three critical elements:

• Transparency — The logic must be clear and auditable.
• Flexibility — The Technology must adapt as criminal tactics change.
• Experience — You need partners who actually understand financial workflows.

It’s important to remember: No model catches everything. The strongest fraud defenses combine AI-driven detection with experienced people who know when to intervene.

The Irreplaceable Human Element

Let me explain why the human element remains completely irreplaceable. Software is great at spotting data anomalies, but it completely lacks intuition. An experienced fraud investigator understands context, nuance, and member behavior in a way lines of code never will.

Fraudsters are already using AI to operate faster and smarter, and credit unions have to match that speed. The real challenge today isn’t deciding whether to use AI. It is figuring out how to deploy it responsibly, choosing the right partners, and maintaining the perfect balance between high-tech tools and human judgment.

Ati Azemoun is vice president of business development at ParaScript, where he has spent the past seven years driving growth, partnerships, and market expansion. He has led sales and partner enablement teams supporting a wide range of fintech organizations, including leading check fraud prevention solution providers. With more than 20 years of experience in recognition technology and AI-based systems, Ati brings deep expertise in solution implementation and delivery. His work focuses on helping organizations enhance operational efficiency, reduce risk and successfully adopt advanced automation technologies. Ati’s combination of technical knowledge and business development leadership provides a unique perspective on aligning innovative solutions with real-world business needs.

ParaScript is the global leader in AI-powered document automation and fraud prevention. Trusted by the world’s leading financial institutions, government agencies, and service providers, ParaScript’s proprietary artificial intelligence processes more than 100 billion documents annually with unparalleled precision. Specializing in high-volume check fraud detection, ParaScript replaces unreliable and inefficient manual reviews with forensic-level handwriting analysis, biometric signature validation, and sophisticated alteration detection. By enabling true straight-through processing, ParaScript empowers organizations to drastically reduce operational costs and stop sophisticated fraud before it ever impacts the balance sheet.

The post Defending Your Credit Union Against Fraud Means Fighting Fire With Smarter Fire appeared first on CreditUnions.com.

For decades, credit unions have built their value on trust, community relationships, and a commitment to serving the middle market. While that remains core, credit unions must also adapt. The way money moves is changing quickly, and stablecoins are emerging as one of the clearest signals of where financial infrastructure is headed.

Once viewed as niche or experimental, stablecoin is becoming a foundational layer of modern money movement. Because adoption is still in its early stages, credit unions and community banks have a meaningful window to help shape how these rails are designed, governed, and used.

This is critical because today, much of digital payments innovation is driven by large banks, fintech platforms, and wallet providers. If community-based institutions wait too long, they risk operating within standards set by others rather than helping define a system that reflects their own values, economics, and member relationships.

At its core, a stablecoin is simply a digital dollar pegged to a stable, real-world asset — usually the U.S. dollar — that can move instantly and at lower cost than traditional rails. But for credit unions, its importance goes beyond speed or efficiency. It’s also about access.

Growing Demand For Digital Dollars

Credit unions collectively serve tens of millions of Americans and represent more than $2 trillion in assets nationwide. Yet many of the consumers and small businesses they support, especially those in the middle market, still face friction when it comes to moving money or limited access to modern digital tools. Stablecoin has the potential to directly address those gaps.

By enabling near-instant settlement between parties and reducing the cost of transfers, stablecoin infrastructure can support faster loan funding, more efficient participation lending, and more seamless peer-to-peer, merchant, and cross-border payments. For members, that translates into real-world impact: quicker access to funds, lower fees, and greater financial flexibility. If credit unions can’t provide that, members will find someone else who can.

Stablecoin’s Ability To Improve Experience And Expand Access

When financial tools become faster, cheaper, and more programmable, they become more accessible to consumers and businesses that have historically been underserved or overlooked by larger institutions. The same dynamic applies for the adoption of digital payment models and aligns directly with the credit union mission: meeting people where they are and helping them achieve their financial goals.

But realizing this potential requires active participation from the credit union system itself. Stablecoin is still an emerging space, and key standards, governance models, and economic structures are being defined in real time. If credit unions aren’t at the table, they risk inheriting a system designed without their values, or their members, in mind.

A Credit Union-First Approach

At TruStage, we have relationships with 93% of credit unions nationwide, so we’ve seen firsthand where stablecoin solutions can help the industry as a whole. Earlier this year, we announced the development of TruStage Stablecoin (TSDA), a stablecoin tailor-made for community-based financial institutions. This isn’t about introducing a proprietary product. It’s about building a shared infrastructure that credit unions can trust, influence, and scale over time.

The strong engagement we’ve seen with our initial TSDA announcement makes clear that credit unions recognize that this moment matters, and they want to help define the next era of money movement.

That Work Is Just Beginning

For credit union leaders who want to better understand what stablecoin means for their institutions, and how to engage, the conversation continues at this year’s Discovery Conference, register today. I look forward to sharing more about what we’re learning, where we see the greatest opportunity, and how credit unions can take the next step forward.

The views expressed here are those of the author(s) and do not necessarily represent the views of TruStage. TruStage is the marketing name for TruStage Financial Group, Inc., its subsidiaries, and affiliates. Corporate headquarters are located in Madison, WI.

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Brian Kaas is senior vice president of corporate development at TruStage. He is responsible for sourcing, evaluating, and executing a broad range of strategic transactions for the organization. Additionally, Brian serves as the president and managing director of TruStage Ventures, LLC, and oversees all aspects of its venture capital program. He is a frequent speaker on fintech trends and routinely advises credit unions on best practices for leveraging partnerships with fintechs. He also serves as a board member for several banking technology, lending, and fintech companies.

Prior to joining the company in 2012, Brian was a law partner at Foley & Lardner. He has a broad range of legal and corporate experience in complex commercial transactions, including mergers, acquisitions, reinsurance, and corporate restructurings. Brian graduated from the University of Wisconsin Law School with a Juris Doctorate.

The post Stablecoin Is Credit Unions’ Opportunity To Lead — Not Follow appeared first on CreditUnions.com.

I recently spent some time catching up on the latest industry insights here on CreditUnions.com, specifically regarding the strategic priorities guiding credit union executives as they continue through 2026 and beyond. It’s clear that while the specific technologies change, the fundamental question keeping credit union leaders up at night remains the same: How do we stay relevant in an increasingly crowded landscape?

That question is one I’ve spent the better part of my career answering. My perspective was shaped first from the inside as an industry sales executive, and over the past decade, as a co-founder and partner of Arriba Advisors. During my time on the vendor side, I realized my true calling lived beyond just managing tech and that my passion was advocating for the financial institutions that serve as the backbone of our economy. I saw firsthand how often credit unions were at a disadvantage.

Current industry analysis points toward two clear priorities for 2026: a growth mindset and a sharp tech focus. I couldn’t agree more. But after a decade of helping financial institutions negotiate more than 2,000 contracts, we’ve learned you can’t achieve one without mastering the other.

Growth Mindset Needs A Modern Engine

There is a major emphasis right now on organic growth through digital channels. This is the right move, but the fact is, a growth mindset is only as effective as the core that powers it.

If your growth mindset is being held back by a legacy core or a digital banking suite that feels like a relic of 2016, you’re fighting an uphill battle to not only attract new members but also retain current ones. Many executives believe they are too locked into their current situation or that a full core processing evaluation is too strenuous to undertake.

I won’t sugarcoat it: the evaluation process is strenuous. Identifying the right technology partner requires a deep dive into functional requirements, future scalability, and cultural alignment. However, it is also the only way to ensure your digital transformation creates a seamless member experience.

The process is crucial to identify a technology partner that can actually enable your specific strategic goals.

Tech Focus: The Hundred-Vendor Web

The second priority often discussed today is a refined focus on technology, specifically regarding fintech partnerships and AI enablement. The common challenge is determining where technology creates real value.

From my perspective, the challenge is also how you manage the complexity of those choices. Today, a credit union with less than $1 billion in assets often oversees between 100 and 300 different vendors. That’s an enormous portfolio of contracts, renewal dates, pricing structures, and performance obligations.

And, most of those vendors negotiate these agreements every day; your team does not. This is where the balance of power can quietly shift.

Now more than ever, vendor contract negotiation is about ensuring that when you commit to a technology partner, the terms of that relationship actually reflect your institution’s leverage, your goals, and your long-term interests. We know where vendors have room because we’ve sat on that side of the table.

Real value is only realized when the contract protects your interests, ensures service-level accountability, and provides an exit strategy that doesn’t feel like a ransom.

How Credit Unions Level The Playing Field

The current roadmap for credit unions demands the right technology, the right partners, and the right guidance. At Arriba Advisors, that’s precisely what we provide through partner-level engagement and a track record of more than 2,000 negotiated contracts representing millions in annual value.

The roadmap is in front of you. We’re here to help you execute it.

Tom Russell is a co-founder and partner at Arriba Advisors, a strategic advisory firm that helps credit unions optimize member experience and achieve sustainable growth. With deep industry expertise, Arriba Advisors guides financial institutions through technology assessments, vendor evaluations, contract and price negotiations, and much more Contact him at trussell@arribaadvisors.com.

The post Growth Is A Mindset, But Success Is In The Contract appeared first on CreditUnions.com.

No longer solely a back-office issue, fraud attacks against credit unions are becoming faster, more technology-enabled, and more pervasive across all member touchpoints.

As digital capabilities advance, institutions must view fraud within a broader risk management framework, especially as financial crimes grow more scalable and irreversible, with schemes like business email compromise, cryptocurrency fraud, identity theft, and lending scams exploiting speed, anonymity, and control gaps.

But there’s also a way credit unions can protect themselves: by implementing practical solutions to counter threats. These include proactive approaches based on internal controls, training, monitoring, and governance, along with identifying weaknesses and addressing them before they can be exploited.

Barry Pelagatti, a partner in RKL’s Audit Services Group and leader of its Financial Services and Risk Management Service groups, shares insight from his 30 years of experience helping financial institutions across the Mid-Atlantic strengthen controls, respond to evolving threats, and manage risk in a practical, proactive way.

How does RKL support credit unions in preventing, detecting, and responding to fraud and identity theft?

Barry Pelagatti: RKL supports credit unions in designing risk-based plans focused on preventing, detecting, and responding to fraud and identifying theft by emphasizing strong internal controls, data protection, access management, security awareness, and incident reporting.

Internally, we focus on safeguarding sensitive information through restricted access, password controls, secure data storage, device security, ongoing training, and prompt reporting of lost devices or suspected unauthorized access.

These same practices help us support credit unions as we work with them to strengthen fraud prevention, improve detection of suspicious activity, and respond quickly to potential incidents.

What are the key fraud trends you’re seeing today, including some recent data and the rise of cyber-enabled and cryptocurrency-related schemes?

BP: Fraud trends today show that financially motivated crime is increasingly digital, fast-moving, and scalable. The FBI Internet Crime Complaint Center’s 2024 Report shows the Internet Crime Complaint Center has received approximately 836,000 complaints per year on average during the past five years, reflecting the persistent nature of online fraud. The report also highlights that cyber-enabled fraud accounted for roughly 38% of 2024 complaints but nearly 83% of total reported losses, with approximately 333,981 complaints and $13.7 billion in losses.

Investment scams were the largest category by reported loss at about $6.57 billion, whereas business email compromise caused roughly $2.77 billion in losses. Cryptocurrency continues to play a major role due to its speed, pseudo-anonymity, and limited recovery options, with more than $9.3 billion in losses in 2024.

Common payment channels include cryptocurrency, wire transfers/ACH, debit and credit cards, peer-to-peer payments, and gift cards. Overall, fraud is becoming more technology-enabled, more cross-border, and harder to reverse once funds leave the victim’s control.

How are fraud schemes evolving, and what should credit unions know about identity theft risks, modern scam tactics, and loan fraud red flags?

BP: Fraud schemes are evolving by blending traditional deception with modern technology, social engineering, and increasingly realistic fake documentation.

Identity theft remains one of the fastest growing crimes, with fraudsters targeting personally identifiable information such as Social Security numbers, addresses, driver’s license numbers, email credentials, insurance data, and loan information.

Tactics include phishing, spear phishing, vishing, smishing, pharming, skimming, mail theft, pretexting, typo-squatting, and whaling. Newer scams like “pig slaughtering” involve building trust over time before steering victims into fake investment platforms, often involving cryptocurrency.

An important takeaway is that scams are no longer always crude; fake websites, executive impersonation, and AI-assisted document creation can make fraud attempts appear legitimate. On the lending side, red flags include unusually large loan requests, questionable repayment terms, inconsistent or forged documentation, discrepancies in personal information, frequent applications, and reluctance to provide supporting details.

What practical steps can credit unions take to strengthen fraud risk management, including detection methods, internal controls, employee training, and overall risk strategy?

BP: Credit unions can strengthen fraud risk management by starting with a formal fraud risk assessment that identifies vulnerabilities, measures risk, and connects those risks to specific control activities.

Strong internal controls are foundational, especially since fraud often arises from control weaknesses. Key measures include segregation and rotation of duties, mandatory vacations, surprise audits, employee account reviews, and background checks for higher-risk roles.

Maintaining a confidential reporting system allows employees, agents, and the public to report concerns without fear of retaliation, which is critical since tips are a leading method of detecting fraud. Continuous monitoring, including automated tools, helps ensure controls are working as intended.

Employee training should be mandatory and ongoing, covering fraud awareness, warning signs, reporting procedures, and consequences. Targeted, frequent, recurring training is especially important for high-risk functions.

At a broader level, organizations should align fraud management with governance, oversight, and a prevention-first strategy, as prevention is generally more effective than recovery after losses.

To learn more about RKL, visit the firm’s website and follow RKL on Instagram, Facebook, X, and LinkedIn for updates on services, insights, community involvement, and career opportunities as well as information about RKL’s mission and values.

The post Fraud Is Faster, Smarter, And Harder To Stop. Here’s How To. appeared first on CreditUnions.com.

In this environment, traditional risk tools alone aren’t enough. As digital lending scales, portfolio protection must evolve to meet members within the lending experience itself.

What’s Changing In Borrower Behavior?

Economic pressures are reshaping how members approach borrowing and how confident they feel in their ability to repay. The TruStage 2025 Consumer Lending Preferences Research highlights this strain:

• Borrowers feel increasingly financially fragile.
  • 91% worry that a life event could impact their ability to make loan payments.
  • 73% have experienced at least one financial hardship.
• Repayment anxiety is becoming universal.
  • Eight in 10 consumers are worried about their ability to make their loan payment.
  • Rising inflation, income instability, and higher household debt loads are intensifying this concern.
• Demand for credit remains strong, despite stress.
  • Six in 10 Americans say the current economy makes them more willing to take out a loan for a major purchase or unexpected expense.
• Members want protection built into the lending experience.
  • 70% are more open to credit union payment protection than in prior years.
  • 96% prefer to learn about payment protection before finalizing a loan.

These shifting expectations set the stage for a thoughtful approach to mitigating risk while helping members feel supported and confident.

Why This Matters For Credit Unions

Missed payments are rarely the result of unwillingness to repay. More often, they’re triggered by short‑term disruptions — job loss, illness, injury — that affect multiple aspects of a household’s finances at once. Traditional credit indicators may not capture these real-time stressors, leaving both borrowers and lenders exposed.

Credit unions can protect members and strengthen portfolio resilience by embedding safeguards directly into the loan journey, along with continued face-to-face discussions with loan officers.

The Integrated Protection Approach

When lenders integrate payment protection in the loan workflow and include payment protection in the loan app, members gain confidence at the moments that matter.

In our research, 74% of borrowers said they expect more than one opportunity to learn about payment protection across the loan journey. With a multitouch, multichannel approach, you’re able to reach members when and how they prefer to learn about and consider this protection.

Embedded insurance for lenders is designed to help reduce delinquencies by giving borrowers a safety net, yet it avoids disrupting approvals or elongating cycle times. Think of it as portfolio resilience for lenders through a better member experience.

By presenting options seamlessly, lenders can improve conversion rates without the feel of an add-on sale.

Operationalizing It — Without Slowing The LOS

Credit unions can incorporate consumer loan protection solutions effectively by using user interface (UI) patterns that feel native to the loan origination system (LOS). Best practices include:

• Contextual prompts during pricing and terms review that explain how coverage helps mitigate loan default protection risks.
• Clear, plain‑language disclosures that build trust and support financial health protection.
• Real‑time selection and instant confirmation so protection carries through automatically.

The Leadership Opportunity

Today’s borrowers expect transparency, stability, and personalized support. By embedding payment protection insurance into your digital lending journey, you can help protect members from the financial stress they worry about most. It’s a practical way to keep credit flowing, maintain member trust and scale with confidence.

Learn how you can embed TruStage loan protection to support your members and your portfolio.

Danielle Sesko is the director of product management at TruStage. TruStage is the marketing name for TruStage Financial Group, Inc. its subsidiaries and affiliates. Corporate headquarters are located in Madison, WI.

The post Balancing Growth And Risk In Uncertain Lending Environments appeared first on CreditUnions.com.

The Challenge

4Front Credit Union’s ($1.0B, Traverse City, MI) contact center lacked the data and tools to guide staffing and scheduling decisions. Its reliance on manual reporting and an aging on-premises phone system led to inefficient shift coverage, high overflow call costs from a third-party partner, and inconsistent member experiences. At the same time, its agents faced burnout risks due to unclear break structures and unnecessary Saturday staffing, all without reliable data to justify scheduling choices.

The goal: Maximize efficiency, minimize costs, and provide members with the best service possible.

The Solution

4Front partnered with TTEC Digital to replace its on-premises contact center with Genesys Cloud and implement Workforce Management (WFM) software — a solution that predicts call volumes to ensure the right number of agents are scheduled at the right times.

The transition included structured training, extensive testing, and data-driven scheduling guidance. TTEC Digital also integrated SmartApps to streamline member authentication and prevent fraud within the new platform. Finally, the team built custom forecasting models and trained leaders to use data for scheduling and ongoing optimization.

The Results

By migrating its on-premises contact center to Genesys Cloud and implementing WFM capabilities, 4Front transformed its operational efficiency. Most notably, it achieved a 58% reduction in overflow calls sent to its third-party partner, keeping more interactions in-house.

This approach allowed 4Front to lower operating expenses, speed up service delivery, and reduce handle times, all while providing a more consistent and professional member experience.

Learn More About TTEC Digital’s:

The post Smarter Scheduling Delivers Faster Service And Lower Costs For 4Front Credit Union appeared first on CreditUnions.com.

Auto lending remains a cornerstone of credit union growth, but the foundation is shifting. Rising vehicle costs, record loan balances, and the rapid expansion of longer-term financing are creating a structural increase in negative equity that is reshaping both borrower behavior and portfolio risk.

Recent data confirms the scale of the shift. The average amount financed for a new vehicle reached a record $43,899 in Q1 2026 — nearly $44,000 committed to an asset that begins losing value the moment it leaves the lot¹. Monthly payments have climbed alongside that figure, and nearly one in five borrowers is now committing over $1,000 every single month just to keep a vehicle in the driveway.

When that payment is attached to a seven-year loan on a depreciating asset, it is not simply a financing decision. It is a financial trap that is becoming harder and harder to exit. These are not isolated data points. They reflect a broader change in how vehicles are being financed and what it takes for borrowers to remain in the market.

To manage rising costs, borrowers are increasingly turning to longer loan terms. Loans of 84 months or more now represent a growing share of originations, rising sharply in recent years. In some segments, particularly trucks and higher-trim SUVs, extended terms are becoming the default because they are often the only way to achieve a target monthly payment. For credit unions, this raises an important strategic question: are longer terms solving the affordability problem, or simply pushing risk further into the future?

Negative Equity Is Becoming More Common

Negative equity has long been a part of auto lending. What is changing is how persistent and widespread it has become — and how deeply its roots trace back to the pandemic.

During the pandemic, a semiconductor shortage created a severe shortage of new vehicles on dealer lots. Prices soared, and buyers, either flush with disposable income or lacking other transit options, paid up. That wave of inflated purchases is now coming back around. As those borrowers attempt to trade in, they are discovering that their vehicles are worth far less than they owe.

According to a recent Wall Street Journal analysis, about 30% of borrowers who traded in a vehicle in Q1 2026 carried negative equity, with an average shortfall of $7,200 — a 42% jump compared with the same period five years earlier⁷. Borrowers with negative equity financed an average of nearly $56,000 for a new vehicle in Q1 2026, roughly $12,000 more than the typical buyer, resulting in average monthly payments of $932 — the highest ever recorded.

The downstream consequences are significant. Consumers who rolled over negative equity from a prior vehicle loan were more than twice as likely to have their car repossessed within two years, compared with those who netted money on a trade-in, according to a 2024 study from the Consumer Financial Protection Bureau⁷. Default rates on car loans rose in March 2026 to their highest levels since 2010.

At the same time, affordability pressures are not easing. Used vehicle prices have recently increased by approximately $1,500 in a short period, adding further strain to both new and pre-owned buyers. As more consumers shift toward used vehicles to manage costs, they are encountering many of the same challenges.

The Trade-Off Behind Longer Terms

Extending loan terms has become the primary tool for maintaining affordability. It works in the short term by lowering monthly payments. However, it introduces longer-term risks for both borrowers and lenders.

Borrowers remain in negative equity positions for a longer portion of the loan. The likelihood of rolling that negative equity into the next transaction increases. Credit unions, in turn, carry exposure on depreciating collateral for extended periods.

In effect, longer terms address payment, but not financial sustainability. This creates a difficult balancing act. Without competitive payments, credit unions risk losing volume to dealerships and captive lenders. But relying solely on longer terms can increase portfolio risk and limit future lending opportunities.

A Structural Alternative To Extended Terms

Addressing affordability without compounding risk requires a different approach. Residual-based financing offers an alternative structure that changes how vehicle loans are built.

Instead of making payments on the full loan amount, monthly payments in a residual-based structure are calculated on the difference between the purchase price and a guaranteed future value set at origination. The result: lower payments without adding months to the term. At maturity, borrowers can keep the vehicle, refinance, trade, or walk away — a clean exit that breaks the negative equity cycle rather than extending it.

This shift creates several advantages. Borrowers can achieve lower monthly payments without extending terms beyond typical ranges, often 24 to 72 months. At the end of the term, they have clear options: keep the vehicle, refinance, trade, or return it and walk away from the remaining balance. Most importantly, this structure helps reduce exposure to negative equity by aligning the loan with expected vehicle value over time.

Supporting Both Member Outcomes And Portfolio Performance

For credit unions, improving affordability is not just about originating loans. It is about ensuring those loans perform over time. When borrowers are placed into payments they can realistically afford, the benefits extend beyond the individual transaction. Lower payment stress can contribute to stronger repayment behavior, improved member satisfaction, and more stable portfolio performance.

Residual based financing also provides a way to compete more effectively in a payment-driven market. Dealerships and captives continue to focus heavily on monthly payment as the primary decision factor. Without comparable options, credit unions risk losing relevance in both direct and indirect channels. By offering an alternative to extended-term financing, credit unions can maintain competitive positioning while managing risk more effectively.

Residual-based financing also delivers a meaningful yield advantage for credit unions because the loan amortizes to the guaranteed future value rather than to zero. This produces a higher effective yield compared to a conventional loan of the same term, an outcome that supports portfolio performance alongside the member benefits.

Expanding The Lending Toolkit

One of the more telling dynamics in today’s market is that many borrowers are not choosing longer loan terms because they want to. They are choosing them because they feel they have no other option. That perception presents an opportunity. Residual-based financing introduces another lever for managing affordability — one that does not rely on extending loan duration or increasing borrower risk. It allows credit unions to structure loans more strategically, balancing payment, equity position, and portfolio performance.

Looking Ahead

J.D. Power analysts have explicitly warned of a “day of reckoning” as negative equity balances and long-term loan exposure accumulate across lender portfolios. That language is striking because it signals not a gradual shift but a potential inflection point. The credit unions best positioned for what comes next will be those that moved before the pressure became acute, not those still extending terms and hoping the market stabilizes.

Negative equity is becoming more embedded in the auto finance system, driven by rising vehicle costs, higher payments, and the growing reliance on extended loan terms. Addressing this challenge requires a shift in approach.

By incorporating alternative structures such as residual-based financing, institutions can help members avoid or exit the negative equity cycle while maintaining competitive positioning and supporting long-term portfolio health.

The goal is not simply to make the next payment work. It is to ensure that each loan puts the member in a stronger position for the next financial decision.

If your credit union is still relying solely on term extension to compete on affordability, you are solving today’s payment problem while building tomorrow’s portfolio risk. Join us on May 19 to explore a different path.

Register for our live webinar, Beyond Conventional Auto Lending: The Advantages of AFG Residual-Based Financing, on May 19 at 1 p.m. CT / 2 p.m. ET, where we’ll explore how residual-based financing works and how it can help your credit union address affordability challenges, reduce negative equity exposure, and strengthen portfolio performance.

Auto Financial Group (AFG), a Houston-based company, provides an online, residual-based, walk-away vehicle financing product called AFG Balloon Lending, as well as vehicle leasing and vehicle remarketing to financial institutions across the United States. For more information about AFG, call toll free at 877-354-4234 or visit www.autofinancialgroup.com.

Tim Kelly is president and chief operating officer of Auto Financial Group. He has more than 25 years’ experience delivering solutions to financial institutions. Contact him at tkelly@autofinancialgroup.com.

The post The 84-Month Trap: How Negative Equity Is Quietly Undermining Your Auto Portfolio appeared first on CreditUnions.com.

Despite strong growth across the SMB segment, operational pressures remain high. Business owners manage fluctuating receivables, payroll timing, vendor payments, and rising costs — often simultaneously. Payment acceptance and expense tools are central to navigating those challenges. Merchant processing and business credit cards help smooth cash flow, extend payment windows, and give owners flexibility when inflows and outflows are misaligned.

Yet nearly 40% of SMBs still don’t use a business credit card, even though nearly half say they would pay for one offering digital tools and control over payment timing. That gap represents both unmet needs and untapped opportunity for credit unions.

Merchant services also play a larger strategic role. Payment processing is one of the most consistent touchpoints between an institution and its business members, generating recurring fee income while providing visibility into sales trends, revenue timing, and seasonal patterns. When those transactions move to third-party processors, credit unions lose not only revenue, but insight that could support more informed lending, treasury, and advisory conversations.

Community financial institutions already hold an advantage with SMBs. Seventy-six percent of small business borrowers report satisfaction with credit unions over large banks or online lenders thanks to relationship-based service and local expertise. However, that advantage can erode when merchant capabilities fail to match modern expectations. Ease of use, reliability, and integration with accounting and point-of-sale systems are now baseline requirements, not differentiators.

Technology expectations are accelerating. The vast majority of SMBs accepting in-person payments plan to upgrade their payment technology in the next year, and digital wallets and software-based platforms have become standard. Business owners want payment systems that reduce manual work, integrate with their existing tools, and support multiple payment methods without added complexity.

For credit unions, offering merchant services and business credit cards is no longer just about expanding product menus. It is about staying embedded in how members run their businesses. When payments, credit, and core banking work together, credit unions can protect long-term relationships, generate sustainable revenue, and remain the trusted financial partner SMBs rely on as they grow.

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