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.

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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.

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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.

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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:

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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.

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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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The Jack Henry Financial Sentiment Study: Consumer Report — a qualitative assessment of how people feel about their financial situations — reveals a paradox that every credit union executive should note: while 52% of consumers are satisfied with their current financial position, fewer than half (44%) feel knowledgeable about financial matters. This “confidence gap” is where the member experience is lost … or won.

Understanding The 5 Faces of Your Membership

Strategic segmentation is a secret weapon for turning data into deep loyalty. By grouping members into five distinct segments based on demographics and psychographics, you can provide the proactive support your members want.

• Legacy Lifestylers (Median Age, 72): These members are comfortably retired but show some of the lowest confidence in navigating financial decisions. They value the “human touch” and “protect” capabilities (like fraud alerts) more than anything else.
• Next-Stage Planners (Median Age, 55): Approaching retirement, this group is focused on budgeting and planning. They need proactive advisory alerts to help them move gracefully into their next chapter.
• Prime Earners (Median Age, 39): This is the most confident and satisfied segment. They’re in the thick of it — building careers and raising families. They demand high-value digital tools like account aggregation to manage their complex financial lives.
• Momentum Builders (Median Age, 26): These are optimistic young professionals facing frequent life changes like moving or starting new jobs. They prioritize convenience, rewards, and mobile-first tools.
• Opportunity Seekers (Median Age, 19): This youngest segment is the most underbanked and has the lowest confidence across all behaviors. They need simplified account opening and foundational guidance to build their future.

The Life Stage Influence: A Guide For Proactive Support

Financial confidence is not a steady climb; it follows a curve that heavily dictates the member experience. Confidence typically peaks with Prime Earners, who are the most satisfied with their financial knowledge (61%) and their financial institution’s role (82%). In contrast, confidence dips significantly for those under 25 and over 65.

This disparity reinforces why a 20-year-old student and a 70-year-old retiree can’t be adequately served with the same generic experience, because diverse life events trigger different needs:

• Opportunity Seekers experience the highest frequency of life events, averaging 2.7 per person. While this younger segment is navigating major shifts like moving (31%) or starting college (24%), they’re the least satisfied with their financial institution’s role in managing their financial wellbeing.
• Conversely, although Legacy Lifestylers report only 0.8 events on average, they show below-average confidence in planning and borrowing.

For credit unions, the member experience is defined by how well you bridge these gaps. The real opportunity for loyalty lies in guiding an Opportunity Seeker through a move or a Legacy Lifestyler through a health change — areas where satisfaction currently drops.

Elevating Member Experience Through Digital Table Stakes

There’s a disconnect between the services you’re providing and the digital expectations of your members. Features like easy bill pay and reporting lost cards (satisfied at 69% and 71% respectively) are now table stakes — members expect them to work perfectly.

To truly move the needle on the member experience, you must prioritize “impact” features:

• Data-Driven Education — Use your data — including account history and channel usage patterns — to share relevant insights and personalized content that help members feel more in control of their spending and saving.
• Event-Based Content — Deliver relevant advice exactly when members need it, like before buying a car or after a job loss.
• Account Aggregation — Allow members to see their full financial picture in one place to build trust and demonstrate your expertise.

From Insights To Action

Download the Financial Sentiment Study: Consumer Report for a deep dive into the trends shaping the future of banking.

And remember, the goal of segmentation isn’t just to organize data — it’s to meet members where they are with empathy and purpose. Read the Jack Henry Consumer Segmentation Guide to learn how to tailor your messaging, products, and services to the five personas to deepen bonds, remove barriers to financial health, and drive stronger adoption across your entire organization.

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As digital payments continue to expand and expectations move toward immediate, mobile-first interactions, the infrastructure supporting card programs is becoming more closely tied to how institutions compete and differentiate, shaping not only how transactions are processed but how products are introduced, refined, and experienced over time.

For many years, issuing was largely viewed as a processing function: reliable and essential, but mostly operational. That role is expanding. Increasingly, it is influencing how products are designed, how members engage, and how institutions respond to risk in real time.

The systems behind transactions are no longer simply supporting activity in the background. They are becoming part of how members experience their credit union on a daily basis.

Evolving Beyond The Traditional Trade-Off

Financial institutions have historically had to navigate a familiar constraint.

On one side were established platforms that offered stability but limited adaptability. On the other were newer systems that introduced flexibility, but often at the cost of added complexity or operational uncertainty.

That trade-off shaped much of the issuing environment over time, even as expectations continued to evolve.

There has been a growing recognition that this compromise does not need to persist.

An alternative approach is to design issuing as a unified platform where processing, risk controls, servicing, and operational capabilities are built together to function as a coordinated system, rather than assembled incrementally across multiple layers and integrations that introduce friction over time, as reflected in unified banking and payments infrastructure.

When those elements operate in alignment, institutions gain a clearer line of sight into how programs perform and a greater degree of confidence in how they execute.

For credit unions, that confidence tends to show up in subtle but important ways: transactions that complete without delay, cards that can be issued and used within moments, or unusual activity that is identified early without interrupting legitimate behavior.

These are increasingly enabled by systems that can evaluate transactions, behaviors, and risk signals continuously, rather than after the fact.

Expectations Continue To Reset

Member expectations are evolving in parallel with broader digital experiences.

Capabilities such as immediate approvals, digital-first issuance, and real-time visibility into spending are becoming more common and, in many cases, expected.

Digital wallet payments are projected to exceed $16 trillion globally by 2028, reflecting how quickly payment behaviors are moving toward mobile and digital channels.

At the same time, credit union card portfolios continue to expand, as members rely more heavily on their institutions for both everyday transactions and access to credit.

There is clear opportunity for growth, but also an increasing expectation that experiences will remain consistent, responsive, and secure as that growth occurs.

Translating Strategy Into Execution

In many cases, credit unions have a well-defined view of how they want to serve their members.

That may include digital-first debit programs, more flexible credit offerings, or solutions designed around specific community needs.

Legacy environments can make it difficult to move at the pace required, as product-centric systems introduce dependencies across vendors and processes, and even incremental changes can take considerable time to implement.

More modern issuing platforms are intended to reduce that distance between intent and delivery.

By allowing institutions to configure and manage programs more directly, they create the ability to test, refine, and launch capabilities with greater speed and control, while also reducing reliance on extended development cycles that can slow progress — an approach reflected in configurable program management.

For organizations operating with lean teams, this can reduce operational overhead while making it easier to sustain innovation over time.

At the same time, risk management becomes more continuous. Systems that evaluate activity as it occurs can identify anomalies while allowing normal member behavior to proceed without unnecessary friction.

The Role Of Infrastructure In Growth

The way growth is defined in financial services has shifted.

Historically, it was closely tied to physical scale — branch networks, geographic reach, and asset size.

Today, infrastructure plays a more central role.

Global payments revenue is expected to surpass $3 trillion by 2028, driven by continued expansion in digital transactions and increasingly complex payment ecosystems global payments revenue outlook.

In this environment, institutions need to be able to introduce new programs, adapt them over time, and manage risk dynamically as volumes increase.

Infrastructure is not separate from growth in this context. It is increasingly part of what enables it.

For credit unions, this does not change the underlying mission, but it does influence how that mission is delivered as member expectations continue to evolve.

Managing Complexity Over Time

As institutions grow, complexity tends to accumulate.

Multiple systems across products, regions, or partnerships can introduce fragmentation, making it more difficult to maintain consistency while increasing operational overhead.

A more unified platform approach can help address this over time.

Supporting multiple programs within a single environment simplifies integration, improves visibility, and allows for a more consistent approach to risk management.

It also reduces the degree of technical complexity that can build across disconnected systems, creating a more stable foundation for ongoing change.

Institutions investing in adaptable, next-gen infrastructure are better positioned to respond to new technologies, regulatory developments and shifting member expectations.

Emerging Shifts In Issuing

As issuing infrastructure continues to evolve, several shifts are becoming more apparent:

• Speed to market is becoming more closely tied to member engagement.
• Real-time decisioning is becoming embedded in transaction and risk management.
• Reducing operational friction is critical to executing on product strategy.
• Risk capabilities are becoming more integrated within the platform itself.
• Flexibility is allowing institutions to maintain control while adapting to change.

Issuing As Long-Term Infrastructure

Looking ahead, the role of issuing will continue to expand.

The platforms supporting card programs will play an increasingly important role in how effectively credit unions introduce new offerings, manage risk, and deliver responsive digital experiences.

This reflects a broader shift across financial services, where technology platforms are becoming part of the strategic foundation rather than remaining purely operational.

For credit unions, this evolution is aligned with a long-standing focus on member relationships.

The objective is not to pursue every emerging payment model, but to build infrastructure that can adapt over time — supporting innovation, enabling partnerships, and maintaining consistency as the environment changes.

Credit unions that approach issuing with this perspective in mind are more likely to remain aligned with both member expectations and the broader direction of the payments ecosystem.

Amir Wain is a recognized payment thought leader, serial entrepreneur, and CEO of i2c Inc. His entrepreneurial journey began when he founded Innovative Pvt. Limited in 1987. In 2000, he founded i2c to modernize financial technology. As CEO, Amir sets the strategic direction to realize his vision of a global, unified banking and payment platform that delivers unparalleled flexibility and agility while providing security and reliability. Outside of his work at i2c, Amir serves as chair of the board at numerous startups including xIQ, an AI-powered sales and marketing platform. He is also a limited partner to venture capital funds focused on B2B companies leveraging artificial intelligence and machine learning. Amir also serves as chair for the Wain Foundation, which is focused on improving health and wellbeing, the quality of education, and clean water and sanitation in the world

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Credit unions committed to serving members with limited or impaired credit operate at the intersection of access, trust, and protection. Fraud management plays a critical role in that mission, but many accept fraud losses that are neither inevitable nor sustainable.

Internal portfolio analysis reveals a striking disparity across the industry. While the average fraud loss rate hovers around 25%, some institutions operate with loss rates as low as 6% without restricting access, increasing false positives, or eroding member trust. The difference between these outcomes: strategy.

The Financial Impact Of The Gap

To understand what this gap means in practical terms, consider a mid-sized credit union with $7 million in annual dispute dollars.

• At a 25% fraud loss rate, approximately $1.75 million of that total reflects loss tied to process inefficiencies, delayed resolution, and misclassified disputes.
• At a 6% loss rate, that loss drops to roughly $420,000.

That’s a difference of $1.33 million every year. For institutions operating on thin margins, this gap can materially impact financial performance.

Why Credit Unions Feel This More Acutely

Research by Cornerstone Advisors provides context for why many credit unions struggle to close this gap. Credit unions earned an average fraud experience score of 75, placing them squarely in “C-grade” territory and trailing several large issuers.

Only 5% of credit union cardholders rated their fraud experience an A, while nearly a quarter graded it a D or F.

Notably, the biggest gaps appeared in:

• Provisional credit issuance.
• Investigation and documentation collection.

These steps are where friction accumulates through manual handoffs, inconsistent timelines, limited self-service, and poor visibility into case status. While more than half of cardholders believe their disputes are resolved within a week, Cornerstone’s research shows 1 in 5 experiences resolution times longer than two weeks, often due to operational bottlenecks rather than investigative complexity.

For credit unions serving subprime or financially stressed members, these delays carry outsized consequences. Access to funds matters more, patience is thinner, and trust is more fragile.

Fraud Experience Is A Relationship Decision

Cornerstone’s data underscores a critical reality: fraud resolution quality directly shapes member behavior. Among cardholders who rated their experience an A:

• 87% reported increased confidence in their institution.
• 39% increased card usage.
• 81% were more likely to add products.
• 83% said the relationship was strengthened.

By contrast, poor experiences drive disengagement, reduced card usage, and attrition.

Proof The Gap Is Real And Fixable

Rogue Credit Union’s experience illustrates what’s possible with the right operational strategy.

“We were seeing about $2.5 million in fraud losses a year,” says James Richie, vice president of payment services at Rogue Credit Union ($4.2B, Medford, OR). “Now, with Quavo, we’ve been able to cut that by close to 60–70%.”

Institutions closing the gap between 25% and 6% loss rates consistently focus on:

• Parallelized investigations instead of linear workflows.
• Clear, auditable provisional credit handling aligned with Reg E and Reg Z.
• Real-time visibility into case status for staff and members.
• Fewer handoffs and less rework across dispute teams.

Protecting The Mission By Eliminating Waste

Serving the underserved does not require absorbing losses as a cost of compassion. Every avoidable fraud dollar represents longer wait times for real victims, fewer resources for prevention, and less capacity to support members when it matters most.

Credit unions that modernize fraud operations are discovering that lower losses, stronger relationships, and better experiences are not competing priorities. They are the same outcome delivered through better strategy.

Explore the full Fraud Experience Differentiator from Cornerstone Advisors x Quavo.

Steve Durney is VP of Partnerships & Alliances at Quavo. Contact him at steve.durney@quavo.com.

Quavo is a technology partner and strategic advisor helping financial institutions resolve fraud and disputes faster and more transparently. Its award-winning platform automates the dispute lifecycle end to end, enabling institutions to reduce losses, ensure compliance, and strengthen customer trust at scale.

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When the NCUA released its fourth quarter 2025 performance data, the headlines practically wrote themselves.

Total assets in federally insured credit unions climbed $126 billion over the year, reaching $2.43 trillion. Total loans outstanding increased $76 billion to hit $1.72 trillion. By any measure, these are strong numbers; the kind that make for reassuring board presentations and confident annual reports.

But aggregate numbers like these have a way of flattering the industry’s biggest players while quietly obscuring the experience of everyone else. And for small to midsize credit unions, the experience of 2025 lies beneath the flashy headlines.

The Real Story

The NCUA’s own data tells a more complicated story when you shift from aggregate totals to median performance, which is a more accurate reflection of the typical credit union, not the large institutions that pull averages upward.

At the median, loans outstanding declined 0.2% over the year ending in the second quarter of 2025. The year prior, this same figure had grown 2.4%. To me, this reads more like a meaningful reversal and less like a subtle shift. Additionally, loan balances declined at the median in 25 states and the District of Columbia during that period. By the third quarter, the median had barely recovered, registering just 0.3% growth, with loans still declining in 19 states.

Auto loans — a foundational product for credit unions of every size — told an even bleaker story. Systemwide, auto loan balances fell $10.4 billion in the first quarter of 2025, another $6.5 billion in the second quarter, and $3.4 billion more in the third. The loan-to-share ratio, a reliable barometer of lending momentum, slid from 84.0% to 83.2% over the course of the year, a signal that deposits were either growing faster than loan demand or that loan demand was being suppressed.

For a smaller credit union serving a regional community, numbers like these show up in month-end reports, in budget conversations, and in the anxiety of knowing your loan portfolio isn’t growing the way it needs to.

The Headwinds Are Getting Stronger

The lending slowdown of 2025 didn’t happen in a vacuum, and unfortunately, it appears the forces behind it are intensifying.

Elevated interest rates throughout much of 2025 kept borrowing costs high and dampened consumer appetite for new debt. This was particularly true in auto loans, where monthly payments climbed to levels that stretched household budgets.

The resumption of student loan repayments redirected some income that may have otherwise supported borrowing. On top of that, rising delinquency rates signaled that many members were already managing more debt than was comfortable.

And now, in early 2026, a new layer of pressure has arrived. Fuel prices have spiked sharply, up nearly 80 cents per gallon in recent weeks amid geopolitical disruption in the Middle East. For the small business owner running a delivery route, the contractor fueling a work truck, and the farmer getting product to market, the math got a lot harder almost overnight.

These are, in many cases, credit union members. And they’re going to need somewhere to turn.

The economic headwinds hitting communities right now aren’t theoretical. They’re showing up at gas stations, in business checking accounts, and at kitchen tables.

3 Ways To Go On Offense

But here’s the thing: The institutions that will come out of this period with stronger loan portfolios and deeper member loyalty are the ones choosing right now to be proactive, visible, and useful. Here’s where to start:

1. Eliminate Friction Between Your Member And A “Yes”

When a member needs money to cover a bill, buy groceries, or handle an unexpected expense, the credit union that makes it easiest to get there wins. It’s that simple.

That means taking a hard look at your current lending process and asking a question with a potentially eye-opening answer: how many steps stand between a member and funded loan?

If the answer involves a branch visit, a lengthy paper application, or a multi-day wait for a decision on a loan they almost certainly qualify for, then you’re creating an opening for a competitor to walk right through.

The most effective credit unions right now are delivering pre-approved loan offers directly through online and mobile banking. These are offers members can accept in a single step, with e-signature handling the closing instantly. No friction. No waiting. No reason to look elsewhere. Don’t think of this as merely an opportunity to upgrade member experience. We’re talking about bolstering your entire loan growth strategy.

2. Use What Your Core Already Knows

Your data is one of your most underutilized assets. Every transaction, every payment history, every account relationship your members have with your credit union is a signal. And when you read those signals intelligently, you stop guessing and start strategizing.

The credit unions gaining ground on loan growth right now aren’t blasting generic offers to their entire membership. They identify the right members (i.e., the ones most likely to need and qualify for a specific product) and reach them with an offer or solution that feels relevant instead of random.

They’re also leaning on relationship history as part of the lending decision itself. A member with years of timely payments, steady deposits, and deep roots in your credit union tells a story that a credit score alone can’t fully capture. Use that story. In fact, your core should make that kind of insight easy to access and act on. If it isn’t, then it may be time to have a conversation.

A potential member who doesn’t know you offer small business loans or doesn’t realize your rates beat the bank down the street has no reason to walk through your door when they need help.

3. Be Loud And Proud In Your Community

Unfortunately, credit unions have to constantly fight an awareness battle that banks simply don’t have to. A potential member who doesn’t know you offer small business loans or doesn’t realize your rates beat the bank down the street has no reason to walk through your door when they need help.

But have no fear, this is an entirely fixable situation.

Right now, with small businesses facing rising fuel costs and tightening margins, there is a genuine, urgent opportunity for credit unions to raise their hands and be heard. Feature your small business loan products. Talk openly about lower rates, fewer fees, and the kind of personalized service a regional bank or national lender structurally cannot provide.

Run a local TV spot featuring a member success story that you helped create. I’m talking about the restaurant that stayed open during an economic downturn, the contractor who bought a second truck, or the mom-and-pop retailer fighting back against a regional competitor. Put your rates on social media. Be specific. Be local. Be loud.

The community you serve is looking for a partner right now, not a transaction. Credit unions are built to be that partner. But they have to show up for people to know it.

The credit union model was designed for exactly this kind of moment, and CU*SOUTH is built to help your credit union make the most of it. We power credit unions across America with a browser-based, all-in-one core loaded with data and analytics, relationship-driven capabilities, and streamlined lending tools — including 1-Click Loans, which puts pre-approved offers directly in members’ hands through online and mobile banking.

Danny Phillips is senior vice president of client experience at CU*SOUTH. He has more than 20 years of credit union experience and expertise in lending, risk analysis, underwriting, and team development. With a track record of creating new loan products, building departments from the ground up, and optimizing operations across lending, compliance, and marketing, Danny is dedicated to driving growth and enhancing client experience at CU*SOUTH.

As a 100% credit union-owned CUSO, CU*SOUTH provides the full operational engine for credit unions nationwide. The organization delivers a modern, browser-based core platform seamlessly integrated with back-office essential services — accounting and CFO services, IT and collections — managed by experienced credit union veterans.

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