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As the Federal Reserve continues to adjust its benchmark rates, credit unions across the country are watching closely. Lower interest rates are supposed to make borrowing more attractive and saving less so, but does this theory hold up in the real world?

The Federal Reserve typically lowers rates in response to economic weakness, and that uncertainty can make it hard to predict how households will react. Sometimes, lower rates are enough to jump-start lending and spending. Other times, they merely help steady the ship, preventing a slide into recession.

For credit unions, the key is balancing opportunity and risk. So, what might the future hold if interest rates continue to fall?

Loan Originations Will Continue To Rebound

In the third quarter of 2025, loan originations increased 17.7% year-over-year, a striking rebound and the highest level of originations through the third quarter since 2022. If more interest rate cuts are on the horizon, it stands to reason that demand for both new mortgages and refinances will increase.

YEAR-TO-DATE LOAN ORIGINATIONS
FOR U.S. CREDIT UNIONS
SOURCE: Callahan & Associates

Member Appetite For Share Certificates Will Decrease

With a lower dividend rate, fewer members will want to park their savings in share certificates. Instead, they’ll gravitate toward more liquid options like regular shares or money market accounts. Members might also withdraw large portions of savings to chase the potentially inflation-beating yields of stocks or crypto.

The Net Interest Margin Will Move Closer To The Operating Expense Ratio

If low rates push members to refinance existing loans and take out new ones (in essence, repricing the loan portfolio) and liquidity pressure keeps the cost of funds from falling, then the spread between interest income and interest expense will shrink, compressing margins and creating headwinds on earnings.

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As consumer expectations shift toward digital convenience, personalization, and security, credit unions have a clear opportunity to lead the charge. Virtual cards represent not only a new product offering but also a gateway to deeper engagement, stronger fraud protection, and enhanced digital loyalty.

Here’s why your credit union should be paying attention now.

• Adoption is particularly strong among Gen Z and millennials — two generations that are digitally fluent, mobile-first, and increasingly shaping the financial services landscape. In the past six months, 62% of Gen Z and 57% of millennials reported using a virtual card.
• Security remains a leading motivator. More than 60% of cardholders have experienced credit card fraud at least once. Virtual cards offer an increase in control and fraud protection for consumers. Among those who have experienced fraud, 36% are now more likely to use a virtual card, and half already have.
• While 74% of consumers say they would prefer to use virtual cards in at least one scenario, not all fully understand how they work or how they differ from mobile wallets. By investing in clear, scenario-based education, credit unions can bridge the adoption gap. Tutorials, tools, tips, and simple onboarding can help mainstream users feel more confident, while highlighting rewards, fraud protection, and convenience keeps messaging aligned with familiar physical card habits.

The data in this report is clear: virtual cards are not a passing phase. They are the next evolution in consumer payments — and credit unions that wait risk falling behind. Whether through integration with digital wallets, enhanced fraud protection, or real-time issuance, virtual cards offer a compelling value proposition across generations and tech segments.

Credit unions that act now can capture early-mover advantage, deepen member relationships, and reinforce their commitment to digital innovation. The time to modernize your payment offering isn’t next year — it’s now.

Download the full report to access all the insights.

The post Virtual Cards: More Than Just A Trend appeared first on CreditUnions.com.

There’s a stark divide in digital wallet adoption, with Gen Z embracing those tools more than any other age bracket – and at more than three times the rate of baby boomers. Put another way, those born before 1980 use digital wallets at a rate almost 20 percentage points below those born in 1980 or later.

Digital wallets can be defined as apps designed to allow spenders to use their cards to transact entirely on their phone. Some of the most popular – including Apple Pay, Venmo, or Google Wallet – are becoming increasingly common consumer-facing financial technology.

Strategic Insights

• While digital wallet usage vary by generation, there’s more uniformity when it comes to income. According to a recent study by PYMNTS Intelligence, just over half (54.7%) of Americans making over $100,000 use a digital wallet. By comparison, 51.4% of those making $50,000 to $100,000 use these tools, and 41.2% of those who make less than $50,000. In the entire sample, 49.4% of Americans use a digital wallet, while 51% of U.S. consumers said they are somewhat or very interested in using a digital wallet.
• For credit unions, the speed of adoption is certainly something to take note of, especially as the industry works to expand its reach. Younger Americans tend to prefer more digital options, and a recent study from Velera showed the number of credit union members using digital wallets at least a few times per month has nearly doubled, rising from 27% in 2022 to 50% in 2024.
• Successfully navigating fintech adoption can give credit unions an edge. Through partnerships, credit unions can go head first in expanding member-facing technologies without having the expertise in-house to do so.

The post Digital Wallet Usage Skews Younger, But Becoming More Ubiquitous appeared first on CreditUnions.com.

With just 45% of Americans feeling prepared for retirement, credit unions are stepping up — offering seniors personalized guidance, financial tools, and a sense of trust that’s hard to find elsewhere. And as the needs of aging members evolve, so too does the industry’s commitment to serving them well.

A Personalized, Proactive Approach

“Whether you’re about to retire, approaching retirement, or just exploring your options, trying to figure it out can be overwhelming,” says Kent Lugrand, CEO of InTouch Credit Union ($834.4, Plano, TX).

According to the CEO, members must take an active role in planning their financial future. That’s why in 2022 InTouch expanded services for those nearing or in retirement.

“Being a trusted source that members can rely on — knowing we’re vetted, accurate, and will educate them along the way — has proven to be extremely beneficial,” Lugrand says.

Some of the biggest misconceptions his team encounters are that there’s only one way to claim Social Security or that Medicare covers everything.

“Another common misunderstanding is that financial planning for retirement ends the day you stop working,” he says. “In reality, it continues long after.”

At InTouch, education is key. The credit union uses a variety of channels — such as seminars, one-on-one counseling, and digital resources — to deliver information in a way that works for all members. Of course, in addition to accessibility, messaging is also key.

“We focus on simplifying complex topics and providing clear, actionable guidance,” Lugrand says.

In Northern California, Golden 1 Credit Union ($19.6B, Sacramento, CA) was named No. 1 on Money.com’s “Best Banks and Credit Unions for Seniors for 2025” list. The credit union describes its approach to senior members as personal, proactive, and comprehensive.

“Our senior members often have unique financial needs and challenges shaped by their life stage and goals,” says CEO Donna Bland. “I’d say retirement and healthcare costs are predominantly the most important concerns they have.”

Golden 1’s investment services focus on everything from retirement and estate planning to transfer of wealth and tax strategies. The credit union also regularly hosts workshops about managing debt, recognizing scams, and using mobile and online banking.

“We address these topics with practical tools, education, and personalized support,” Bland says. “We also understand that many seniors manage finances with help from family or caregivers. We offer resources that support these multigenerational needs, too.”

Partnerships For Better Products

Golden 1 snagged its Money.com ranking largely thanks to its Golden Prestige package, which is available to members aged 62 and older. The package includes free checks annually, no monthly maintenance fees, up to 10 free cashier’s checks per month, access to notary services, and 30,000 surcharge-free ATMs in the CO-OP Network.

“It helps members avoid unnecessary fees while our financial advisors and education teams provide custom budgeting, debt reduction, and income-maximization strategies,” Bland explains. “We also connect members to trusted nonprofit and government resources designed to help members plan around inflation, healthcare costs, and retirement income to improve peace of mind.”

Strategic partnerships also help the credit union provide better products and services, too. For example, Golden 1’s partnership with eHealth allows members to take advantage of specialized guidance to find a plan that fits their needs.

“It can be a daunting process, so we work to assist members in selecting options that align with their financial and healthcare goals,” Bland says.

Both Golden 1 and ITCU use a retirement planning app that offers free AI-powered tools. Silvur’s Retirement Simplified app includes calculators, Social Security and Medicare guidance, and more than 500 on-demand educational lessons.

“We were looking for a digital solution that was user-friendly and provided clear, educational insights into retirement finances,” says Lugrand at InTouch.

According to the CEO, InTouch helps 99% of its members transition into retirement thanks to personalized planning resources.

“We want our members to make informed decisions while still having the ability to connect with a trusted advisor when needed,” he says.

At ITCU, more than 2,700 members have created profiles with 62% starting the process to obtain a retirement score and 48% completing it.

“Notably, 77% of those who started the process followed through to completion,” Lugrand says. “Our approach is resonating with the right audience and helping members take an active role in their retirement planning.”

Retirement Reimagined

Recent surveys of individuals as well as businesses show weaker sentiment across the board. In times of economic doubt and shifting financial priorities, the value of trust and personal connection can’t be overstated. That’s where credit unions have carved out a distinct role — not only as financial institutions but as lifelong partners in their members’ financial journeys. For seniors especially, that difference can be life-changing.

“Unlike traditional banks, we prioritize education and long-term financial wellness rather than just transactions,” Lugrand says. “Our members trust us to look out for their best interests, and that makes a big difference.”

Despite the credit union receiving notable praise for its services for seniors, Bland says the most rewarding outcomes for Golden 1 are in member experiences, like when a member struggling with high-interest debt attended a cybersecurity workshop and started working with the credit union’s financial coaches. After a full financial review, she improved her credit, qualified for a personal loan to consolidate debt, and adjusted her budget. She now saves $400 every month and enjoys greater financial stability in her retirement.

“Stories like this reflect the lasting impact of personalized support and financial education,” Bland says.

Members Need Help. Do You Have The Solution? Discover strategies that truly resonate with members facing complex financial decisions. Callahan Webinars brings you practical approaches for offering personalized guidance. Our on-demand library showcases ways to offer assistance when members need it most. Your members are waiting — click here for access.

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The 2025 Innovation Series from CreditUnions.com and Callahan & Associates is underway. Every year since 2018, this series has offered a select group of suppliers 10 minutes each to impress an audience of credit union decision-makers. It’s simple: Each vendor pitches its offerings and attendees vote on their favorites.

The Innovation Series was a hit from the get-go and continues to grow in popularity. This year’s focus areas include financial wellness, member experience, lending, digital, analytics, and member engagement.

Read on for more from this year’s lending finalists Exagens — MoneySparxs, Prizeout, Pulsate, and Spiral. Plus, make sure to join us for the Innovations In Member Engagement webinar. Register today!

Exagens – MoneySparxs

Describe your innovation.

Behavioral Banking enables emotionally significant relationships to be created and nurtured, cost-effectively, individually, and at scale, with the growing pool of members who now rarely interact with your credit union in-person. It makes possible the benefits of customer engagement, loyalty, and financial wellness in an era when most interactions and transactions occur through digital channels. MoneySparxs, exagens’ latest Behavioral Banking solution, fuses behavioral economics, neuroscience, advanced data analytics, psychology, and AI to understand the financial decisions of individuals, and then effectively engage and influence them to make smarter financial decisions. It adds incredible new value to your existing data and enriches it further. Behavioral Banking is needed because people are constantly being swayed by cognitive biases, emotions and social factors, and therefore rarely make rational decisions when it comes to their finances. Behavioral Banking solutions enable credit unions to grow with their members by catalyzing them to save, spend, invest, and borrow wiser both through their digital channels as well as in-branch.

What opportunity or challenge does it address?

• The Challenge: The ease and convenience of digital banking has yielded an explosion in the frequency of banking interactions and significant cost savings for financial institutions. It has also fractured financial relationships and their benefits. People who primarily bank through digital channels report being significantly less engaged with their Financial Institution, resulting in lower share of wallet, reduced loyalty, decreased customer satisfaction, and an adverse impact on financial health.
• The Opportunity: This disconnect provides credit unions with a unique opportunity to differentiate and grow by leveraging their historical strengths to differentiate their member experience and compete with big banks who otherwise far outspend them on technology. Exagens MoneySparxs enables credit unions to elevate their digital and in-branch experiences and move beyond providers of mostly commodity products and services to trusted and valued financial partners in the lives of their members.
• The results: Credit unions utilizing Behavioral Banking have benefited from increased deposits, expanded wallet share, higher card utilization, membership growth, and great loyalty, all while helping improve the financial lives of their members.

How does it increase member value?

MoneySparxs enables credit unions to grow financially with their members by delivering Behavioral Baking at scale through their digital channels. It delivers emotionally and financially engaging Sparks* (personal and community money-related tips, wisdom, suggestions, and fun insights) which catalyzes individuals to save, spend, invest, and borrow wisely.

What differentiates this innovation from competitors?

Based in behavioral science and leveraging AI, MoneySparxs goes well beyond traditional methods of segmenting, personas, and journey mapping by treating and interacting with each individual member in terms of their unique financial situation. With a deep understanding of human behavior and financial decision making (why decisions are and are not made), MoneySparxs is able to catalyze members in ways beneficial to them and their credit unions. Exagens designed MoneySparxs from the ground up with the sensibilities and realities of credit unions in mind. It is cost-effective, requires no PII, produces results quickly, and does not require any additional credit union resources to operate – exagens does most of the work, credit unions and their members get all of the benefit.

Prizeout

Describe your innovation.

CashBack+ is the first platform to centralize all cashback rewards into a single balance within credit unions’ online and mobile banking platforms. Unlike traditional rewards programs that redirect members offsite or rely on confusing points systems, CashBack+ provides a seamless, co-branded experience that keeps credit unions top of wallet. There are three different ways to earn cashback, each designed to maximize member engagement, loyalty, and non-interest income. Built by credit unions for credit unions, CashBack+ enables institutions of all sizes to compete effectively against larger banks.

What opportunity or challenge does it address?

Credit unions face increasing competition from large financial institutions, as they don’t have the same access to digital tools and talent. Traditional rewards programs often fail due to complexity, poor user experience, and limited accessibility to debit cardholders.

CashBack+ solves these issues by offering an embedded rewards platform directly available to members from their account page within online banking, making rewards easy to explore, access and use. This innovative program helps credit unions retain members, grow engagement, and boost revenue without requiring significant infrastructure changes.

How does it increase member value?

For members, CashBack+ simplifies earning and redeeming rewards. Instead of tracking points or navigating multiple platforms, all cashback earned flows into a single, growing balance within their accounts. Members can earn cashback when they shop with their credit union account, complete incentived actions and pay at checkout with their credit union account. At Michigan State University Federal Credit Union ($8.2B, East Lansing, MI), CashBack+ users are projected to earn between $91 and $190 annually, with rewards averaging 8-10% per purchase — far exceeding typical credit card cashback rates.

What differentiates this innovation from competitors?

Unlike most cashback platforms, CashBack+ is fully integrated within credit unions’ digital banking environments, eliminating friction and keeping members engaged. It supports both debit and credit transactions, ensuring broader accessibility. Additionally, CashBack+ provides a revenue stream for credit unions, outpacing debit interchange fees. The platform has already been adopted by leading credit unions, including Golden 1 Credit Union ($19.6B, Sacramento, CA), Suncoast Credit Union ($18.4B, Tampa, FL), and MSUFCU, with proven results in increasing digital engagement, transaction volume, and member satisfaction. By combining ease of use, high-value rewards, and seamless integration, CashBack+ stands out as the most effective cashback solution tailored specifically for credit unions.

Pulsate

Describe your innovation.

Pulsate’s Opportunities Engine transforms digital banking into an active engagement channel, helping financial institutions build lasting, profitable relationships in a mobile-first world. By leveraging real-time behavioral data, the platform delivers personalized, contextual offers directly within an FI’s banking app — where members are already managing their finances.

Key capabilities include:

• Next-best engagement: AI-driven campaign recommendations with pre-built creative and audience targeting.
• Engagement summary: Actionable insights into user trends and campaign impact.
• Opportunities file: Lists of high-intent users for outreach via digital campaigns or outbound calls.
• Seamless data integrations: Connects with core banking systems, CRMs, and fintech solutions.

With Pulsate, FIs can cut through digital noise to deliver timely, relevant offers — from debit card incentives to loan preapprovals — strengthening relationships and increasing engagement, deposits, and lending.

What opportunity or challenge does it address?

With 90% of consumers preferring to bank from their phones, community FIs are at risk of losing 90% of growth opportunities to big banks that dominate digital mindshare. Without in-branch interactions, members miss out on tailored product recommendations, and traditional outreach methods like email often go ignored.

Pulsate bridges this gap by enabling FIs to proactively engage members inside the banking app — where trust is highest — with hyper-personalized, data-driven micro-engagements that keep them top of mind and therefore top of wallet.

How does it increase member value?

Pulsate enhances the digital banking experience by delivering:

• Timely, relevant engagement: Members receive the right offers at the right time, creating a more intuitive and seamless experience.
• Stronger financial well-being: Personalized recommendations help members make smarter financial decisions.
• Convenience and trust: Unlike email or SMS, in-app messaging ensures secure, non-intrusive engagement within a channel members already use.
• Better financial outcomes: By responding to members’ real-time behaviors, FIs increase adoption of high-value products like loans, deposits, and credit cards.

What differentiates this innovation from competitors?

Pulsate delivers engagement where it matters most — inside the digital banking app. Unlike generic email campaigns or generic notifications, Pulsate’s real-time, behavior-based messaging ensures higher visibility, more relevance, and greater response rates.

By leveraging an FI’s own data, Pulsate anticipates member needs, making interactions feel intuitive, not intrusive. No other platform offers the same depth of personalization, multi-channel reach, and seamless banking integration, positioning Pulsate as the premier engagement solution for community FIs.

Spiral

Describe your innovation.

Members have a lot of options. On average, every household has five accounts across various financial institutions. Members constantly evaluate who provides the greatest value, trust, and personal service in today’s competitive market.

Spiral is the award-winning platform that enables credit unions to grow deposits, increase engagement, and build deep member relationships — making them the primary institution for savings, loans, cards, and more. By turning member engagement into an emotional connection, credit unions can become the go-to choice for your members’ financial needs.

What opportunity or challenge does it address?

With 73% of community financial institutions concerned about losing deposits to bigger banks and fintechs, standing out has never been more critical. As interest rates decline and 80% of recent homebuyers consider refinancing, growing deposits and deepening member engagement is key to meeting loan demand.

Spiral empowers credit unions to win and retain members, grow deposits and loans, and empower millions of people to build better lives and support their communities.

How Spiral helps credit unions:

• Boost member engagement to deepen relationships.
• Increase card transactions and fee income.
• Grow deposits from members.
• Become the primary financial institution (primacy).
• Expand savings account penetration and wallet share.
• Drive charitable donations and strengthen nonprofit partnerships to attract deposits.

How does it increase member value?

With Spiral, members can:

• Swipe. Save. Impact: Save money and achieve community impact easily with everyday purchases.
• Easily save for life’s dreams: Get personalized insights, build easy savings habits, and save automatically without thinking about it.
• Be community heroes: Help other people and achieve community impact easily with each transaction. Donate to favorite charities and manage all charitable giving from their digital banking.

What differentiates this innovation from competitors?

Spiral stands out by combining seamless user experience, financial wellness, and community impact into turnkey, fully personalized experiences within digital banking that drive proven business impact for credit unions.

Key Differentiators:

• All-in-one engagement platform that engages members through their entire banking journey (savings, loans, giving).
• Savings combined with community impact: The only solution that seamlessly integrates savings with giving, empowering members to support causes they care about.
• Superior user experience and easy enrollment with gamified member experiences: Interactive digital widgets and pop-ups that keep members actively engaged while growing deposits and card usage.
• Customizable and turnkey: Credit unions can personalize impact and savings areas, ensuring alignment with their mission—all seamlessly embedded within their existing online banking.

Proven results:

• Spiral’s clients achieved 500,000+ savings transactions in seven months.
• Spiral’s clients achieved on average 15% higher monthly deposits, 30% more monthly card transactions, and 15% higher digital engagement.
• Hundreds of thousands of dollars saved and donated via Spiral’s digital banking experiences.

The post Meet The Finalists For The 2025 Innovation Series: Member Engagement appeared first on CreditUnions.com.

Top-Level Takeaways

• Transcend Credit Union lowered its average member age from the 50s to 47 in fewer than two years.
• Its teen checking accounts average $864, and 530 accountholders make nearly 3,000 transactions per month.

Transcend Credit Union ($526.9, Louisville, KY) is tackling a pivotal challenge many credit unions face: how to attract younger members.

Fewer than two years ago, the cooperative’s average member age was in the 50s and trending upward. As these members typically need fewer services, it falls to younger cohorts to ensure future growth and viability.

“Most of our older members already have credit cards, can pay cash for autos, and are downsizing rather than upgrading their homes,” says Darran Stopher, chief retail officer at the Kentucky cooperative. “To maintain loan growth, we needed to bring in younger members.”

At the time, Transcend was fielding growing requests from parents interested in accounts for their teens, a demographic Stopher says is underserved by most financial institutions in the Louisville and Lexington areas his credit union serves.

So, in March 2023, the credit union launched an account designed to not only attract 13- to 17-year-olds but also engage their parents. Since then, Transcend has opened more than 530 teen accounts, helping to lower the 47,818-member credit union’s average member age to approximately 47.

Most of those are new members, an added benefit that accompanies strengthening relationships with families and building long-term loyalty among young accountholders. Such success, according to Stopher, is the product of strategic planning and close collaboration with teens as well as parents to design an account that works for the young folks, their parents, and the credit union itself.

Catering To Teens And Parents

One key factor in the success of Transcend’s teen membership initiative was uncovering what teens and their parents actually want from a checking account. Focus groups with both generations helped the credit union identify must-have features.

“The teens wanted access to the account from their phones and the ability to use a debit card,” Stopher says. “Parents wanted the ability to monitor their teen’s account.”

So, Transcend built an account that offers a mobile banking app, ATM fee reimbursements, and a debit card for teens. For parents, the account gives them to ability to monitor the account, transfer funds, and set daily spending limits.

Another key feature in the teen account is overdraft avoidance. If an accountholder doesn’t have sufficient funds for a purchase, the transaction is simply declined.

According to Stopher, this balance between teen independence and parental oversight has been crucial in driving engagement. In fact, parents — who have been satisfied with the control they retain over the account — have also been “huge advocates” for the credit union.

“When they feel secure about their teens’ financial experience, they are much more likely to bring their teens into the branch to get involved,” Stopher says.

The combination of features that appeal to both generations has made this teen account one of the cornerstones of Transcend’s youth membership strategy. But there are others.

Financial Education And In-Branch Engagement

Transcend Credit Union didn’t just launch a teen account and leave it at that — it built a comprehensive educational experience along with it.

“Although parents can open the accounts online, we always recommend bringing their teens in when opening the account,” Stopher says.

There, Transcend staffers review budgeting and ensure the young member understands what it means to have sufficient funds to cover transactions. They also cover how to use an ATM, how to safely use digital payment methods, such as ApplePay and Venmo, and, if they have a job, the importance of direct deposit.

“We also cover topics such as proper use of the debit card and how to safely maintain it, such as where to keep it and not sharing it with their friends,” Stopher says. “We also take the time to log them on to mobile banking and navigate the site.”

The important thing, Stopher stresses, is that Transcend uses every interaction with young members as a teachable moment.

“We believe every moment with the teen can be a teachable moment,” the veteran CRO says.

Those teachable moments don’t stop at the branch. Transcend works with local high schools to provide workshops on personal finance, mock job interviews, and itself hires students for summer jobs.

According to Stopher, this deep community engagement reinforces the credit union’s commitment to financial literacy and fosters goodwill among educators and students alike. Importantly, it has positioned Transcend as not just a financial institution but a trusted partner in the community that helps teens gain essential financial skills that will serve them throughout their lives.

Account Performance And Long-Term Growth

As of August 2024, 530 teen accountholders held a total balance of $460,557, averaging approximately $864 per account. Additionally, the accounts generate nearly 3,000 debit card transactions every month.

Although these accounts might not significantly impact the credit union’s overall liquidity, the steady inflow does add value.

“Anytime we can get cheap deposits, that’s a win for us,” Stopher says.

Promotional campaigns also have played an essential role in maintaining growth. Transcend’s August 2024 back-to-school campaign, where it offered to match deposits up to $200 for new teen accounts, was particularly successful.

“We were able to double the number of checking accounts opened compared to what we had been averaging each month,” Stopher says.

According to Stopher, accountholders often used the deposit match for back-to-school supplies, making the promotion even more practical and appealing.

There For The Financial Journey

To juice engagement, Transcend has also run campaigns encouraging teens and parents to refer their friends in exchange for gift cards to popular coffee shops, gaming stores, and the like.

These promotions, coupled with ongoing community outreach and strong social media engagement, help keep the credit union’s teen account top of mind. Instagram has proven particularly effective in reaching teens with promotions and financial education articles, whereas Facebook has worked well for engaging parents.

Looking ahead, Transcend is a planning how to maintain and grow these relationships as teen members move into adulthood.

By offering first-time credit cards, car loans, and other products tailored to young adults, the credit union hopes to be the first choice for these members when they reach new financial milestones.

“We want to be there when they purchase their first car or home,” Stopher says.

What Can You Learn From Like-Minded Leaders? Credit unions are responding to the evolving needs of members with a variety of products and services. Callahan Roundtables put leaders in the same room to share solutions, solicit feedback, pose questions, and more. Inspiration is a Roundtable away. Learn more today.

The post Transcend’s Teen Account Banks On The Future appeared first on CreditUnions.com.

Empowering Members With Instant Access

Digital issuance offers credit unions a competitive edge by ensuring seamless transactions and uninterrupted payments through cutting-edge push provision technology. Even when a card is lost or stolen and a replacement is needed, members can continue transacting without missing a beat.

With digital issuance, there is no need to manually add cards to digital wallets or worry about missing recurring payments. Members can immediately access their digital card credentials, making online shopping effortless without having to wait several days for a card to arrive. This is particularly valuable for members on the go who don’t typically use their physical card anyway.

Reclaiming Interchange Revenue

The advantages of digital issuance extend well beyond the member experience. Credit unions have an opportunity to recover substantial interchange revenue they could otherwise lose due to the time it takes to print, process, and mail physical cards.

For example, take an average daily credit card purchase amount of $19.31, which contributes to a daily interchange revenue of 34 cents. If, in a hypothetical scenario, 10,000 cards take five days to arrive, the credit union could miss an opportunity to make $17,000 in potential interchange revenue. For debit cards, let’s say the average daily purchase total is $35.05, with an average daily interchange revenue of 33 cents. In a hypothetical situation where 50,000 debit cards take five days to arrive, the credit union could miss an opportunity of making more than $82,000 in potential interchange revenue.

These figures reveal the significant opportunity costs that can accumulate when a credit union’s standard practice is slower, non-digital issuance.

Unlocking Instant With APIs

To address these challenges and harness the full power of digital issuance, credit unions can leverage application programming interfaces (APIs). Through APIs, credit unions can streamline their card issuance processes, including the following:

• • Push Provisioning: Effortlessly provides members with new card credentials, ensuring immediate access to their digital cards.
  • Card Credentials Access: Grants members access to their card credentials within their credit union’s mobile app, simplifying the process.
  • Card Add Automation: Automates the addition of new cards, eliminating the need for manual input and reducing the likelihood of errors.
  • Card Replace Automation: In the case of lost, stolen, or compromised cards, facilitates automated replacements, which lets members continue to transact without disruption.
  • Card on File Updates: Ensures members’ payment methods remain current with real-time card on file updates as needed or required.

By implementing digital issuance through APIs, credit unions have the opportunity to earn interchange revenue while enhancing the member experience. This proactive approach is crucial for meeting the evolving expectations of members in an increasingly digital world, and it is gaining momentum among financial institutions. According to PSCU’s 2023 Eye on Payments study, more credit union members received a digital card to use while waiting for a physical card in 2023 (30%) compared to 2022 (23%). Among those who received a digital card, 86% used it while waiting for their physical card to arrive.

If credit unions are not sure how to best go about offering a digital card issuance experience, consider partnering with a fintech CUSO like PSCU that provides access to the tools and resources needed. Credit unions can position themselves as the top choice for their members’ digital wallets by offering a card issuance experience that meets the demand for convenience and speed. The time to implement digital card issuance is now.

Cody Banks leads PSCU’s payments, fraud, loyalty, and contact center product teams. In his role, Cody focuses on developing and delivering safe, easy, and convenient payments experiences for the company’s owner credit unions. Prior to joining PSCU in 2017, Cody spent nearly 10 years in the credit union industry navigating complex initiatives with a focus on journey mapping the member experience.

The post Digital Issuance: Enhancing Experiences And Recovering Revenue appeared first on CreditUnions.com.

Top-Level Takeaways

• Credit Union West and Texas Trust are attracting new deposits via checking and certificate accounts with higher rates and promotional offers.
• Both Sunbelt credit unions need the liquidity cushion to meet high loan demand and actively monitor interest rate risk as part of their liquidity strategy.

Credit unions need money to lend money. Unfortunately, personal savings rates and share growth are both at historic lows, and liquidity is squeezing cooperatives across the country.

Texas Trust Credit Union ($2.1B, Arlington, TX) and Credit Union West ($1.1B, Glendale, AZ) are attracting deposits through creative product development, agile marketing responsive to market conditions, and interest rate management that adheres to the risk and liquidity parameters recommended by senior managers and ALCO committees.

Checking Accounts Power Deposits

Texas Trust is relying on checking to fuel its lending engine, which is chugging along at a dramatically stronger pace than the national average. Texas Trust’s first quarter lending was up nearly 20% year-over-year, compared with a decline of nearly 30% in the same period for all U.S. credit unions.

Its strategic shift to promote checking is in response to fast-moving interest rates, says Peggy Esparza, chief financial officer at Texas Trust.

“More than a year ago, we were pushing CDs to offer members a savings tool with a return,” Esparza says. “Now, we’re heavily focused on growing our Power Checking and Bonus Checking accounts.”

According to Esparza — who joined Texas Trust 28 years ago as a part-time teller and has been CFO since November 2021 — the checking accounts offer member benefits as well as better interest rates without locking the credit union into a set term.

“This gives us the flexibility to adjust the rate of the checking account based on market changes, which we can’t do with a CD until it matures,” Esparza says.

Power Checking is one of four checking accounts available at Texas Trust. The account currently offers a rate of 4.18% — a full 5 basis points higher than the credit union’s one-year CD — with a required monthly balance of $5,000 to $250,000 and 20 non-ATM debit or credit card transactions per month.

The credit union is currently promoting Power Checking, in part, to lure money away from locked-down CD accounts. The strategy seems to be working.

“We grew deposits of our Power Checking accounts by nearly $26 million, or 20%, after we increased the balance cap to $250,000 last year,” Esparza says. “The average monthly balance of these accounts is $50,000, which is slightly higher than what we saw in average balances the previous year. They’re also our highest retention checking accounts.”

Esparza says her cooperative currently has 3,054 Power Checking accounts with total balances of $153 million. The credit union had 65,960 total checking accounts with a total balance of $497.7 million at the end of April.

Swipes And Certificates In Phoenix

Meanwhile, in Arizona, Credit Union West is encouraging members to use their debit or credit cards to “Swipe to Win” or participate in a new certificate promotion.

In Swipe to Win, any member who completes 10 or more transactions with their Credit Union West debit or credit card earns a chance to win $10,000. The more they use their cards, the better their chances of winning, says Connie Loveland, Credit Union West’s chief financial officer.

For members who prefer share certificates, Credit Union West is offering up to 4.75% for a 25-month certificate. To take advantage of the promotion, members must bring at least $10,000 of new money. They can transfer funds above $10,000 from existing accounts, but the balance of the certificate cannot exceed $250,000.

The certificates promotion has attracted more than 200 new memberships with combined balances exceeding $60 million, Loveland says. Swipe to Win wrapped on May 31, and those results are not yet available.

“This is the largest giveaway amount to date and indicates how committed we are to providing value to members,” says Loveland, who joined the credit union in December 2020 with more than 20 years of financial services executive experience. “Both promotions were designed to help drive membership growth, additional deposits, and retain existing deposits.”

Models For Interest Rate Risk

A year ago, Esparza says, the Power Checking account paid a 1% APY with a balance cap of $100,000. Now it’s north of 4% and the balance cap is up to the federally guaranteed maximum of $250,000. That’s in response to rising interest rates, of course, and the CFO notes these times require close monitoring and responsiveness to properly manage the balance sheet.

“Even before the series of rate hikes in the past year, we used data modeling and analysis to assess rates, risk, and liquidity factors for all of our products and services,” Esparza says.

Texas Trust also conducts 18-month rolling forecasts along with quarterly “what if” scenarios.

“This enables us to stay ahead of the curve and proactively respond to market conditions,” Esparza says. “I also review data on a weekly basis and compare it to our monthly forecasting models, so we’re able to quickly adjust course if we’re not meeting our targets.”

Much the same occurs in the Valley of the Sun.

“We run every strategy through an interest rate risk model,” says Loveland at Credit Union West. “A few other things come into play with each decision we make. They include system constraints, the target audience, strategies around the balance sheet, and other key growth metrics.”

Credit Union West ran a TV ad to promote its liquidity-building, member-rewarding debit swipe campaign, Swipe to Win.

At its branches, Credit Union West promoted its share certificate campaign via on-site televisions. The campaign was designed to boost liquidity for the cooperative and interest income for members.

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Shifting Strategies

Esparza says her shop compares its products to competitors based on a deposit survey, then the team looks at loan volume before assessing its next move.

“Depending on the data, we might decide to raise rates, broker some non-member CDs, or borrow from the Federal Home Loan Bank,” the Texas Trust CFO says. “Most importantly, we price in rates to ensure we are making money at the Fed rate.”

According to Esparza, the credit union primarily bases its liquidity needs on loan volume. Currently, it is focusing less on indirect lending and more on direct lending — including cards, unsecured loans, and mortgages — with an eye toward balancing growth and liquidity by carefully managing rates and keeping an eye on the future, too. It monitors both primary liquidity and total liquidity targets, with a minimum target ratio of 15% for primary liquidity and 50% for total liquidity.

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“Texas Trust maintains sufficient liquid assets to cover all foreseeable demands for cash,” Esparza says.

According to Esparza, Texas Trust’s primary liquidity sources are cash and overnight funds, marketable investments available for sale, and borrowing coming due within 12 months.

“Our target minimum ratio is 15%, but we have maintained an average of 19.1% since the first Fed rate hike in March 2022,” Esparza says.

Credit Union West also conducts extensive interest rate risk modeling.

“Every strategy is run through the model to understand the outcomes before implementing,” Loveland says. “Our asset liability management committee meets monthly to review balance sheet requirements, including liquidity needs. Interest rates are set with approval from the board of directors based on those requirements and influences from competitor rates.”

Metrics That Make A Difference

Both Credit Union West and Texas Trust carefully assess liquidity risk, balance the need for liquidity with growth objectives, and have contingency plans in place. By effectively managing liquidity, they can continue to serve their members and contribute to members’ financial wellbeing.

“This is a constant balancing act,” says Esparza at Texas Trust. “Using data analytics, we can look at our membership from a corporate view as well as drill down to the individual member and their overall relationship with us.”

That kind of insight provides a degree of flexibility that marks the credit union difference.

“We’ve empowered staff to make rate exceptions based on a member’s relationship and longevity,” Esparza says. “For example, to help a True Blue member needing a loan or looking to move funds to another institution, we might make an exception by matching a rate or making a counteroffer.”

— This originally appeared on July 24, 2023, on CreditUnions.com.

The post Lessons In Liquidity: How 2 Sunbelt Cooperatives Attract Deposits appeared first on CreditUnions.com.

CREDIT CARD PENETRATION
FOR U.S. CREDIT UNIONS | DATA AS OF 06.30.23
© Callahan & Associates | CreditUnions.com

• During the COVID-19 pandemic, credit card spending declined drastically. It bottomed out at 17.2% but began to bounce back starting 2021.
• Thanks in part to lower rates, credit card penetration at U.S. credit unions has increased 73 basis points in the past five years, trending upward alongside a rise in the average credit card balance.
• Credit card lending at credit unions jumped 14.39% from the second quarter of 2023 to the third. Notably, the average credit card balance at credit unions reached $3,072 in the second quarter of 2023. This is the highest balance recorded since the fourth quarter of 2019. Nationwide, national credit card debt surged more than 4%, or $45 billion, in the second quarter according to reporting by CNBC.
• Heightened spending activity has contributed to a noticeable uptick in credit card net charge-offs, which increased 137 basis points year-over-year at credit unions.

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The post Credit Card Spending Rebounds. Penetration Holds Steady. appeared first on CreditUnions.com.

How can credit unions participate in the movement to protect our planet and encourage their members to do the same?

Provide Sustainable Plastics

In addition to advancing a digital-first approach, offering greener options for payment cards is a powerful way to connect with members and protect the planet. Most payment cards are manufactured using PVC (or polyvinyl chloride), and this first-use plastic comes from a combination of fossil fuel chemicals. Although each card contains only five ounces of plastic, approximately 6 billion credit and debit cards are produced annually. At this scale, plastic cards’ annual environmental impact equates to 900,000 tons of carbon dioxide.

Rather than relying on first-use plastics, sustainable cards can be manufactured using upcycled post-industrial waste, such as plastic litter, bottles, and containers from landfills. Ocean-bound plastic sustainable cards are typically made from diverted plastics that would otherwise pollute natural ecosystems within 50 miles of an ocean coastline.

An eco-friendly payment card aimed at reducing first-use plastic by reusing plastic waste might motivate sustainably minded consumers to bank with you. Offering cards manufactured with recycled PVC or recovered ocean-bound plastic is an excellent way for a credit union to reduce its overall carbon footprint while attracting new cardholders.

Support Members’ Sustainability Journeys

It is clear consumers care about the environment and are looking for ways to adopt a more sustainable lifestyle. Fortunately, credit unions already possess the data needed to identify which members are most interested in sustainability and target those members with customized messaging and offers. For example, are these members taking advantage of your recycled plastics program? Are they aware of your credit union’s other initiatives to minimize its environmental impact and reduce its carbon footprint? Is there an opportunity to contribute to green charitable initiatives your credit union supports?

Credit unions can analyze member spending data to see how and where members spend their money. You can then use this data to help members understand the environmental impact of their buying decisions and identify ways to behave more sustainably moving forward.

Prioritize The Environment

Has your credit union established internal sustainability goals? To succeed, all sustainability-related initiatives should align with the credit union’s overall mission, core values, and goals. There are many benefits to offering cards made of sustainable materials, especially if it is part of a credit union’s larger green initiative, including:

• Reduced carbon footprint. Offering eco-friendly products and programming helps reduce your impact on the environment and the communities your credit union serves.
• Positive impact on brand image. Demonstrating your credit union’s values and commitment to the environment can translate to increased member engagement and loyalty.
• Influence on buying decisions. Consumers want to do business with brands that have similar values as them, and many would pay a premium for a sustainable product.
• Competitive advantage. Eco-focused offerings can set you apart from competing financial institutions. Even if being sustainable isn’t a personal priority, the idea of using an environmentally friendly card is attractive to many consumers.

PSCU is proud to play an active role in helping mitigate the payments industry’s environmental waste through an initiative the company launched in 2021. The CUSO’s sustainability efforts include two sustainable card options that reduce first-use plastic by incorporating recycled plastic into the card body, instituting and promoting recycling efforts, reducing consumption, reusing materials, and choosing more eco-friendly products, among other initiatives.

The shift to sustainability will remain an important consideration among consumers and a growing imperative for credit unions. Implementing sustainable cards and other green initiatives empowers your credit union to take a public stance on environmental issues and unite with members and potential members around a shared cause. The credit union philosophy of “people helping people” extends to the planet we all inhabit – and credit unions should make strategic decisions and offer innovative solutions that drive real positive change in their communities and the environment.

Cody Banks leads PSCU’s payments, fraud, loyalty, and contact center product teams. In his role, Banks focuses on developing and delivering safe, easy, and convenient payments experiences for the company’s owner credit unions. Prior to joining PSCU in 2017, Banks spent nearly 10 years in the credit union industry navigating complex initiatives with a focus on journey mapping of the member experience.

The post Eco-Minded Members Seek Sustainable Solutions appeared first on CreditUnions.com.