To reach them, a personal touch will be essential. Credit unions (CUs) have the advantage of personalization — and a receptive audience — to deepen their digital relationships with a broad range of members, Jeremiah Lotz, senior vice president, product and data experience at Velera, told PYMNTS.

The conversation took place as part of the continuing “What’s Next in Payments” series focused on how companies have been reinventing their digital efforts to connect with consumers.

When it comes to the digital engagement credit unions have with their end users, he said, it’s not just about how often they’re logging on, but how members are interacting with those CUs, and how effective the financial institution is in serving the needs of those digitally-minded consumers.

“One of the biggest measurements we look at is: Was a consumer able to complete something that they expected, and then how did they feel about that experience as they went through that process?” he said.

With analysis and digital insight that extends well beyond simply keeping tabs on logins and clicks of digital buttons, a holistic view begins to emerge as to how successful the credit union’s outreach has been — and how things can be improved.

If the credit unions are able to serve the needs of their various markets quickly and intuitively, said Lotz, “that’s how you’re going to capture the long-term digital users.”

Taking Stock of Different Demographics

There’s no one-size-fits-all approach to digital engagement, he said. The right digital experience means different things to different demographics, said Lotz, but there’s growth across the board in all age groups.

The conventional wisdom might hold that younger generations may be naturally more digitally-savvy than older cohorts. The fact is, though, that even older credit union members, boomers among them, have found value in taking more of their daily financial lives online, having been primed by ordering food and groceries through various apps and platforms to get things done with digital devices.

In short, he said, “all generations have had higher demand, and higher expectations, of digital capabilities” from their financial institutions. “Every generation is asking for new functions and new features, and even providing information through the digital channels that maybe we didn’t expect a few years ago when it comes to applying for credit cards and loans, for example.”

Improving the Outreach

The stage is set, then, for credit unions to capitalize on the advantages they already have with their members — and those advantages lie with personalization and collaboration. With the credit union service organization (CUSO) model in place, through Velera, data sharing and a wholesale embrace of technology through a central point of contact can help all CUs, Lotz said.

“By leveraging that consortium data and information across the credit union — we provide a best-in-class experience regardless of the FI [financial institution] they are with,” he said. In the meantime, CUs can make decisions more quickly and can even streamline the credit approval process. Artificial intelligence (AI) is being leveraged to help CUs offer even more intuitive and advanced decision-making and innovations extended to their end users. The same transaction level and account-level data that’s shared throughout the organization can be used to personalize experiences so that CUs can anticipate the next product or service that can be extended to the individual for consideration. A reminder that the member’s car payment or mortgage payment is due can — based on the individual’s background and data — help educate them that an extra $100 paydown on the loan can help save on interest and other fees down the line.

It’s a proactive approach rather than a reactive one, said Lotz — one that results in the member logging on not just to get basic banking done, but to ask, as Lotz put it, “What is my FI going to tell me today — and what is it going to direct me to in order to make my financial situation better?”

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The CUSO started providing credit card processing support to the credit union in June and will add debit card processing services by the end of September, Velera said in a Thursday (Sept. 12) press release emailed to PYMNTS.

“As a CUSO, Velera shares a unique understanding of our needs and values, fostering a partnership that is built on mutual goals and trust,” Natasha Schneider, vice president of finance at BrightStar, said in the release. “Its state-of-the-art card processing solutions bring enhanced functionality to our cardholders, offering advanced features such as contactless payments, real-time transaction alerts, seamless mobile integration and robust fraud protection.”

BrightStar joins more than 4,000 financial institutions across North America that are served by Velera, which was formerly PSCU/Co-op Solutions, according to the release.

Brian Scott, executive vice president and chief growth officer at Velera, said in the release: “Velera and BrightStar Credit Union share a commitment to providing innovative solutions and best-in-class service. We are extremely pleased to have the opportunity to help BrightStar enhance its member experience across the South Florida community.”

This news comes about a week after Velera announced an expanded partnership with HawaiiUSA Federal Credit Union that saw the CUSO adding debit card processing support to the credit card processing support it already provided to the Honolulu-headquartered credit union. HawaiiUSA delivers services to more than 132,000 members.

In another recent move, the CUSO said Sept. 4 that it launched the Velera Innovation Alliance (VIA), a coalition of 13 credit union executives that aims to drive competitiveness and improve the sustainability of credit unions in the digital financial ecosystem.

Together with Velera, the executives will take part in proof-of-concept (POC) planning and testing, give feedback on POCs being developed by VIA members, discuss their areas of focus for their respective credit unions and offer insights into criteria for partnering with FinTechs.

Keeping a pulse on shifts and trends can help organizations prepare to overcome any challenges they may face, Velera CEO Chuck Fagan wrote in the PYMNTS eBook, “Beyond the Horizon: How to Identify Unexpected Threats That Could Impact Your Business.”

“With the right tools and protocols in place, along with a willingness to be flexible and resilient, organizations can be well positioned to navigate the remainder of 2024 and enter the next year ready to succeed,” Fagan wrote.

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The VIA is a coalition made up of 13 credit union executives and aims to drive competitiveness and improve the sustainability of credit unions in the digital financial ecosystem, according to a Wednesday (Sept. 4) press release.

“Together, we will explore cutting-edge technologies, identify innovative opportunities, engage in active participation for proof-of-concept (POC) initiatives and ultimately support and promote our Fintech Engagement Program across the credit union industry,” Velera Vice President of Innovation Vladimir Jovanovic said in the release.

The executives in the alliance will take part in POC planning and testing, giving feedback on POCs being developed by VIA members, per the release. They will also discuss their areas of focus for their respective credit unions and offer insights into criteria for partnering with FinTechs.

The PYMNTS Intelligence report “How FinTechs Can Align With Credit Union Innovation Agendas” found that most FinTechs view credit unions as collaborators instead of rivals.

The report examined how FinTechs are innovating to meet the financial needs of credit union members. It was based on a survey of 110 executives at FinTechs that provide services to financial institutions, as well as individual consumers.

Velera was previously known as PSCU/Co-op Solution before it rebranded in May.

The new name reflects the company’s dedication to driving velocity and positive momentum for credit unions.

“We are now Velera, and we are extremely proud of what we are creating with this new brand,” Velera President and CEO Chuck Fagan said in a statement. “We are energized for the future as we provide credit unions with a competitive advantage in an ever-evolving market, ultimately driving momentum for credit union missions across the country.”

In the PYMNTS eBook “Beyond the Horizon: How to Identify Unexpected Threats That Could Impact Your Business,” Fagan stressed the importance of credit unions’ ability to combat fraud.

“While uncertainty will always remain present in the payments and credit union industries, careful contingency planning and keeping a pulse on shifts and trends can help organizations be best prepared to overcome any challenges they face,” he said.

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Many FinTechs partner with credit unions (CUs) and other financial institutions (FIs) to provide the innovative products and services that today’s digital-first consumers expect. In fact, almost all view CUs as collaborators more than competitors. To be successful partners, FinTechs need to align their innovation roadmaps with CUs’ innovation agendas.

A key objective among FinTechs is to innovate around self-service banking. PYMNTS Intelligence’s data shows most FinTechs planning at least one type of self-service banking product. This is one way that FinTechs’ innovation roadmaps align with CUs’ agendas. But our latest report reveals areas of misalignment that FinTechs need to address.

These are some of the key findings explored in “How FinTechs Can Align With Credit Union Innovation Agendas,” a PYMNTS Intelligence and Velera (formerly PSCU/Co-op Solutions) collaboration. This report examines how FinTechs are innovating to meet the financial needs of CU members. The report is based on a survey of 110 executives at FinTechs that provide services to FIs and individual consumers. Conducted between March 7 and April 1, the survey investigated how FinTechs partner with CUs to provide innovative banking solutions.

The report also includes insights from a survey of 200 CU executives conducted from March 7 to April 2. This survey aimed to learn about CUs’ current product and feature offerings as well as their plans for future innovation.

Inside “How FinTechs Can Align With Credit Union Innovation Agendas”:

• The obstacles that FinTechs say they face when selling to CUs
• Details about how FinTechs view their relationships with CUs
• What products and features FinTechs plan to offer in the next three years
• How FinTechs’ innovation pipeline helps CUs’ meet the needs of digital-first members
• Where FinTechs’ innovation priorities differ from CUs’ priorities
• The internal challenges that FinTechs face when bringing innovations to market

Although FinTechs partner with CUs to provide the products and services that today’s digital first consumers expect, these partnerships are not without frictions. The report explores the challenges FinTechs face internally and externally when bringing innovative products to market.

Eight charts of insightful data explore the opportunity for FinTechs when they align their innovations roadmap with what CUs’ want. Download the report to learn about how both are innovating digital banking and payment solutions to drive future growth.

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“We believe innovating on new approaches, advocating for our membership and crafting unique solutions will result in a successful partnership, and we are excited about all that we will achieve in our new relationship with Velera,” Maria Moore, senior vice president of member experiences at Civic, said in a Thursday (Aug. 22) press release.

Velera will begin providing membership experience support services for Civic in the fall, according to the release.

Round-the-clock member support via its contact centers is one of the many services and financial technology solutions that Velera offers to financial institutions, per the release.

“Civic’s approach to digital- and people-first financial services is perfectly aligned with our goals at Velera,” Brian Scott, executive vice president and chief growth officer at Velera, said in the release. “We are eager to provide the credit union and its members with elevated and enhanced contact center services and offerings.”

Velera serves more than 4,000 financial institutions throughout North America, according to the release. Together with member support, the CUSO offers payment processing, fraud and risk management, data and analytics, digital banking, instant payments, strategic consulting, collections, ATM and POS networks, and shared branching.

The CUSO was formerly known as PSCU/Co-op Solutions, and it is rolling out the Velera brand in phases through the next year.

The joint efforts of PSCU/Co-op, which combined in January, are crystallized in an Emerging Services team and in a FinTech advisory group that helps credit unions take a leading-edge approach to new distribution channels and digital efforts, Chuck Fagan, president and CEO of Velera, told PYMNTS CEO Karen Webster in an interview posted in June.

“Marrying up those segments with the FinTechs and the 4,000+ FIs” served by Velera “puts us in a good position” to modernize credit unions’ operations and offerings, Fagan said.

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Credit union (CU) executives understand the importance of innovation. However, PYMNTS Intelligence uncovered a disconnect between how some CUs measure innovation success among different performance tiers.

More than three-quarters of top performers benchmark their innovation agenda’s return on investment (ROI) by increases to their membership base and revenue growth. Significantly fewer bottom performers use these metrics.

Top performers see Big Tech companies and companies that provide alternative lending and banking services as competitors for members. Bottom performers, meanwhile, worry most about competition from local and regional financial institutions. These differences suggest that top performers may be better positioned to reduce churn and engage new members.

These are some of the insights explored in “How Top-Performing Credit Unions Innovate to Stay Competitive,” a PYMNTS Intelligence and Velera (formerly PSCU/Co-op Solutions) collaboration. The report examines how CUs are investing in innovative products and services to retain current members and attract new ones. This report is based on a survey of 200 CU executives conducted from March 7 to April 2. The survey sought to learn about CUs’ current product and feature offerings as well as their plans for future innovation. Download the report here.

Inside “How Top-Performing Credit Unions Innovate to Stay Competitive”:

• Comparisons of how top, middle and bottom performers rank in the Innovation Readiness Index
• Analysis of how CUs’ innovation agendas align with what their members want
• How CUs measure the ROI of their payment innovations
• Insights into which entities CUs in different performance tiers identify as their competition
• What CUs see as their top competitive advantages
• Seven steps CUs need to take to increase their payment innovation readiness

The report explores the current state of CU investment in innovation. It reveals how top performers stay competitive by providing the products and services that today’s digital first consumer expect. Eight charts of insightful data explore what’s working for top performers and where the rest lag behind. Download the report to learn about how top-performing CUs leverage innovation to grow their memberships.

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Via collaboration, SavvyMoney’s personalized financial management tools will be made available to users of the Constellation Digital Banking platform, the companies said in a Tuesday (Aug. 6) press release.

“Constellation’s goal has always been to help credit unions develop the technology roadmap they need to meet their unique business demands and address the needs of their members to thrive in today’s digital banking environment,” Constellation founder and CEO Kris Kovacs said in the release.

Constellation’s open development platform allows credit unions to deliver a customized digital banking experience to their members by connecting to FinTechs like SavvyMoney, according to the release.

SavvyMoney’s credit scoring solutions and analytics help community financial institutions provide better, faster decisioning, while its interactive digital tools and personalization capabilities enable them to support the financial wellness of their customers and members, per the release.

“By integrating SavvyMoney’s market-leading credit monitoring solutions and offers engine into Constellation’s platform, we aim to enhance digital engagement and provide credit unions and their members with invaluable insights and resources to effectively manage financial health,” SavvyMoney Chief Revenue Officer Chris Fraenza said in the release.

In another move, SavvyMoney debuted an offer automation tool for financial institutions in July. The offering, dubbed “Get My Rate,” allows users to pre-qualify for multiple offers simultaneously, receive ongoing alerts when rates change in their favor, and get continuous credit monitoring and a comprehensive set of financial wellness tools designed to help them improve their financial profile over time.

The PYMNTS Intelligence report “Bolstering Credit Union Membership With Superior Lending Options” found that credit unions have the qualities and values borrowers seek, as they can offer better lending rates and personalized customer service that are especially valuable during economic downturns.

Credit unions can use a personalized approach to work with new and existing borrowers, find ways to help borrowers rejected on their first try and keep delinquency rates low by applying a personalized touch.

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Christine Blake, CEO of Cardinal Credit Union, told PYMNTS that the firm’s recent debut of a suite of new digital capabilities seeks to deliver data-driven, personalized experiences no matter where and when members choose to conduct their daily financial lives.

Cardinal Credit Union launched its new online banking platform late last month, with features spanning  personalized financial recommendations, and a “holistic dashboard” to track finances, along with real-time payments and automatic transfers, along with a real-time chat function with a live person. Partners include Lumin Digital and Velera.

The launch belies the conventional wisdom that smaller banks do not need to be as digital as their larger brethren — simply because their customers don’t expect them to be digital.

“That’s not where anybody is today,” Blake said, adding that “everything in payments is on your phone — your debit card, credit card, everything that you use is on your phone now … and things are just getting faster and faster.”

Speaking of things getting faster: Banking customers are becoming increasingly familiar with the potential inherent in real-time payments, and are demanding that the option be made available (though there are still some concerns about fraud). Open banking makes it possible to aggregate account data, while connecting banks and FinTechs to enable new services and products. Buy now, pay later (BNPL) options are seeing a groundswell of popularity … and all of it is being done digitally.

Moving Into the Digital Age

While it’s true that the credit union has its share of consumers who want a high-touch experience in the branch itself — they’ve got questions about loans, credit scores and want to meet face-to-face at times — there’s a growing need to deliver always-on, on-demand banking.

Customers are skewing ever-younger, and Cardinal Credit itself can bank on a wellspring of new members signing on as a result of its ongoing financial education programs that extend across five local high schools and Lakeland Community College. The credit union has designed a curriculum that helps attendees open accounts, use cards and tap modern technology as they learn more about banking.

The CU also conducts monthly financial wellness seminars, as its branches are transformed into financial education centers rather than existing as places to manage checking and savings accounts. Blake noted to PYMNTS that as the financial institution (FI) interacts with members in the branch setting, it has the opportunity to introduce those members to the digital offerings, guiding them through the experiences surrounding multifactor authentication and other features. Half of Cardinal’s staff is made up certified financial counselors who are well equipped to serve as informational sources for members. The digital offering is a natural complement to the branch interactions, she observed.

“We knew this was something that we wanted,” said Blake of the digital platform, “and it was just a matter of time before we could afford this and find the right partners to bring it to our members.”

As she told PYMNTS, with a nod to the streamlined experiences embedded in the platform. “People do not want to have to click five times to get somewhere — and they do not want to have to do a ton of research to find something … We want to make things simple and clear but have all the additional features you might  need or want, while at the same time offering a beautiful experience to the member.”

The combination of the digital and tactile experiences, she said, caters to the tech savvy and the less technically-adept members, as data from its debit and credit partners and its technology providers offers insight into the trends that are shaping member expectations. Given the community and educational focus, Blake said that the newest offerings on Cardinal’s horizon are geared toward helping younger members branch out into investors. With Bits of Stock, as members use debit cards, they accrue rewards that can then be used to buy fractional shares of stock.

The focus for Cardinal Credit Union is to move people who might be used to the traditional banking space to a digital platform, said Blake. “If you want to be relevant  tomorrow, you’re gong to need those technologies today — and we need those tools to bring people along, and we’re their trusted financial advisor.”

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Credit union (CU) members tend to value benefits such as personal service and a sense of community associated with CUs. Data reveals, however, that CU members increasingly show interest in self-service options and the convenience they provide. Like many digital-first consumers, CU members increasingly expect a seamless user experience across digital and physical channels. As a result, they choose providers that are up to speed on the latest innovations.

Ongoing innovation in self-service banking — including online and mobile options and the ability to use any ATM — can help CUs stand out, especially among younger consumers. For instance, nearly one-quarter of Generation Z and bridge millennials choose a financial institution (FI) based on self-service banking convenience and user experience. CUs that innovate in self-service banking are well positioned to grow memberships among younger consumers — especially Gen Z.

These are just of the findings from “How CUs Can Drive Engagement with Self-Service Banking Innovation,” a PYMNTS Intelligence and Velera (formerly PSCU/Co-op Solutions) collaboration. This report examines how self-service banking innovation can help CUs retain their current members while attracting new ones. It is based on a census-balanced survey of 4,551 U.S. consumers investigating which products and features consumers want and expect from CUs. The survey was conducted between Feb. 29 and April 8.

Other key findings from the report include:

Self-service banking innovations are popular with all members, but millennials are most likely to say they rely on ATMs.

More than six in 10 CU members say they rely on online banking the most when accessing financial services. Mobile and online banking are the most popular among Gen Z consumers, but only by a narrow margin. Meanwhile, at 14% each, millennials and bridge millennials are the most likely to use ATMs the most. These findings highlight the importance of self-service banking options in driving CU membership growth, especially among younger consumers.

CU members mainly using ATMs are twice as likely as in-person banking members to choose a CU as their primary bank for self-service banking.

Data shows a correlation between how consumers most often access financial services and their interest in self-service banking convenience. While 18% of CU members who prefer using ATMs say self-service banking convenience is important when choosing to use a CU as their primary FI, just 9.1% of CU members who prefer in-person banking say the same. CUs wanting to reduce churn and attract new members need to focus their innovation efforts on providing self-service banking.

Lack of familiarity and restrictive credit offerings deter many younger consumers from joining CUs.

Better marketing may be necessary to convince the many non-CU members to join a CU. For example, millennials are the most likely to say unfamiliarity with CUs is a reason for not becoming a member. Gen Z is more likely to cite restrictive credit offerings as a reason for not choosing a CU.

CUs need a multipronged approach to attracting new members while retaining current ones. Ongoing self-service banking innovation can help CUs engage Gen Z members today and into the future. However, they cannot neglect user experience, marketing and lending criteria. Download the report to learn how leading CUs are innovating to attract digital-first consumers.

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Formerly known as PSCU/Co-op Solutions, Velera said in a Thursday (June 27) news release that the new platform offers credit unions more transparency and better collaboration and lays a foundation for future generative artificial intelligence integration.

The new Project Management Page is powered by ServiceNow and can be found in Velera’s Service Portal. It is a self-service solution that lets credit unions see project demand and active project requests in real time and in one place. The platform replaces manual processes with a more streamlined way to manage projects, according to the release.

Velera President and CEO Chuck Fagan said in the release that the “offering will transform the marketplace.”

“To date, few companies have been able to successfully implement this type of technology, and we are excited about its ability to provide a significantly enhanced experience for our credit unions,” he added in the release.

Credit unions are increasingly seeking new ways to attract and retain customers. The PYMNTS Intelligence report “How Credit Union Innovation Can Drive Gen Z Engagement” found that 95% of credit unions are focused on growing their Generation Z customer base, as this demographic is projected to increase spending by as much as six times by 2030.

More Gen Z consumers are transitioning into higher-paying jobs, allowing them to spend more on big-ticket purchases. As their incomes grow, credit unions perceive that these consumers will likely need more sophisticated financial products and services.

However, as PYMNTS Intelligence found, Gen Z consumers can be fickle. Forty percent of Gen Z credit union members surveyed said they changed their primary financial institution in the past year, with lack of innovation being a factor. Gen Z members are 2.5 times more likely than baby boomers and seniors to say they would switch financial institutions that failed to innovate.

Velera serves more than 4,000 financial institutions in North America, per the release. It offers payment processing, fraud and risk management, data and analytics, digital banking, instant payments, strategic consulting, collections, ATM and point-of-sale networks, shared branching and member support via its contact centers.

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