As the financial landscape continues to evolve, credit unions are faced with an important question: how can they continue to grow while providing real value to their members? One clear answer lies in partnering with financial education fintechs. These innovative platforms are more than just a trend; they are essential for credit unions that want to enhance member services, boost engagement, and remain competitive in an increasingly digital world.
Here are our top 5 reasons why partnering with financial education fintechs is a smart move for credit unions.
1. Enhancing Member Financial Wellness
At the heart of every credit union’s mission is the desire to improve the financial well-being of its members. By partnering with financial education fintechs, credit unions gain access to powerful tools that help their members make smarter financial decisions. These fintech platforms offer everything from personalized budgeting apps to interactive learning modules on saving, investing, and managing debt.
A survey from PwC found that 54% of Americans are financially stressed, with only 24% demonstrating basic financial literacy. By offering educational tools, credit unions can help address this growing need for financial literacy, resulting in improved financial habits and more confident, satisfied members.
2. Driving Member Engagement and Retention with Financial Education
One of the biggest challenges credit unions face is engaging members, particularly younger, tech-savvy individuals who expect digital solutions for their financial needs. Financial education fintechs provide a unique way to connect with these members by offering engaging, mobile-first platforms that are both educational and interactive.
Studies show that 89% of consumers use mobile banking, and members who frequently engage with digital tools are more likely to remain loyal. In fact, a 5% increase in member retention can lead to as much as a 25% increase in profits.
3. Expanding Digital Capabilities and Reaching New Audiences
In today’s fast-paced digital world, offering tech-forward solutions is no longer a luxury—it’s a necessity. Fintechs, particularly those focused on financial education, can help credit unions quickly expand their digital capabilities without having to build these systems from scratch.
Gen Z and Millennials are revolutionizing the way they bank and prefer financial institutions that offer robust digital services with roughly 85% Millennials prefer online and mobile digital services, followed by Gen Z at 79%. By integrating fintech-powered financial education, credit unions can attract these younger demographics, as well as underserved communities, ensuring they remain competitive in the rapidly evolving financial marketplace.
4. Strengthening Community Trust and Reputation
Credit unions have always been seen as trusted financial partners, deeply rooted in their communities. Partnering with fintechs that specialize in financial education strengthens this reputation even further. By offering accessible, high-quality financial literacy resources, credit unions can position themselves as advocates for financial empowerment in their communities.
A report by the National Credit Union Administration (NCUA) found that members who feel their financial institution is invested in their personal well-being are 76% more likely to recommend it to others.
A recent study from Plinqit found that 47% of Millennials and 43% of Gen Z are saving primarily to pay off debt. This highlights a growing financial challenge among younger generations, many of whom face student loans, credit card debt, and rising living costs. For credit unions, this presents an opportunity to better serve their members by offering targeted financial education programs that address debt management and financial planning.
By empowering members with the knowledge and tools to manage and reduce their debt, credit unions can play a pivotal role in helping them achieve their long-term financial goals, such as building savings and investing in their futures. Offering these resources not only strengthens member loyalty but also positions the credit union as a trusted partner in their financial wellness journey.
5. Boosting Product Adoption and Cross-Selling Opportunities
When members are better educated about their finances, they’re more likely to explore and use the products and services their credit union offers. Financial education fintechs play a crucial role in helping members understand the benefits of services like loans, mortgages, retirement accounts, and investment products.
Fintechs like Kredit Academy, a leader in the financial education sector, reports that its financial wellness programs improve members’ understanding of financial products, leading to a significant increase in service adoption, especially among younger users.
Conclusion: A Path to Sustainable Growth and Member Satisfaction
Partnering with financial education fintechs isn’t just about staying relevant in a digital age—it’s about ensuring long-term success for both credit unions and their members. From enhancing financial wellness to boosting member engagement, expanding digital capabilities, and strengthening community ties, these partnerships offer a wealth of benefits.
If your credit union is looking for ways to drive growth, deepen member relationships, and improve financial literacy, now is the time to explore fintech partnerships. Financial education is the key to building stronger, more resilient communities—and credit unions are perfectly positioned to lead the way.
Sources:
- PwC’s 2023 Employee Financial Wellness Survey: This survey provides insights into how financial stress is affecting workers across income levels, including its impact on productivity and mental health.
- Insider Intelligence. (2022). Mobile Banking Trends: Report on data of mobile banking usage and consumer preferences.
- Bain & Company. (2018). Retaining Customers and Increasing Profitability: This report discusses strategies for retaining customers and the link between retention and profitability.
- MX. (2022). Consumer Research on Digital and Mobile Banking: This report highlights key research findings that show a preference and demand for digital services, the desire for personalized, proactive support in managing finances, and a growing opportunity to connect all financial accounts into one view.
- National Credit Union Administration (NCUA). (2020). The Power of Community Trust: NCUA’s research highlights the importance of trust in community institutions like credit unions.
- Plinqit. (2024). State of Savings Report: This report found that while 90% of Americans are saving for something this year, many are struggling to maintain consistent saving habits due to inflation and rising living costs, with a growing focus on paying down debt.
