NEW YORK—Fresh research on credit union innovation delivers a message many FinTechs may not want to hear: branches still matter—especially when it comes to retaining the most loyal members.
That’s a key, though often overlooked, finding from The Omnichannel Imperative: Why Credit Unions Need Both Digital and Physical to Thrive, a new report from PYMNTS Intelligence, sponsored by Velera.
The study highlights how leading credit unions are balancing rapid digital adoption with the enduring value of in-person service, concluding that sustainable growth will depend on investing in both channels.
Even as digital onboarding, mobile card issuance, and Gen Z-focused features capture the spotlight, the report finds that members still want in-person banking. Credit unions—known for their relationship-first approach—are well positioned to thrive in this hybrid model, provided they don’t abandon physical channels in the rush to go fully digital, PYMNTS said.
Key data points from the report include:
- Fifty-one percent of credit union members, including consumers and small businesses, prefer face-to-face service for their financial needs, underlining the branch’s continued role in member retention.
- Sixty-five percent of Baby Boomers visit their credit union in person, and 53% also use the credit union’s website, making them the most omnichannel-engaged demographic.
- Seventy percent of members who frequently use ATMs cite cash withdrawals as the primary reason, showing that self-service tools remain a critical bridge between digital convenience and physical access.
While digital expectations continue to rise—especially among Millennials, Gen Z, and small to mid-sized businesses—the report makes clear that the future is “phygital,” not purely digital, PYMNTS noted.
Navy Federal Credit Union underscored that point in March, opening a new branch at Fort Irwin to serve 10,000 members in a military community, even as branch closures hit record levels nationwide. The move reflects a broader truth: trust, accessibility, and loyalty are often forged face-to-face, particularly in underserved or high-need areas, PYMNTS said.
Policy shifts are also beginning to align. In North Carolina, lawmakers are considering a bill that would allow credit unions to serve rural residents living more than eight miles from a bank—a population disproportionately affected by branch closures. If approved, the measure could expand access and encourage new investment in “banking deserts” abandoned by traditional institutions, PYMNTS said.
The digital side of the story is equally important. Among SMBs that switched institutions, 68% say they preferred digital onboarding, while Gen Z is 78% more likely than the average consumer to expect digital onboarding and QR code payments. Top-performing credit unions are now 49% closer to offering a full suite of digital features compared to their lower-performing peers, PYMNTS said.
Still, PYMNTS noted, the strongest institutions aren’t choosing between channels; they’re integrating them.
“Credit unions that blend digital convenience with the human touch of branch access are not only meeting today’s expectations across every generation but also setting the standard for trust, accessibility and long-term loyalty,” Amy Evans, senior vice president at Velera, said.