By Ray Birch
SCOTTSDALE, Ariz.—As credit unions move deeper into 2026, the mood is cautiously optimistic—but far from euphoric. Cornerstone Advisors’ What’s Going On in Banking 2026 report paints a picture of an industry facing mounting pressure on growth, fraud, deposits, and technology decisions.
For credit unions, the coming year is less about bold bets and more about disciplined execution—a theme Elizabeth Gujral, director at Cornerstone Advisors, reinforced in a recent interview.
“This is not a swing-for-the-fences year,” Gujral said. “It’s a year about selective growth and resilience.”
That restraint matters, she argued, because the industry is being flooded with new technologies—AI, crypto, tokenization, automation—that can easily tempt leaders into chasing the next “shiny object.” The report suggests that temptation may be especially strong at credit unions, which are often quicker than banks to experiment with emerging tools.
According to Cornerstone’s data, 59% of credit unions have already deployed generative AI, compared with 49% of banks, and 17% of credit unions are investing in agentic AI, more than double banks’ 7%. Credit unions are also applying AI across fraud, contact centers, lending, IT, and back-office operations at higher rates than bank peers.
That experimentation can be an advantage—but only if it is targeted.
“Deciding to do nothing is still a decision,” Gujral said. “You can’t just push AI, crypto, or tokenization into a closet and hope it goes away. But you also shouldn’t implement technology just to implement technology. You need to put it where it actually creates value.”
Optimism, But With Growing Pressure
The report finds 73% of credit union executives say they are somewhat optimistic about 2026—slightly below banks, where optimism runs higher. That gap reflects rising pressure on credit unions to find growth in an increasingly crowded market.
New member growth is now the top concern for 69% of credit union leaders, up from 62% last year. Younger consumers, fintech competitors, and challenger banks are forcing credit unions to fight harder for relevance. At the same time, deposit growth and non-interest income remain persistent weak spots.
Gujral sees this as a year that rewards discipline over expansion.
“Resilient growth is the goal,” she said. “It’s about being smart—fixing broken processes, tightening governance, and investing where there are real pain points.”
AI Is Moving From Hype To Reality—And Exposing Weaknesses
One of the report’s strongest messages is that AI has moved beyond hype—and in doing so, it is exposing structural weaknesses inside many financial institutions.
“AI is showing clients where they have bad data, broken processes, and weak governance,” Gujral said. “If your data isn’t clean, AI will amplify that dysfunction.”
Cornerstone’s broader data-quality assessment found community financial institutions scoring just 241 out of 500 overall, with sales and marketing data ranking weakest. Even though 31% of credit unions now rate their data governance as ‘very effective,’ the report warns that personalization, smarter underwriting, and predictive marketing will stall without better integration and discipline.
In short: AI can be a growth engine—but only if institutions fix the fundamentals first.
Fraud Is No Longer Just A Back-Office Problem
Fraud emerged in the report as one of the most urgent threats facing credit unions.
Half of credit union executives rank consumer fraud among their top concerns, and 35% report fraud losses rose slightly in 2025, with another 17% citing significant increases. Looking ahead, 72% expect fraud losses to rise again in 2026, and nearly three-quarters plan to increase fraud-prevention budgets.
Gujral emphasized that fraud can no longer live in a single department.
“Fraud strategy is now credit strategy, customer-experience strategy, and brand strategy,” she said. “Underinvesting here costs real money—not just in losses, but in lost members.”
That shift forces credit unions to rethink how fraud prevention ties into lending decisions, digital experiences, and trust-building.
Crypto, Tokenization—And Another Shiny-Object Trap
Crypto and tokenization continue to loom as longer-term competitive forces, though adoption remains cautious. Only 5% of credit unions plan to invest in tokenized deposits in 2026, and 8% expect to pursue stablecoins, though 63% have discussed stablecoins at the board or executive level.
For Gujral, these emerging technologies represent another potential distraction.
“Credit unions are going to want to chase shiny things,” she said. “But instead of chasing them just because they’re exciting, they need to implement them where they create real impact—or they’ll just burn money.”
The Real Risk: Hesitation, Not Disruption
While fintechs, challenger banks, and digital-first players intensify competition—70% of executives now view firms like Chime as a major threat—Gujral believes the greatest danger for credit unions is not being disrupted.
“The biggest risk right now isn’t disruption,” she said. “It’s hesitation.”
In a year defined by rapid technological change, rising fraud, and tighter competition, the Cornerstone report suggests credit unions that pair innovation with discipline—using AI strategically, strengthening data governance, modernizing fraud defenses, and focusing on meaningful member growth—can close gaps with banks and defend their relevance.
But those that chase every trend, or freeze in uncertainty, may find themselves outpaced.