By Ray Birch
TORRANCE, Calif.–UNIFY Financial Credit Union is now offering cryptocurrency services to its members, a move it believes will help it win over new members in a very competitive market.
But the $3.6-billion CU did not make the decision without first polling its membership, finding significant interest in cryptocurrency from existing account holders.
“We surveyed our membership and 58% of our digitally engaged members said they are either very interested or interested in the ability to interact with cryptocurrency,” Chief Information Officer Greg Glawson told CUToday.info. “We have yet to make any business projections, but we have a really good feeling around just how much interest there's going to be, and there appears to be a good amount of it from our members.”
Glawson pointed out the poll also revealed 15% of its current 265,000 members are already interacting with some form of cryptocurrency.
“Looking forward about this decision, we feel it is something that we need to do to keep and grow relationships, and it will also add to our bottom line,” he said. “This will provide us with a strong competitive advantage in the marketplace, and we're all competing for members and customers here.”
When UNIFY Financial made the decision in late 2021, it became what is believed to be the first credit union in the U.S. to offer cryptocurrency services. Since that report, a few other CUs have also decided to enter the crypto space.
As CUToday.info reported, UNIFY Financial along with Five Star Bank in Warsaw, N.Y. announced they would offer their members/customers the ability to buy, sell and hold Bitcoin through the integration of solutions provided by NYDIG and the Q2 digital banking platform. NYDIG is a financial services firm focused on Bitcoin.
What Consumers are Saying
According to NYDIG’s research, more than 20% of American adults own Bitcoin and more than 80% of those individuals would store it with their primary bank or credit union if the service was offered. Additionally, more than 71% of Bitcoin holders say they would switch to a bank or credit union that supports Bitcoin, the company stated.
“We know there's a lot of interest out there in the market about cryptocurrency, and we know for a fact a lot of our members are exploring the opportunity and researching and investing through other platforms,” said Glawson. “We're constantly in search of ways to add value and meet our members’ needs—whatever those are. We can become a trusted financial partner when it comes to this new world of cryptocurrency.”
Giving Members an ‘Opportunity’
Glawson noted a Gartner survey shows 60% of consumers who don't currently explore cryptocurrency said if their banking partner offered the ability to transact in cryptocurrency, they would buy, sell and hold cryptocurrency.
“So, we’re going to give our members the opportunity to buy, sell and hold cryptocurrency,” Glawson said. “Now, if you're a UNIFY Financial member, you can log into your home banking account and say, ‘Bitcoin looks really good today, and I want to buy $500 worth of Bitcoin.’ Well, you can do that through the credit union.”
For members looking to get started–the credit union requires at least $500 in Bitcoin to be purchased–UNIFY Financial offers a how-to video on its website. The video includes graphs showing the volatility in Bitcoin values.
Members log into e-banking and from the dashboard can select the Bitcoin icon where there is information on Bitcoin and a disclosure form. Member can then click on a Buy Bitcoin button and identify the account from which they want funds withdrawn.
According to the website, UNIFY Financial charges a transaction fee of 2.5% based on the purchase amount. A transaction receipt is available showing the details of the purchase. The e-banking page of the credit union’s website includes information on the individual member’s Bitcoin holdings.
To sell Bitcoin, the process is similar with simple interfaces offering the options. The same 2.5% fee applies to sales.
Glawson said the Bitcoin funds will reside in a “digital wallet” for which the CU is a custodian.
“Right now, we are just giving members the opportunity to buy into the market,” Glawson explained, adding that interacting with Bitcoin ATMs is not something UNIFY Financial is currently allowing members to do.
To proceed with the service, Unify Financial did not need to add staff or bring new skills sets to existing employees.
“But there certainly has been a lot of education internally around the cryptocurrency space,” said Glawson. “There has been an additional, small, new technology component connecting us and our digital banking platform with a cryptocurrency exchange.”
The Crypto Forecast
Looking into his short-term crystal ball, Glawson sees cryptocurrency becoming much more mainstream within two years.
“Twenty-four months into the future, I believe cryptocurrency integration is going to be a staple of a financial institution,” he said. “If there's an opportunity to offer it first, it just sets the tone for your institution. I think in terms of our growth, I think this will have a really large impact on us just because we know that this cryptocurrency is extremely interesting for our members and non-members. We believe it's going to be a new account differentiator.”
Glawson said the program has generated widespread interest from members, even with a rollout that did not involve any advertising. Indeed, when the offering was announced in 2021 UNIFY Financial received more demand than it expected and had to create a waiting list.
The move by UNIFY has drawn attention from other credit unions, which have reached out questions. Glawson said fintechs have reached out, as well, not only asking questions but suggesting additional crypto partnerships.
Glawson added NCUA has been in touch with UNIFY Financial before and during the rollout.
“So far, NCUA has not shared any concerns with us, and has been a partner,” Glawson said, explaining the agency is asking the CU a lot of questions and wants to watch as the program rolls out so it can learn what the credit union learns.
Getting Educated
UNIFY is also encouraging its members to educate themselves about cryptocurrency before they buy Bitcoin through the CU.
“This is just a very new offering, unlike any other traditional financial product,” Glawson said. “Therefore, we want to make sure we have all the right information and educational programs around cryptocurrency so members are making an informed choice.”