Member-Centricity Has Never Been More Important for Credit Card Programs

New research indicates that consumer adoption of fintechs as their primary financial relationship (PFR) may be cooling off. A still-uncertain economy and persistent inflation have caused consumers to seek safe and reliable options for their deposits. After shopping around, consumers seem to have opted for the security and comfort of reputable financial brands. In an ongoing study of consumers’ PFR, PSCU/Co-op Solutions and EY found that fintechs slipped back to a 10% share in 2024, down from 11% in 2022. In contrast, credit unions maintained their 17% share.

This shift in consumer prioritization is good news for credit unions. Growth strategists may want to lean in on the reliability that is keeping consumers at mainstream financial institutions.

Responding to the New Definition of Reliable

One way to do this is by focusing on the dependable tools that members use every day. Credit cards, in particular, are proving to be a go-to financial mechanism for consumers as they attempt to stay afloat amid the rising costs of living. The major banks are earning a lot of this business, but it doesn’t have to be that way. As their transaction volume has increased, so too have cardholders’ delinquencies, according to an article in The Wall Street Journal. Among the many reasons for this, a lack of consumer-centricity may be to blame. It certainly wouldn’t be the first time the major banks put profits ahead of people.

Credit unions can offer something different, not just in terms of lower rates and fees or empathetic service during difficult times. They can also win on reliability – provided they meet the new definition of reliable. In the mind of a modern consumer, reliability and convenience are interdependent. Today’s credit union members expect payments vehicles that work every time, anywhere – but that’s not all. Reliable also means the card functions on the member’s terms, not the issuer’s. What’s more: It provides autonomy and control, fitting into individual cardholder lifestyles. In other words, a reliable credit card is member-centric.

3 Steps to Member-centricity in Credit Cards

Locking in on member-centricity within a credit union card program boils down to three steps:

1. Engage every day. Micro transactions are known to solidify relationships. In fact, they are the pathway to primacy. Ensuring the credit union card is the first one a member reaches for may require some enhancements. Meet-the-member-where-they-are features, like Buy Now, Pay Later (BNPL) and digital wallet connections, are good examples. Being able to rely on flexible repayment terms gives the cardholder confidence, especially if they are confronting cash flow issues. Some 60% of consumers polled by PSCU/Co-op and EY admitted to having more debt than they can pay off. Digital payments, too, can facilitate better cash flow, enabling members to accept short-term loans from friends and family via tools like Zelle, Venmo and CashApp.

2. Give good guidance. Against that backdrop, it’s clear that a member-centric credit card is one that encourages, not threatens, financial wellness. Using even basic predictive analytics, credit unions can introduce only the most financially healthy credit card products to the right set of members. Giving cardholders access to self-service spending controls helps in this regard, as well, as does enabling them to view their credit scores and providing a look at month-over-month spending patterns.

3. Earn member balance sheet. Another interesting finding from the PSCU/Co-op and EY research into PFR was how survey participants defined the status. Last year, 14% said they define PFR as the institution that “has most of my money.” That definition rose 9 points to 23% this year, earning it as the top reason consumers consider a financial institution as primary. This seems to indicate consumers know the value of their deposits and may increasingly expect relationship ROI as much as financial ROI from the institutions that keep their money safe and accessible. Hyper-relevant bundling and fee/price breaks are two great ways to deliver relationship ROI, in addition to seamless digital connections that let the member interact with all their financial products from a single dashboard.

When credit unions win credit card business, the card-carrying community grows just a little bit healthier. Motivated by the people-helping-people philosophy, credit unions see the payments product as an enabler of members’ long-term financial health – not as a way to pad the bottom line or satisfy shareholders. By investing in the member-centricity of credit cards, credit unions can draw even more people into the movement, earning PFR and building a financially thriving community along the way.

Carrie Stapp is SVP, Marketing for PSCU/Co-op Solutions.