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With 2025 in full swing, several hyper-relevant trends are emerging in the financial services sector. The impact of AI, faster payments and regulatory shifts should be top of mind for institutions of all sizes, particularly credit unions seeking to maintain a solid foothold this year and beyond. Here are five trends that credit unions should have on their radar for 2025.
1. Faster Payments
It’s been over a year since the launch of the FedNow Service, which provided the first new U.S. payments rail in over 50 years. Since hitting the market, FedNow has ignited activity among financial institutions, empowering credit unions to understand their options better and navigate potential use cases for business and member clients.
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Despite the benefits of faster payments, adoption remains low, with several financial institutions apprehensive about implementing these services. Currently, 470 credit unions have joined FedNow, and 93 are participating in The Clearing House’s RTP network. A staggering 85% of U.S. financial institutions have yet to implement instant payment solutions. Concerns around fraud, notably authorized sender fraud, have contributed to slower adoption despite fraud rates being lower on FedNow and RTP compared to traditional payment systems. Market demand uncertainty also plays a role, as some credit unions are conditioned to take a wait-and-see approach.
Even with these challenges, instant payments are becoming a fixture in financial services, with use cases expanding across government disbursement, digital wallets and eCommerce. In 2025, financial institutions must act swiftly to integrate instant payment capabilities or risk falling behind as demand for faster, more secure transactions continues to grow.
2. AI Opportunities for Credit Unions
The impact of AI on financial services is enormous and expanding. AI adoption has reached a tipping point in the boardrooms of financial institutions. Regardless of size and charter, credit unions must approach generative AI adoption strategically to manage risk and stay compliant.
The advent of generative AI and AI agents has sent shockwaves through the banking landscape, offering efficiency gains and competitive advantages. In the past, credit unions and banks leveraged AI for tasks such as loan decisioning, fraud detection and analytics. However, the accelerated adoption of AI is reshaping the industry. Notable vendors like Adobe and Salesforce have already begun integrating generative AI, making a strategic approach to implementation crucial for compliance, risk mitigation and long-term success.
Recognizing AI-related risks will be essential for credit unions. Employees often use AI tools without oversight, creating data security vulnerabilities. Additionally, vendors integrating AI into existing platforms could introduce compliance issues if not carefully managed. Managing both the member side of AI engagement and internal adoption will be critically important.
3. The Importance of a Fintech Blueprint
A well-defined fintech blueprint has become a crucial component in today’s rapidly evolving financial landscape, particularly as technological advancements continue to reshape every aspect of banking. Many credit unions assume their fintech strategy can keep pace with the rapidly shifting environment. Many of these strategies face legacy issues, lack substance, and fail to help financial institutions deploy innovative solutions for both internal operations and member-facing enhancements.
Over the years, the industry has migrated to digital due to changing consumer preferences. Credit unions developing a fintech blueprint must have a firm grasp of their member base and how fintech partnerships might evolve. With regulatory changes and technological advancements creating constant change, credit unions have more decision points than ever before when selecting vendors.
4. Core and Digital Integration
Core modernization is no longer optional – it’s a necessity for financial institutions to achieve strategic growth. While legacy core systems once formed the foundation of credit unions, they now create barriers and challenges to innovation, flexibility and growth.
There is an increased demand for technology partners who can assist financial institutions in adopting and operating modern core banking systems. Credit unions must select partners that enable core system optimization, understand proprietary data and offer conversion support to address this growing market demand.
Implementing a phased modernization approach minimizes disruption, enabling credit unions to upgrade specific functions like payments or lending incrementally. Data integrity and security should be a top priority during migration, requiring a delicate approach to avoid operational issues and regulatory penalties. For example, a credit union might bolster cybersecurity measures to comply with GDPR and CCPA regulations.
5. Regulatory Updates
In February, the new administration effectively shut down the CFPB, leaving the fate of the organization in limbo. The CFPB stood as a staunch regulatory force in the financial sector, enforcing protection laws that impact banks and lenders. Since its establishment in 2010 under the Dodd-Frank Act, the CFPB issued billions in penalties and relief, but also faced criticism for overreach and its impact on credit availability.
For now, future rulemaking has come to a halt, and existing rules could be scaled back. This is likely to include the final ruling regarding open banking, which was issued in October 2024. Whether the CFPB remains closed or re-emerges as a new, leaner entity remains to be seen. Credit unions must continue to strike a balance between compliance and innovation to ensure that both regulatory and consumer expectations are met. Staying informed and proactive in regulatory discussions will be essential for credit union leaders during this time.
Charting a Path Forward for Credit Unions
Credit unions are at a crossroads. AI, faster payments, fintech partnerships, core modernization and regulatory uncertainty are all forces that require a strategic approach, or your institution risks falling behind.
Having strong strategic and operational plans in place that seamlessly integrate the areas we’ve discussed here while retaining a focus on member needs will decide which credit unions advance and keep pace.
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