HOW THE NEXT TWENTY YEARS WILL REDEFINE THE CREDIT UNION INDUSTRY
During the next twenty years, advances in AI and other technologies, Web3, decentralization, new forms of competition, the multi-million dollar intergenerational wealth transfer and changing consumer preferences will bring historic disruption to the credit union industry. For reasons explained below, current trends of aging membership, the inability to acquire and retain significant numbers of younger members, and the chronic reduction in the number of credit union charters, will handicap thousands of credit unions.
Credit unions cannot act alone to prepare for this evolutionary transformation; they must increase their reliance on each other and on third party resources. Complacency is not an option.
Credit Union Vulnerability
There are Two Reasons Why the Credit Union Industry Needs Younger Members and More – Not Fewer – Credit Unions. We don’t need a crystal ball to identify two significant challenges to the future of credit unions that are already in motion. Unless credit unions act now to prepare, the combination of (1) the “greatest generational wealth transfer in history” and (2) the continued loss of small and mid-size credit unions due to mergers out of necessity for enhanced products and services, will render credit unions irrelevant by 2045.
1. The “Greatest Generational Wealth Transfer in History” will not benefit credit union members. The average U.S. life expectancy for 2025 is projected to be 79 years. For the following reasons we can therefore assume that during the next 20 years the vast majority of credit union members will transfer trillions of dollars of assets to non-credit union members.
The average credit union member in North America is 53 years old, which is significantly older than the median U.S. population age of 38.5 years. This agin...