5 Ways Credit Unions Can Innovate Their Digital Journey in 2026
Credit unions face rising competition from fintechs and evolving expectations from Gen Z and Millennial members. To stay relevant, CUs must embrace digital innovation, demographic insights, automation, personalized video, and AI-powered lending tools. These five strategies help credit unions strengthen member engagement, expand access, and avoid technological stagnation.
The final Blockbuster store in America didn't really close, it turned into a museum. At its peak in 2004, Blockbuster operated 9,000 stores worldwide. By 2014, only one remained. Once Netflix ushered in the age of digital streaming, video rental chains couldn't keep up, and the last Blockbuster location kept its doors open not for business, but for tourists looking to revisit the past.
Here's the Blockbuster lesson for credit unions: no brand is too big to fail.
Believing that digital evolution isn't essential is a limiting mindset. Innovating the digital banking experience isn't optional. Credit unions that want to avoid extinction (and who doesn’t?) must prioritize digital banking, especially for younger members.
Defining Credit Union Innovation: What It Is – and Isn't
Next-generation members expect speed, transparency, and personalization. But how can CUs deliver on these expectations without chasing every shiny tool?
Allied’s Senior Vice President of Strategic Initiatives Charlie Peterson says it's all about innovation, defining it as "giving a vision momentum."
Innovation isn't:
• Acquiring new tools simply because the competition has them
• Chasing technology trends with no clear value-add
• Abandoning the credit union mission
And perhaps most importantly, innovation isn't perfection — it's progress.
So, how can you acquire and retain Gen Z and Millennial members? Let's cut through the buzzwords and explore smart, practical strategies to innovate your CU's digital journey.
5 Smart Practices to Innovate Your CU's Digital Journey
1. Track Member Demographics with Intention
The Reality: According to CUNA's 2024 Member Profile, the average CU member is 50 years old. What is your credit union's average member age? This is more than a metric, it’s a key predictor of future growth.
The Action: If you want to attract and retain emerging members, intentionally adjust the demographics of decision-makers to include younger perspectives. The goal isn't just age diversity; maintaining a top-three position as a financial institution of choice among your Gen Z and Millennial populations is ideal.
2. Grow Your Digital Footprint Through Purposeful Investment
The Challenge: CUs aren't just competing against banks and fintechs, you're vying for attention in an increasingly crowded digital landscape. Standing out requires strategic automation and personalization.
The Opportunity: Automating workflows to maximize human capital will be a major growth driver this year.¹ And AI adoption isn't about replacing humans, it's about freeing staff from repetitive tasks so they can build deeper member relationships.
If you've automated one area only to “rinse and repeat” in another, you aren't alone. The automation goalpost may keep moving, but the key is steady progress. Each year, take one more step toward replacing manual, error-prone processes with systems that enhance efficiency and elevate member experience.
3. Meet Members in Their Digital Neighborhood
The Paradox: Gen Z and Millennials show strong preference for fintechs, and they simply aren't walking into branches. They live, shop, and bank online. Yet despite their tech-native lifestyles, younger members experience significant email fatigue with overfilled inboxes.
Interestingly, younger generations often respond better to physical mailers — a longtime marketing tool of CUs — than to email.
The Strategy: If you want to attract Gen Z, you have to show up where they are: in mobile apps, on social media platforms, and in their physical mailboxes, not just their overfilled and overlooked inboxes.
4. Deep Member Understanding as a Competitive Advantage
The Balance: Regardless of age, your members want to feel known, not watched. CUs must strike a balance between understanding member preferences and meeting needs without crossing the line into intrusiveness.
The Video Imperative: More than three-quarters of all internet traffic is video-based — making video marketing essential to any digital strategy.
The AI Solution: AI-powered video creation tools eliminate the need for voice actors, design teams, or heavy production budgets, allowing CUs to deliver personalized, high-quality content that resonates. Imagine sending a member a personalized video message celebrating their 5-year anniversary, explaining new savings products, or walking them through loan options — all at scale.
5. Use AI to Win (and Keep) Auto Loan Relationships
The Opportunity: Indirect auto loans are a low-friction, high-impact pathway for membership onboarding — yet most CUs miss the mark.
The Problem: Traditional credit scoring misses applicants with thin credit files or non-traditional financial histories — precisely the demographic profile of many younger members.
The Solution: Move beyond outdated credit modeling and invest in AI-powered decisioning platforms that expand credit access, identify membership opportunities, and help your CU compete more effectively in the auto lending landscape.
Final Thoughts: Giving Your Vision Velocity
Blockbuster's legacy is a reminder that strong brands aren't immune to disruption. The difference between relevance and irrelevance is the ability to give velocity to a vision.
Credit unions that embrace smart digital investment, demographic insights, and member-centric technology will avoid the fate of obsolescence.
Innovation isn't optional — but it is entirely achievable. It requires small steps in the right direction and locking arms with strategic partners who make it their mission to stay one step ahead on the digital transformation path.
The question isn't whether to innovate, it's whether you'll start today.