The credit union industry is expanding, but it’s not without its worries. This article discusses how the industry has seen a number of challenges in recent years, along with credit unions’ responses to them.
The Credit Union Industry
Credit unions are more common than ever. In 2014, there were 28,000 credit unions in the United States. The industry has grown by an average of 20% each year. There is one credit union for every four people.
Credit unions are not just for the small businesses. In fact, it is becoming more and more common for credit unions to offer their services to larger businesses. These large businesses can help drive the growth that credit unions need in order to remain sustainable.
Challenges that the Industry has Recently Experienced
The credit union industry has changed dramatically over the past few years. After the Great Recession, consumers faced a new reality and they needed to restructure their financial habits. In addition, regulations regarding the industry have changed, making it more difficult for credit unions to operate effectively. There are many challenges that the industry has recently experienced including rising interest rates, increased enforcement of laws and regulations, technological innovations in the marketplace, changing consumer demographics and more.
One of the most common challenges that credit unions are currently facing is how to stay ahead in a digital-driven world. As technology changes, consumers become more comfortable using apps to compare and search for competing products and services. In order to remain competitive, credit unions must focus on where they can expand their offerings in areas of innovation like mobile banking, payments, and loyalty programs.
Credit Unions’ Responses to These Challenges
In 2008, the credit union industry experienced recession, the financial crisis and a severe downturn in liquidity. This has led to the challenges of increased competition for loan funding, changes in consumer behavior and shifting demographics.
The first credit union, the National Bank of Commerce, was established in Boston in 1864. Credit unions are businesses that provide financial services to their members at a lower cost than banks or other financial institutions. They operate on the principle of “one member, one vote,” meaning that each member has equal voting rights and no board members get paid more than any other member.
Conclusion
There are so many other benefits to credit unions as well.
Nowadays, there are many different financial institutions in the market. However, if all you want is a credit union that works for you, then you should start with the Credit Union. The Credit Union is based on principles of protection and support. They are not only focused on their members but also on the community and other causes.