By Corrin Maier, Vice President of Lending Member Experience, TruStageTM
Today’s loan-growth leaders in the credit union industry share a common proficiency—digital integration. New research from TruStageTM, Making Strategic Choices for Growth, reveals the strategic decisions behind the success of top-performing credit unions. Credit unions with a compound annual growth rate (CAGR) of 12.7% or higher are significantly more likely to adopt digital tools like cloud computing (60%), APIs (50%) and automated loan underwriting (27%) compared to those in the bottom third of loan growth.1
Integration is a key component of the digital transformation that has driven financial services strategies for years. It focuses on connecting software, hardware and data systems to enable seamless communication between different technologies, as well as between the technologies and the humans interacting with them.
Mastering digital integration enables credit unions to meet evolving consumer demands for speed and personalization, ultimately helping credit unions remain competitive in the pursuit of member attention and loyalty.
Digital integration propels embedded lending
For lenders, digital integration is a prerequisite to embedded lending, which could be among the most needle-moving capabilities for credit unions in 2025. As consumer expectations shift, they no longer want to interrupt their buying experience to search for a loan. Instead, they expect to be offered credit at the precise moment they need it.
Non-banks are getting very good at this, leveraging consumers’ love of personalization and immediacy to diversify and grow revenue. Airlines are offering trip protection insurance as travelers book their flights; retailers are offering buy-now-pay-later options to customers during checkout; Apple Card is offering cardholders a high-yield savings account during the application process.
Embedded lending enables credit unions to compete in this space, seamlessly incorporating their loan offers and services into non-financial platforms to get offers in front of people when they are most receptive. Not only does this supercharge the volume of prospective borrowers and loan originations for a credit union, embedded lending also simplifies access to credit, potentially accelerating financial inclusion among untapped consumer segments. Credit unions get to respond quickly to consumer credit requests, engaging digitally and sometimes with instant decisions.
Competitive differentiation hinges on digital focus and a culture of agility
The loan-growth leaders studied by TruStage primarily focus on digital outreach and personalized digital experiences rather than branch engagement.1 This is a key reason embedded lending is a rising competency for these high-performing CUs; it’s crucial for loan distribution.
Agility and adaptability were two additional traits shared by the loan-growth leaders. Nearly 60% of the credit unions in the top 1/3 tier of loan growth agreed with the statement, “My credit union has the ability to pivot and adapt quickly to change.”1
Having a culture of agility certainly helps credit unions meet fast-shifting member demands by embracing various digital integration pursuits, including embedded lending. However, to get the most from a culture of light-on-the-feet responsiveness, credit union strategists must take intentional steps to leverage agility for measurable loan growth.
Actionable steps to advance digital integration
Integrating a credit union’s loan products into the member journey at the right moment takes a multi-pronged approach. Here are four recommended steps to accelerate digital integration and embedded lending strategies.
Maintaining a presence with modern borrowers
Credit unions looking to grow their loan portfolios in 2025 may do well to emulate the strategic choices of the industry’s loan-growth leaders. Prioritizing agility and adaptability, focusing on personalized digital experiences over branch engagement and pursuing digital integration strategies like embedded lending enables credit unions to be there for members, precisely at their moment of need.
Discover what sets top performing credit union growth leaders apart. Download our fact sheet for a high-level overview of the key strategies driving success in loans, membership, and ROA.
1 Methodology:
2 TruStage Lending Media Program – May 2023 Campaign Results: 5/1/2023 – 6/28/2023
The views expressed here are those of the author(s) and do not necessarily represent the views of TruStage.