Elevating Member Experience | Accelerating Digitization in Credit Unions for a Gen Z Future

AUTHORS
Manan Gauba, Chris Howell

This Whitepaper explores how artificial intelligence can realistically enhance both the speed and quality of the software engineering lifecycle. It presents a compelling case for where AI can deliver meaningful, scalable value, and offers actionable strategies and a practical roadmap for technology leaders—such as CIOs and CTOs—to move beyond surface-level improvements and drive sustained impact across their organizations.

Executive Summary

Credit unions continue to demonstrate resilience and purpose, growing their assets under management while serving member segments often overlooked by traditional banks. They play a critical role in promoting financial inclusion and community well-being.

However, changing expectations, especially among Gen Z, are reshaping the competitive landscape, with digital convenience now a decisive factor in member choice. Fortunately, advances in disruptive technologies are creating practical opportunities for credit unions to modernize, digitize their businesses, and elevate their member experiences. Such innovations can help improve acquisition, strengthen retention, and ultimately extend the credit union mission to a new generation of members. However, the path to transformation is often complicated by constrained budgets and limited internal technology expertise.

This white paper explores how Temenos and Myridius have partnered to address these challenges, offering a streamlined approach that makes digital transformation more viable and achievable for credit unions. Together, we outline how the right combination of technology and expertise can enable credit unions to remain competitive, deepen member engagement, and secure long-term growth in the digital era.

Despite their impact on US banking, credit unions face increasing pressure to adapt to a fiercely competitive and tech-focused landscape 

Credit unions service over $2.3T in assets today, with 434 credit unions in the $1-10B asset range and 286 credit unions in the $500M- $1B range, together contributing almost 40% of the assets. Credit unions’ charter allows them to stand differentiated by offering a personalized, well-curated, almost white-glove member experience compared to traditional banks. Over the past few years, they have retained their market share, but their share of new account openings seems to be falling. Their combined scale and reach presents a compelling case for digital transformation to consistently service a large member base. 

With the pace of digitization, both regional and large banks are gaining ground in offering a far improved omni-channel experience to their customers today. They are also able to invest more rapidly in technology to be able to offer hyper-personalization at scale to their customers. 

However, the advent of AI can be a great leveler and improve competitiveness of Credit unions as it promises to serve a dual purpose- derive cost efficiencies, while also improving member engagement and retention.

Banks are performing better with the younger generation than credit unions are
Source: McKinsey Consumer Financial Life Survey

Credit unions must effectively tailor their offerings to attract and serve diverse demographic segments 

Top 5 preferences across generational segments 

Industry analysts point to Credit unions losing out on enrolling younger generation due to less-than-optimal digital experiences, across onboarding, engagement and enablement. 

Legacy technologies are a significant barrier, and in some cases, a complete impediment to efforts to improve the customer experience.

Larger banks are today spending 100 times the amount spent by a typical $1B AUM credit union. And since budgets and skill availability are limited for a credit union, it is imperative for them to be smart about it.

• Pick a leaf out of digital banks’ playbook and go after specific sub-segments with a high touch approach. This needs tailored customer journeys to offer bespoke community/member experience
• Decide what to build and where to tap into the power of ecosystems and generate quicker ROI through Fintechs
• Quick success with specific business cases on user experience, reduced churn and higher enrollment to enable core system transformation which can be a costly multi-year program

Digital account opening and onboarding present an accelerated transformative opportunity

The digital account opening and onboarding use case represents an accelerated transformative opportunity for credit unions under $10B in assets to enhance competitiveness, drive growth, and better serve their members. It is a cornerstone capability that directly addresses these modern business goals.

A digitally enabled credit union can offer the following use cases (and more) to the Gen Z members-

• Personalized digital banking experience
• Financial wellness and Financial health monitoring
• Instant payments and P2P transfers
• Automated Savings and Investment Tools
• Subscription and Expense Management
• Community engagement and Peer banking…

Beyond these use cases, digitization also opens the door to unlocking the power of Agentic AI.

Difference in percentage points between the share of bank customers and the share of credit union members who prefer using digital channels for sales. Source: Finalta by McKinsey; McKinsey Retail Banking Consumer Survey 2023 (n=1,460)

Agentic AI infusion can significantly enhance and streamline the digital account opening and onboarding process for credit unions

Agentic AI infusion can significantly enhance and streamline the digital account opening and onboarding process for credit unions

Critical considerations for a Digital account opening and onboarding program

• Rapid time to market benefits
  Platform to enable building digital customer acquisition initiatives in months, not years, reducing IT burden and providing the agility for continuous improvements. This also includes ready integrations with typical 3rd party platforms.
• Outstanding customer experience promise
  Able to deliver seamless omnichannel experiences that reduce abandonment rates and shorten onboarding cycles. The architecture needs to support both digital-first and hybrid experiences, allowing CUs to maintain their personalized service approach while offering modern convenience.
• Integration and scalability
  Works as a core-independent architecture with any back-office system, eliminating the need for costly infrastructure changes. This helps maximize existing technology investments and limited resources.
• Analytics and optimization
  The platform needs to offer built-in analytics for every transaction, enabling credit unions to identify friction points and continuously optimize the member experience. This data-driven approach supports the continuous improvement mindset essential for competitive differentiation.

A case in point – Frictionless Onboarding with TJM and Prove

For a <$5B AUM financial institution, Myridius used the Temenos Journey Manager (TJM) platform on AWS and a suite of fintech services including Prove, the global leader in digital identity verification and authentication, to build a Digital Onboarding and Account Opening Experience. Prove’s mobile verification and prefill capabilities were integrated with TJM to enable secure, real-time identity checks and reduce fraud, creating a unified, multi-product onboarding journey supported by optimized workflows, information architecture, and interface design.

• 2-minute account opening with 63% completion for personal accounts
• The average time to open a new  business account was reduced from
  2 weeks to just 22 minutes

Seeing repeatability, Myridius has invested in building a validation and verification adapter with Prove to integrate seamlessly with TJM. With this and along with several other similar pre-built integrations and our proprietary plugins/component kits, we are accelerating implementation cycles today by 30-40% while delivering predictable business outcomes like mentioned above.

Approach and implementation pathways   

A Credit union can go with a tiered implementation approach based on their own digitization journey context. For example, if starting afresh, it is best to begin with high-impact, low-risk implementations such as basic checking account opening, then expand to savings products, certificates, and eventually commercial accounts. This approach minimizes disruption while building internal confidence and expertise.

Based on our extensive experience with multiple credit unions, we are seeing your peer group choosing from among the following tiered solution options or a combination of the same.

1. Foundational
   Core digital account opening for checking, savings, and basic deposit products with
   automated identity verification, e-signatures, and instant funding capabilities 
2. Growth
   Enhanced cross-selling capabilities, multi-product enrollment, business account opening,
   and advanced analytics
3. Enterprise
   Full commercial lending integration, syndication support, advanced risk management, and comprehensive member journey optimization

Implementation Success Factors   

• Integration with Existing Systems
  Ensure seamless integration with core banking systems, CRM platforms, and other member-facing technologies. Important to have an open API architecture to support integration with best-in-class technologies
• Continuous Optimization
  Leverage pre-built analytics to continuously analyze and improve the member journey. Regular A/B testing, conversion rate optimization, and friction point identification should be standard practices
• Compliance and Risk Management
  Implement robust KYC, AML, and fraud prevention measures from day 1
• Regulatory Adaptation
  Credit unions face evolving regulatory requirements, particularly around data privacy (GDPR compliance), operational resilience (DORA), etc. There is need to be mindful of the product development and deployment cycles and back-up options.

Critical Factors

1. Right vendor-partner
   Right partner can bring along the apt cohort of ecosystem partners suitable in CU context along with pre-built integrations to reduce typical integration complexities
2. Cost predictability
   Important to do a thorough feature planning at the start and stick to OOTB features as much as possible as expensive customizations can quickly escalate project costs and increase timelines
3. Cultural and organizational resistance
   Strong management commitment reduces employee resistance to digital transformation. Also, important to budget for change management complexity and skill development needs

Credits