BOSTON — Artificial intelligence, mobile banking capabilities and digital onboarding tools are rapidly becoming critical factors in credit union member retention and growth, according to a new report from PYMNTS Intelligence in collaboration with Velera
The report, “Built to Lead or Losing Ground? AI, Mobile and the Member Retention Imperative for Credit Unions in 2026, ” suggests that consumers increasingly view digital capabilities as essential components of their banking relationships, creating new competitive pressures for credit unions that have historically differentiated themselves through personal service and community ties.
According to PYMNTS Intelligence and Velera, consumers most likely to leave a credit union are also among those most interested in AI-powered financial services, signaling that technology adoption is becoming a key determinant of long-term member loyalty.
The report found that credit unions deploying conversational AI, digital onboarding tools and predictive financial services are outperforming peers in member growth and asset accumulation, while institutions that have been slower to modernize are beginning to experience measurable member attrition.
Key Findings
Among the report’s key findings:
- Generation Z consumers were 73% more likely than the average consumer to express interest in AI-powered financial advice
- 76% of top-performing credit unions said they rely on external partners to provide digital onboarding and authentication capabilities
- 73% reported using third-party partners to develop new payments experiences.
- Credit unions with between $1 billion and $5 billion in assets scored higher on innovation readiness measures than institutions with more than $5 billion in assets.
What Findings Suggest
According to PYMNTS Intelligence and Velera, the findings suggest that AI is evolving beyond a tool for operational efficiency and is becoming part of the core infrastructure that shapes the member experience.
Historically, financial institutions viewed AI primarily as a way to automate processes, reduce costs and improve fraud detection. The report argues that consumers increasingly expect financial institutions to provide personalized, always-available and digitally seamless experiences, making AI a competitive necessity rather than a back-office enhancement.
The report also points to what researchers describe as a generational shift in the definition of relationship banking.
How Younger Consumers Define Relationships
While relationship banking has traditionally been associated with branch access, personal interactions and local service, younger consumers increasingly define strong financial relationships through digital convenience, personalization and responsiveness, according to PYMNTS Intelligence and Velera.
The study further concluded that partnerships with financial technology providers are becoming increasingly important as credit unions seek to expand digital capabilities.
According to the report, many institutions lack the resources and expertise required to build sophisticated AI systems internally, making partnerships with specialized technology providers essential for deploying conversational AI, onboarding solutions, fraud management systems and payment technologies.
Not All About Size
PYMNTS Intelligence and Velera noted that innovation readiness is not necessarily tied to institutional size. Instead, mid-sized credit unions appear to occupy a favorable position, with sufficient resources to invest in technology while maintaining the agility needed to deploy new solutions quickly.
Larger institutions, the report said, often face greater challenges integrating new technologies into legacy systems and complex organizational structures.
The report concludes that success in the evolving financial services landscape may depend less on the size of an institution’s technology budget and more on its ability to move quickly, leverage strategic partnerships and align digital capabilities with changing member expectations.
