BOSTON — A new report on credit union innovationhas found that branches still matter, especially when it comes to retaining loyal members.
That finding is among the key takeaways from The Omnichannel Imperative: Why Credit Unions Need Both Digital and Physical to Thrive, a study released by PYMNTS Intelligence and sponsored by Velera.
The report examines how top-performing credit unions balance digital expansion with community-based service, concluding that future growth requires investment in both. While tools such as digital onboarding, mobile card issuance and Gen Z-focused apps dominate headlines, the study highlights persistent demand for in-person banking.
“Credit unions, long distinguished by a relationship-first approach, are positioned to succeed in this hybrid environment — but only if they resist going fully digital,” the report said.
The Data Points
• 51% of members, including consumers and small businesses, prefer face-to-face service, underscoring the importance of branches.
• 65% of baby boomers visit their credit union in person, while 53% also use the institution’s website — making them the most omnichannel-engaged group.
• 70% of frequent ATM users said cash withdrawals were their primary reason, reflecting ongoing demand for self-service tools that connect digital and physical banking.
The ‘Phygital’ Future
The study argues that even with rising digital expectations from millennials, Gen Z and small and mid-sized businesses, the future is “phygital” — a blend of physical and digital.
Navy Federal Credit Union illustrated that in March when it opened a branch at Fort Irwin to serve 10,000 members of a military community, despite nationwide branch closures. “The move reflects a recognition that trust, accessibility and loyalty are often built in person, particularly in underserved areas,” the report noted.
Policy shifts could also expand branch access. In North Carolina, proposed legislation would allow credit unions to serve rural residents who live more than eight miles from a bank. If passed, the measure could expand eligibility and spur investment in so-called “banking deserts,” the report said.
Importance of Digital
Digital offerings remain crucial. Among small businesses that switched institutions, 68% said they preferred digital onboarding. Gen Z is 78% more likely than average consumers to expect features such as digital onboarding and QR code payments. Top-performing credit unions are 49% closer to offering a full digital suite than peers, the study said, but success lies in integrating digital and branch service.
“Credit unions that blend digital convenience with the human touch of branch access are not only meeting today’s expectations across every generation but also setting the standard for trust, accessibility and long-term loyalty,” Amy Evans, Velera senior vice president, said in a statement.
