Innovation has emerged as a key factor in determining whether credit unions can thrive in a competitive, rapidly evolving financial ecosystem. As expectations from consumers and small to medium-sized businesses (SMBs) shift toward digital convenience and tailored experiences, not-for-profit financial institutions face growing pressure to modernize, not just to compete with traditional banks, but to remain relevant.
The Innovation Readiness Index (IRI) — which measures the degree to which credit unions’ current and future portfolios of financial products and features align with their members’ preferences — reveals that top performers are surging ahead not just by offering more features, but by aligning closely with member expectations. These leaders have increased their consumer innovation readiness by 13% over the past two years. They are now 49% closer to delivering the complete suite of financial products and features their members want.
But it’s not just about building more — it’s about building smarter. Innovation must be targeted, data-informed and aligned with member expectations. For instance, Gen Z consumers rank digital onboarding 78% higher in importance than the average consumer. And even as more than 1 in 2 current members still prefer in-person interactions, nearly half of recent defectors say a lack of digital tools factored into their decision to leave. These contrasting signals underscore a critical truth: These institutions must balance their legacy strengths with future-facing capabilities.
Inside “The 2025 Credit Union Innovation Readiness Index: Closing Gaps, Winning Members”
- Discover how innovation and partnerships are redefining success for credit unions
- Learn how digital expectations are shifting — and where credit unions must catch up
- Explore why small businesses remain an overlooked growth opportunity
- Gain insight into why Gen Z is the next frontier for growth
Top-performing credit unions are not just keeping up — they’re pulling ahead. With innovation readiness scores as high as 73 (compared to 34 for bottom-tier performers), the Innovation Readiness Index reveals how these institutions are outpacing expectations by embedding innovation into their strategy, not just checking boxes.
About the Index
“The 2025 Credit Union Innovation Readiness Index: Closing Gaps, Winning Members,” a PYMNTS Intelligence and Velera collaboration, examines how credit unions can reap the benefits of digital innovation to gain members and reduce churn. The index is based on three surveys. First, a survey of 500 credit union executives was conducted from Feb. 6 to April 14, 2025, to learn about their current product and feature offerings as well as their plans for future innovation. A second, census-balanced survey of 15,758 U.S. consumers investigated the products and features consumers want and expect from credit unions, conducted from Feb. 28 to March 31, 2025. We also surveyed 1,996 SMBs from Feb. 26 to March 27, 2025, on the products and features they want and expect from credit unions.
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