Credit unions are falling behind on digital customer satisfaction

• Key insight: Credit unions have long led banks on traditional customer service metrics, but they are currently struggling to match banks’ digital service scores. The answer may be deeper collaboration with fintech partners.
• Supporting data: A 2026 American Customer Satisfaction Index study reveals that credit unions face a new challenge in declining digital customer satisfaction scores, while banks gained ground in areas such as mobile app performance, website satisfaction, account management, and access.
• Forward look: As consumers demand faster, fully digital channels, digital capability has gone from being a “plus” to a “must.”

For a long time, there has been a false assumption that credit unions must choose between profitable investments and investing in collaborations that would allegedly sacrifice short-term earnings. The assumption is that collaborative partnerships won’t deliver competitive financial benefits or efficiency.

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However, the reality is that financial performance and collaboration are not opposing forces. Rather, they can be mutually beneficial. In the past, credit unions created a nationwide shared branch network to expand credit union members’ access and strengthen their competitive position. Similarly, the industry collaboratively built indirect auto lending programs to serve their members while providing long-term growth for many CUs.

These initiatives have proven highly successful and are prime examples of productive cooperation. Just as this cooperation has proven to be a strength in developing nationwide branching or indirect lending programs, this unique attribute of credit unions has wider application today.

The rapid evolution of technology has created a new pressure to address: a widening gap in digital capabilities. Today, credit unions continue to outperform banks on in-person staff courtesy and branch efficiency, but a 2026 study by the American Customer Satisfaction Index reveals that they face a new challenge in declining digital customer satisfaction scores. At the same time, banks gained ground in areas such as mobile app performance, website satisfaction, account management and access. This indicates that while users still value the personalized service, credit unions may be falling behind on attributes consumers increasingly value in their banking provider.

Credit unions face a widening experience gap compared to both traditional banks and fintech disruptors. In addition to large IT budgets, banks have long collaborated to form pooled investment opportunities that can further their digital ambitions, borrowing a proven credit union strategy. Ironically, credit unions have been late developing this tool set. However, they now have access to new collaboration vehicles available to incorporate into their strategies to close this competitive digital gap.

Ultimately, consumers are demanding faster, fully digital channels, and this experience shapes their expectations of their financial institution. This means that digital capability has gone from being a “plus” to a “must.”

Bridging the experience gap, which matters deeply to consumers, should be on every credit union’s strategic road map.

Credit unions also face a structural challenge. While national banks have built layers of proprietary technology to improve their customers’ digital experience, credit unions have often relied on third-party providers to deliver their banking platforms. The result is a reactive posture for credit unions. Innovation becomes something delivered to them, rather than something they actively drive.

Financial institutions have all suffered from legacy technology systems. However, banks have acted quickly, making significant investments in technology either directly or through pooled investment funds to meet changing customer preferences.

Moreover, some of the digital capabilities are slower to be adopted, even more so given the fact that many credit unions are confronting servicing an aging membership base while simultaneously trying to attract new members. So, rather than seeing digital investments as a strategic priority, some credit unions have seen them as a “nice-to-have” and not given them the level of prioritization they deserve as the pace of evolving customer expectations accelerates.

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That said, this is starting to change, which explains the growing interest in the industry’s major credit union service organizations and other investment vehicles for the CUs to invest longer term in their digital capabilities while still trying to meet their near-term priorities.
You must be wondering: What strategies can credit unions take to achieve a balance between short-term member value and long-term investment?

There are several options. Arguably, the most popular path is to partner with a fintech to add digital capabilities to the CU’s existing offering. Another option, especially popular among those who have trusted technology partners, is to invest in that fintech partner to deepen that partnership. While this creates shared knowledge, it can also expose the organization to more risk if the investment fails or change the nature of the relationship from a partner to an investment potentially muddying the KPIs for the relationship.

Others have found success in shared or pooled investments or initiatives. Collaboration increases bargaining power, diversifies the risk, and broadens the number of validation points with multiple co-investors that improves the likelihood of success. This is why the conversation about collaboration is so important right now and it reinforces an existing bedrock principle for CUs.

Digital expectations are not slowing down, and the demand for personalized engagement across all channels has raised the stakes. Because of this shift in customer behavior, fragmented experiences result in frustration and ultimately attrition.

Institutions that can offer integrated experiences across accounts — including personal, business, and investment, so that members can manage and transact seamlessly — will gain a competitive digital advantage.

Credit Unions have the opportunity to go a step further and leverage their strong community engagement, positioning them as the trusted institution furthering their member’s financial life.

Credit unions don’t have to choose between their mission and their margins. By investing in technology that can deliver member value, CUs can evolve strategically while keeping members happy instead of letting the increasingly competitive market keep making pivotal decisions for them. Credit unions that embrace collaboration as a tool for innovation will be better positioned to close the experience gap and remain relevant for their members while still delivering strong financial performance.

The cooperative model has always been the credit unions’ greatest strength. The question now is whether credit unions will evolve this strength from the physical to the increasingly digital world to build upon their position of trust within their membership base and communities. It is always better to shape your future instead of having it defined for you.