How Credit Unions Can Tackle Macroeconomic Trends to Win in 2023

Our research into the top macroeconomic trends that credit unions will face in 2023 revealed an interesting mix of challenges: 

1. Liquidity: CUNA forecasts the loan-to-share ratio will rise to 82% by December 2023. Credit unions will struggle with liquidity as loan-to-share ratios continue to increase and loan growth continues to outpace deposits. 
2. Delinquency Rates: TransUnion forecasts serious credit card delinquencies to rise to 2.6% at the end of 2023 from 2.10% at the conclusion of 2022. Unsecured personal loan delinquency rates are expected to increase from 4.1% to 4.3% in the same timeframe. These are levels not seen since 2010 and, at the same time, demand for most lending products will remain high relative to pre-pandemic levels.
3. Reaching Gen Z: Credit unions have traditionally competed on convenience, price, and service. But today’s Gen Z and Millennial consumers are looking for more. Approximately three-quarters of credit union deposits are held by members who are of Baby Boomer age or older, according to a 2022 Raddon Performance Analytics program analysis. 
4. Competitive Pressures on Fees: Many of the nation’s largest banks have reduced or eliminated NSF fees – historically a key revenue source for financial institutions of all kinds. Credit unions now face unprecedented competitive pressure to eliminate these fees.

So how can credit unions win in 2023? MX sees a few opportunities on the horizon. Credit unions play a vital role in the economy and local communities. 

• Create personalized, digital experiences rooted in financial health and well-being to drive financial strength and inclusion.
• Facilitate technology partnerships to help overcome legacy infrastructure challenges and barriers.
• Enable secure, standardized, consumer-permissioned data sharing and embrace an open finance infrastructure. 
• Offer higher deposit account rates to differentiate, retain, and grow.