Credit unions are having a moment, but they’re at serious risk of wasting it. After a decade of slowly gaining market share on banks over the last decade, fueled by several factors—shifting U.S. demographics (with millennials and Gen Z now being the first and second largest population segments); as well as their inherent ability to offer more competitive rates for the products these segments care most about, like car and home loans and credit cards—credit unions now have the wind at their backs.

With interest rates expected to fall further, credit unions are extremely well-positioned to experience a further near-term rise in loan volume. But this “moment” is likely to be short-lived unless credit unions can overcome the enduring perception that they’re just not as convenient and technologically advanced as larger banks. Here are my top suggestions for credit unions looking to capitalize on current market conditions.

Lean into what already makes you great

For many credit unions, competitive advantage stems from their excellence in nurturing individuals’ financial health and in doing so, elevating the overall well-being of the local community. The link between financial wellness and mental health is well-documented, so promoting financial wellness among individual customers doesn’t just engender their loyalty. It also reinforces your commitment to the overall community, helping reduce poverty, strain on public resources, crime rates, and more.

For these reasons, credit unions should consider offering a variety of financial wellness solutions and apps within their primary offering. For instance, budgeting and tracking, automated savings and investing, debt reduction, financial literacy education, student loan repayment, and credit score monitoring. With an estimated 92 percent of millennials and Gen Z hoping to improve their financial literacy and manage their money, offering a breadth of these services can attract new customers.

Invest in the digital banking experience

Years ago, highly personalized, in-person interactions may have been sufficient for swaying customers towards credit unions over banks. But our increased reliance on digital channels to manage key facets of our lives—from grocery shopping, to paying bills, to accessing entertainment—is changing that. With approximately 76 percent of banking transactions occurring through mobile apps or websites, consumers are much less likely to make allowances for smaller institutions if their digital experience leaves something to be desired.

This means customers expect to be able to do the same things on a credit union’s app that they can do with larger financial services providers, such as making instant payments and applying for loans. depositing checks and more. Digital natives in particular (younger millennials and Gen Z)  demand an online banking experience that mirrors the speed, intuition, and personalization of top-tier technology platforms like Apple, Amazon, or Spotify. Moreover, this demographic is much more likely to switch providers if they deem their current platform is falling short.

Most credit unions can deliver the digital banking “table stakes.” But to effectively compete, they must be able to extend their platforms seamlessly, enabling fast, reliable, and frictionless experiences through the “last mile,” and without disrupting the core.  The good news is you don’t need to hire a huge developer team—you can leverage modern digital banking platforms and fintech partner ecosystems to add just about any feature as a seamless, extensible component of your primary app, quickly and securely.

Deliver contextual, human-feeling interactions across the continuum of touchpoints

Here’s the insight most credit unions are missing: AI isn’t primarily a cost play of efficiency story. It’s a primacy play. The institution that knows you well enough to tell you something useful before you ask—that’s the one that becomes your financial home base. Credit unions have the relationship depth to win this game. What they need is the infrastructure to act on it in real time.

Proactive insights create a massive “stickiness” that ultimately fosters primacy—when an institution emerges as the customer’s primary, “top-of-wallet” financial services provider, serving as their main hub for deposits, payments, and, increasingly, digital engagement. Primacy positions financial services firms to assume a greater share of wallet, and I believe that credit unions that effectively use AI  will get to primacy faster.

In spite of the increased reliance on digital channels, in-person interactions are still vitally important, with a sizable portion of all customer demographics still preferring to go to a branch to resolve issues. Here, credit unions have an opportunity to showcase the exemplary in-branch and cross-channel engagement that has long been a hallmark of their industry.

Real-time data gleaned from online interactions and AI-driven prompts give in-branch workers the vital knowledge needed to support integrated, all-encompassing interactions. With their long-standing focus on cross-channel excellence, credit unions are uniquely poised to demonstrate how intelligent, anticipatory customer interactions do not need to exist in a digital silo, but rather can successfully bridge their online and offline channels.

Take advantage of the moment

Currently, credit unions have an incredible opportunity at their fingertips. By promoting financial wellness at both the individual and community level, extending and enriching the digital banking experience quickly and securely, and harnessing the power of AI across all channels, credit unions can position themselves to capture even greater consumer market share in the years to come.