As the financial landscape evolves heading into 2026, Chuck Fagan, president and CEO of Velera, stresses that credit unions must focus on one essential metric: the speed at which they impact their members. In a recent discussion with Karen Webster, CEO of PYMNTS, Fagan asserted that the urgency for credit unions to respond effectively to members’ needs has never been greater. With rising costs in housing, transportation, and everyday expenses, members are less concerned about whether their credit union cares and more about how quickly it can assist them during challenging financial times.
Fagan emphasized that “speed to member impact” should be a primary key performance indicator (KPI) for credit unions. He urged leaders in the sector to place this metric at the forefront of their strategic objectives rather than relegating it to quarterly reviews or secondary analyses.
Addressing Branding Challenges
Fagan highlighted a significant hurdle that credit unions face: the term “credit union” carries negative connotations for younger generations, specifically millennials and Gen Z. These demographics, having witnessed the fallout of the 2008 financial crisis, associate the word “credit” with adverse experiences, such as foreclosures and unsustainable debt. This branding issue creates a barrier to trust that credit unions must actively work to overcome.
To regain confidence, Fagan noted that credit unions need to demonstrate their value more visibly and quickly. These institutions cannot rely solely on offering competitive rates; they must establish trust through prompt and effective actions that resonate with younger consumers.
Navigating the Affordability Crisis
The backdrop of rising living costs is reshaping members’ expectations. According to Fagan, the pressure of high housing and auto expenses dominates financial decision-making for many individuals. “The affordability aspect, and not only getting a home but being able to maintain it, is dominating how members think about their finances,” he stated. As mortgage and car payments consume larger portions of household incomes, members are increasingly focused on financial survival rather than merely accessing credit.
Fagan and Webster both pointed out that policy discussions regarding interchange fees and credit pricing often overlook the interconnected nature of the financial system. Changes in one area can have cascading effects on rewards programs, fraud protection, and overall access to credit, complicating the landscape for credit unions trying to adapt.
Transforming Financial Education
Historically, credit unions have emphasized financial education, but Fagan observed a shift in approach. Institutions that are making strides are integrating financial education into the product experience rather than treating it as a community service obligation.
He described tools that help members gain insights into their financial habits, offering visualizations of income versus expenses and demonstrating the long-term impacts of their financial choices. This proactive approach—what he termed “scenario planning”—enables credit unions to intervene before members encounter financial difficulties, distinguishing effective member support from mere damage control.
Fagan underscored that achieving true speed is not merely about rapid execution; it requires a solid foundation of accurate data. “Your clock doesn’t even start ticking until you’ve got the data right,” he stated. Rushing a product to market without clean data can lead to the illusion of speed without substantive impact.
Challenges for Smaller Credit Unions
Smaller credit unions face unique challenges in this fast-paced environment, often operating with fewer resources and limited capacity to innovate independently. Unlike larger institutions, they rely heavily on partnerships, particularly with FinTech companies, to enhance their services. Fagan pointed out the tension between FinTechs, which advocate for rapid adoption, and credit unions, which prioritize regulatory compliance and member trust.
Finding the balance between speed and safety is crucial. Credit unions must navigate this landscape carefully, ensuring that their efforts to innovate do not compromise their foundational trust with members.
Adapting to New Trends like BNPL
The rise of Buy Now Pay Later (BNPL) services exemplifies the need for credit unions to adapt quickly to evolving consumer preferences. Fagan noted that BNPL is becoming increasingly popular, especially among younger members. Velera’s approach focuses on integrating BNPL into existing credit lines rather than creating new layers of debt, which can lead to financial strain.
“This model not only provides flexibility for members but does so within a framework that has already been underwritten,” Fagan explained. Credit unions that successfully implement such services stand to not only retain younger members but also demonstrate their ability to innovate responsibly.
Looking Ahead to 2026
As credit unions prepare for the future, Fagan’s message remains clear: traditional financial metrics such as loan growth and delinquency rates are still important but do not fully capture whether institutions are keeping pace with member needs. “Speed to member impact” is becoming a critical measure of a credit union’s effectiveness in a rapidly changing environment.
In 2026, the ability to respond quickly and meaningfully to member concerns will be paramount. Credit unions must not only have a strategic plan in place but also ensure that members feel the positive effects of their actions in real-time, creating a robust and trusted relationship that fosters loyalty and engagement.
