Credit unions are amping up digital banking offerings as they target a younger audience and compete with larger banks. 

The $128 million Shoreline Hometown Credit Union, for example, selected Mahalo Banking for digital banking services, according to a recent release.

The credit union was focused on finding a vendor that offered strong fintech and third-party integrations along with continuous platform enhancements, a spokesperson told BAN. 

Shoreline is looking to expand and compete with the digital capabilities of larger institutions. Improving digital offerings will help bring in customers with a similar physical footprint, the spokesperson said.  

Manitowoc, Wis.-based Shoreline’s timeline from kickoff to go-live wit the new offerings is approximately nine months, the spokesperson said. 

Credit unions have realized that physical branches are less viable and mobile banking is “the new branch,” Jim Stickley, chief executive at Mahalo, told BAN. 

The following credit unions have also tapped Mahalo Banking since May 15: 

• $118 million North Iowa Community Credit Union; 
• $145 million Aspen Federal Credit Union; 
• $185 million Impact Credit Union;
• $252 million Midwest Community Federal Credit Union;
• $300 million Glass City Federal Credit Union;
• $323 million Fremont Federal Credit Union;  
• $450 million Glendale Area Schools Credit Union; and
• $1.3 billion Directions Credit Union.

Upping digital banking services 

Many financial institutions are apps first, Mahalo’s Stickley said, adding that credit unions are upping their digital banking game to be “able to compete with whatever that quality app out there is.” 

Digital banking offerings can help credit unions retain members, Michael Tindall, president and CEO at credit union tech provider and consortium Area Financial Services, told BAN.

“Credit unions have to be able to engage with customers digitally to keep them on your platform along with attracting the next generation of banking customers,” Tindall said. “Deposit crunch is very much alive, and credit unions are digital platforms for outreach to hold onto existing deposits and gain others.” 

By deploying a high functioning digital platform coupled with migrating to a modern core, credit unions can offer features like online account opening, modern payments and digital originations to make members’ experience better and lead them deeper into the ecosystem, Tindall said. 

Continuous innovation 

Credit unions must continuously improve their platforms and offerings to remain competitive or they risk losing clients, Stickley said. 

“Everybody is demanding P2P, FedNow and other features like its table stakes now,” he said. “Customers ask for it, and if you don’t have it, they will just move.” 

Troy, Mich.-based Mahalo Banking’s platform was built on an open infrastructure that allows it to add features from vendors that credit unions want to work with, Stickley said. 

As Mahalo Banking grows, it is paying close attention to specific feature demands, including AI-driven chatbots and online originations, he said. 

“Online originations go live at the end of this year,” Stickley said, adding that the fintech is also working on an AI-driven chatbot that will provide meaningful insights to customers about their financial health.