THE CORE PROCESSING INDUSTRY LEADERS FORUM ™

Small to medium-sized credit unions are facing a myriad of challenges in today's rapidly evolving financial landscape. These institutions, which have long been valued for their personalized service and community focus, must now navigate a complex web of regulatory requirements, technological advancements, and competitive pressures. Among the critical issues they face are the need for digital transformation, compliance, evolving cybersecurity threats, and growing demands for operational efficiency.

One of the most pressing challenges an increasingly digital-first member base. Credit union members now expect seamless online banking experiences similar to those offered by larger banks, including mobile apps, 24/7 service, and digital transaction processing[1]. This shift requires significant investments in technology and staff training, which can be daunting for smaller institutions with limited resources. Additionally, the rise of artificial intelligence (AI) and automation is becoming increasingly important to streamline operations and enhance member experiences[1].

Regulatory compliance is another significant hurdle. The financial sector is heavily regulated, and credit unions must stay compliant with ever-changing local, federal, and international regulations[1]. This requires substantial resources, quality data, and ongoing training. The National Credit Union Administration (NCUA) has increased scrutiny on fees such as overdraft and non-sufficient funds (NSF) fees, adding to the compliance burden[2]. Credit unions must ensure they manage these fees effectively to avoid reputational and legal risks[2].

Cybersecurity threats are an ever-present and growing concern. Smaller credit unions may present a more attractive target for cybercriminals due to their limited IT resources[1]. The NCUA has reported a 25% increase in cybersecurity incidents, highlighting the need for robust security measures to protect member data and maintain trust[1].

Operational efficiency is crucial for credit unions to remain competitive. Rising labor costs, fluctuating staffing needs, and the slow recovery of foot traffic at physical branches post-pandemic are significant challenges[3]. Credit unions must rethink their operations and member service models to increase efficiency while maintaining high service levels[3].

Creating products that can satisfy the changing banking needs of generations, including the typical credit union member as well as Gen Z and Gen Alpha, is crucial for building a sustainable member base. By catering to the diverse needs and preferences of different age groups, credit unions can ensure long-term growth and member loyalty, while also attracting younger generations who will drive future success.

Portico from Fiserv is a comprehensive core processing solution designed to address these challenges and drive efficiencies for credit unions. Portico offers a modern, member-centric platform that enables credit unions to deliver both digital and in-person services seamlessly[4]. With its open architecture and fast implementation, Portico helps credit unions create new opportunities, drive revenue, and achieve operational efficiencies[4].

One of the key benefits of Portico is its ability to streamline branch operations. By integrating with partners like MessagePay, Portico enables credit unions to reduce call center volume and reconcile phone payments efficiently[5]. MessagePay allows members to make payments via text messages or simple links, reducing the need for physical visits to branches or lengthy phone calls[5]. This not only enhances member convenience but also reduces call volumes and improves overall operational efficiency[5].

Portico also leverages in-branch technology to cover multiple tellers, further enhancing branch efficiency. The integration with Kinective's Teller Cash Recycler (TCR) programs automates the cash cycle by accepting, counting, storing, and dispensing notes[6]. TCRs authenticate notes, perform vault transactions, and provide automated cash audits, significantly reducing the time tellers spend on cash handling[6]. This allows tellers to focus more on member interactions and cross-selling products, ultimately improving member satisfaction and driving revenue growth[6].

Moreover, Portico's robust compliance features help credit unions manage regulatory requirements effectively. The platform ensures consistency, security, and compliance by leveraging verified data sources and integrating with AI-driven solutions[1]. This reduces the risk of compliance issues and allows credit unions to focus on serving their members better.

In conclusion, small to medium-sized credit unions face numerous challenges in today's financial landscape, from digital transformation and regulatory compliance to cybersecurity threats and operational efficiency. Portico from Fiserv offers a comprehensive solution that addresses these challenges by driving efficiencies, enhancing member experiences, and ensuring compliance. By leveraging technologies like MessagePay and Kinective's Teller Cash Recycler programs, Portico helps credit unions streamline operations, reduce costs, and provide superior service to their members. As the financial landscape continues to evolve, credit unions that adopt innovative solutions like Portico will be well-positioned to thrive and serve their communities effectively.

References

[1] Top 10 Challenges Facing Credit Unions - Engageware

[2] NCUA Increases Scrutiny of Overdraft, NSF, and RDI Fees

[3] 4 solutions to increase credit union efficiency - CUInsight

[4] Portico for Credit Unions | Fiserv

[5] CAPS SKO Presentation CUS 2025 0221

[6] Kinective: Benefits of Teller Cash Recyclers Integrated