Recapping 2024’s BIGgest Credit Union/Fintech Stories

Our final BIGCast of 2024 featured a roundtable discussion of the year’s stories we deemed most impactful for credit unions. Here’s a summary for those of you who prefer the printed word- taking liberties as the author of this piece, I’ve added a pair of bonus picks.

As we predicted on our January 2024 podcast, the US economy navigated what by all traditional measures would be deemed a “soft landing.” Don’t tell that to the majority of Americans, however. Faced with higher prices, higher debt levels and higher borrowing costs, they assessed the economy as weak. This doesn’t bode well for an inevitable eventual downturn of greater magnitude.

Anne Legg highlighted Buy Now Pay Later’s significant inroads into the credit union space, emphasizing that it’s no longer just a solution for the young. She strongly encourages CUs to take a close look at their ACH/debit transaction data, which will likely reveal more such activity than leaders realize. Members are signaling a clear product need and if they’ve already maxed out traditional credit lines, perhaps a delinquency risk as well.

John Janclaes pointed to data, created in collaboration with the Filene Research Institute, showing that as many as 44% of Americans are now engaged in “side hustles.” Individuals have different motivations for such activities (supplemental income, testing out a potential full time idea, “labors of love”). Once again, data holds the key- querying on deposit inflows can identify opportunities to support these members in ways tailored to their unique situation.

John Best raised the ransomware flag, warning that no credit union is safe if a well-run shop like Patelco can fall prey. Whereas hackers used to try to breach a CU’s proverbial 10-foot protective wall by building an 11-foot ladder, Best worries that AI will equip the bad guys to arrive with a hundred ladders. John Janclaes further counsels that CUs need to shore up their crisis communications to be prepared if and when such incidents occur.

In another type of sneak attack, John Best referred to the Interchange Fee Prohibition Act on our CU Town Hall as “the worst IPA you ever tasted.” It arrived as a last-minute attachment to must-pass Illinois budget legislation, delivering big box retailers a longshot win they had sought for years. The ill-conceived law is currently tied up in the courts, but emboldened retailers quickly extended their campaign to other states (starting with Pennsylvania) despite a growing realization it’s un-implementable. Find more details in our conversation with Tom Kane and Ashley Sharpe of the Illinois Credit Union League.

February’s announced Capital One/Discover merger served as a bellwether for the merger and acquisition climate, with the combination stalled by regulators but by year-end looking increasingly likely to pass (Discover stock jumped 20% the day after the election). John Best jokingly floated the idea of a “Merger Tinder” app for banks and CUs, while John Janclaes observed smaller FIs’ pursuit of the scale necessary to compete- particularly in funding necessary tech investments.

At an October meeting of the BRICs countries (Brazil, Russia, India, China) Vladimir Putin proposed the creation of an “independent payment system” as a means of circumventing “unilateral economic sanctions,” such as those imposed by the international community limiting the use of the SWIFT network by some of the BRICs members (which also include Iran). The group agreed to a feasibility study- it’s a long-term play, and something of a moonshot, but is a byproduct of the push against “de-banking” that’s gained traction in some circles.

And oh yeah, Bitcoin’s price cracked the $100,000 threshold, exceeding even our panel’s rosiest projections. But we’ll let John Best gloat about that- and offer his prediction for 2025 performance- on next week’s BIGCast.