Is there a future for grass-roots community financial institutions in a world of constant digitization, scaling fintechs, explosive AI adoption, and the future tokenization of all financial assets?
That question is certainly a big, fat “Doo-Z” and seems best answered with strong tumblers of whiskey among peers at an industry conference. These specific existential talks were going crazy across hotel bars in Washington, D.C., at the credit union industry’s Governmental Affairs Conference in early March.
Orchestrated by the trade group America’s Credit Unions, the event provides thousands of credit union executives and board members with a focal point for peer engagement, industry education, and good ol’ Beltway lobbying.
Similar to the massive bank Acquire or Be Acquired Conference recently covered by Cornerstone’s Al Dominick, these major financial industry events reveal in real-time just what’s on the mind of leadership. This year, credit union executives were clearly feeling the specter of an “inflection point” big time. Picture this: In the days leading up to this event, AI firm Anthropic was blowing up across social media with frequent Claude Work updates, as were mentions of new Open AI, Google Gemini, and Perplexity Computer capabilities. In that same week, the U.S. Department of War fired Anthropic over AI principles and replaced it with Open AI, just as the department prepared to execute an attack plan against Iran powered by Palantir data intelligence. Even author Tom Clancy couldn’t get any more dramatic than the real world right now.
At this massive credit union gathering, high-profile speakers like Brene Brown spoke of courageous leadership while executives pondered these six strategic questions:
#1. How do we achieve sustainable organic growth?
Similar to banks, credit union member and deposit growth has slowed in recent years from the heydays of zero interest rates and post-covid liquidity. As consumer financial-service providers, credit unions seem to be feeling competitive heat from scaling fintechs — even more than community banks focused on business and commercial real estate lending. These executives know that both the fintechs and national banks are outgunning them when it comes to marketing and digital customer acquisition, and they’re working hard to transform marketing, data, and digital experience to catch up. Every financial institution is trying to fuel growth with new digital tools while worrying about their overall investment in acquisition costs.
#2. How do I get to play in the M&A dance?
With growth proving to be a challenge, the credit union industry is abuzz with talk of mergers. Major deals in 2025 (e.g., ENT and Wings merger of equals) have many credit unions concerned that an accelerated M&A environment presents risks of getting left out. However, unlike the efficient bid price arbiter of bank M&A, credit union mergers involve a much more irrational process consisting of social issues, governance control, and future leadership. Many credit union executives look to be concerned that their board may confuse their ability to find good deals in this unpredictable environment with the mature and efficient bank M&A marketplace.
#3. What’s real with AI now, and where do I start?
Only three years since the introduction of ChatGPT, the explosion of AI is overwhelming and exhausting many credit union executives. These leaders are seeing this technology spread at a breakneck pace, and at every turn, another tech provider is demonstrating a new product or pitching a sandbox pilot. For credit union executives, it is truly shiny object overload when their teams already have more strategic projects on their plate than organizational bandwidth. What these executives want more than anything are practical use cases that can drive a specific business outcome, and those are still much harder to find than the next cool demo.
#4. How do we put fintech in our DNA?
Credit unions, especially the 500 largest, are proving to be engaged and effective partners with new fintech companies. It’s encouraging to see young, diverse techies collaborating in meeting spaces and bars with older, more traditional executives. It’s also nice to see the amount of true development collaboration, sandbox experiments, and equity investments that credit unions are extending to put true skin in the game on innovation. While this is a great start, leaders are realizing their organizations and tech delivery processes need to change and become more agile to actually get new, integrated capabilities out the door with these fintechs.
#5. Is stablecoin a burning priority?
While stablecoin fever, ushered in by 2025’s GENIUS Act and (pending) CLARITY Act, was to be expected, it was somewhat surprising that credit unions are taking more than a wait-and-see posture. Credit union insurance/product service provider TruStage surprised us with a major announcement to introduce a credit union stablecoin (TSDA) in partnership with Block Time Financial. Industry leaders were excited, hopeful, and curious while at the same time skeptical over whether an early move like this could gain steam. Yet, as credit unions ponder what moves to make in the near-term, it’s clear they all see stablecoin and the entry of fintechs with banking powers as a clear competitive threat to be monitored.
#6. Who’s leading the charge in five years?
One final trend clearly revealed itself at the credit union industry’s most significant annual conference: A demographic cliff is about to be reached concerning leadership succession. Anecdotally, executive recruiters in the industry indicate that roughly 60% of CEOs will retire in the next five years, with many planning 2027–2028 retirements. Many are high profile and influential figures in the industry, and some even joke that getting out before the AI revolution does it heaviest damage will be a relief. This trend could spell more mergers and consolidation, but it also means succession planning and elevating/recruiting new blood to build the next chapter for credit unions must become the highest priority for boards of directors.
In 2026, banks and credit unions alike will be peering into a future filled with risks and opportunities… and clearly a hell of a lot of work to be done. The Gonzo banks and credit unions hoping to protect the grass-roots financial system are getting their hands dirty quickly as they rise to the challenge of understanding this new world.
Thanks to all my Cornerstone colleagues for their insightful perspectives on this important topic.
Steve Williams is a founder and chief executive officer of Cornerstone Advisors. Tune in to Steve’s Plugged In podcast and follow him on LinkedIn and X.