Embedded Lending Will Be Key to Credit Union Loan Growth in 2025

By Corrin Maier, Vice President of Lending Member Experience, TruStageTM

Today’s loan-growth leaders in the credit union industry share a common proficiency—digital integration. New research from TruStageTM, Making Strategic Choices for Growth, reveals the strategic decisions behind the success of top-performing credit unions. Credit unions with a compound annual growth rate (CAGR) of 12.7% or higher are significantly more likely to adopt digital tools like cloud computing (60%), APIs (50%) and automated loan underwriting (27%) compared to those in the bottom third of loan growth.1

Integration is a key component of the digital transformation that has driven financial services strategies for years. It focuses on connecting software, hardware and data systems to enable seamless communication between different technologies, as well as between the technologies and the humans interacting with them.

Mastering digital integration enables credit unions to meet evolving consumer demands for speed and personalization, ultimately helping credit unions remain competitive in the pursuit of member attention and loyalty.

Digital integration propels embedded lending

For lenders, digital integration is a prerequisite to embedded lending, which could be among the most needle-moving capabilities for credit unions in 2025. As consumer expectations shift, they no longer want to interrupt their buying experience to search for a loan. Instead, they expect to be offered credit at the precise moment they need it.

Non-banks are getting very good at this, leveraging consumers’ love of personalization and immediacy to diversify and grow revenue. Airlines are offering trip protection insurance as travelers book their flights; retailers are offering buy-now-pay-later options to customers during checkout; Apple Card is offering cardholders a high-yield savings account during the application process.

Embedded lending enables credit unions to compete in this space, seamlessly incorporating their loan offers and services into non-financial platforms to get offers in front of people when they are most receptive. Not only does this supercharge the volume of prospective borrowers and loan originations for a credit union, embedded lending also simplifies access to credit, potentially accelerating financial inclusion among untapped consumer segments. Credit unions get to respond quickly to consumer credit requests, engaging digitally and sometimes with instant decisions.

Competitive differentiation hinges on digital focus and a culture of agility

The loan-growth leaders studied by TruStage primarily focus on digital outreach and personalized digital experiences rather than branch engagement.1 This is a key reason embedded lending is a rising competency for these high-performing CUs; it’s crucial for loan distribution.

Agility and adaptability were two additional traits shared by the loan-growth leaders. Nearly 60% of the credit unions in the top 1/3 tier of loan growth agreed with the statement, “My credit union has the ability to pivot and adapt quickly to change.”1

Having a culture of agility certainly helps credit unions meet fast-shifting member demands by embracing various digital integration pursuits, including embedded lending. However, to get the most from a culture of light-on-the-feet responsiveness, credit union strategists must take intentional steps to leverage agility for measurable loan growth.

Actionable steps to advance digital integration

Integrating a credit union’s loan products into the member journey at the right moment takes a multi-pronged approach. Here are four recommended steps to accelerate digital integration and embedded lending strategies.

1. Leverage member data: Member intelligence, including payment and purchase transactions and loan application and repayment behaviors, identify key points in the member journey where embedded offers are most likely to drive loan growth.

2. Partner with your marketing leader: A key strategy of loan-growth leaders, APIs are the simplest way to achieve seamless integration, which is key to building embedded lending capabilities. However, the real driver of success is collaborating closely with your marketing leader to focus on personalized, multi-touch marketing strategies throughout the consumer loan journey. By aligning efforts, you can help ensure marketing campaigns are tailored to the unique needs and preferences of members, delivering the right messages at the right times.

3. Think beyond the loan: Integrating loan applications into the consumer journey is only one of the many possibilities of embedded lending. Credit unions can enhance the borrower experience by also embedding things like debt management education and payment protection insurance into the experience. Credit unions that offer TruStage payment protection products, for instance, use their MeridianLink Portal to provide educational content directly within the loan application.

4. Supercharge marketing: High-performing credit unions ranked digital marketing as a top-three most essential capability.1 Especially when combined with dynamic content, strategic digital marketing plans may significantly boost member engagement. TruStage has found that leveraging marketing to increase member education and awareness of protection products leads to a 13% increase in loans being protected.2 This highlights the importance of building strong multi-channel experiences that deliver the right products and messages at the right times throughout a member’s application process to help improve product adoption rates. Strategic digital marketing plans may also help solidify trust by showing members that their credit union knows them, understands their preferences and is there when needed.

Maintaining a presence with modern borrowers

Credit unions looking to grow their loan portfolios in 2025 may do well to emulate the strategic choices of the industry’s loan-growth leaders. Prioritizing agility and adaptability, focusing on personalized digital experiences over branch engagement and pursuing digital integration strategies

like embedded lending enables credit unions to be there for members, precisely at their moment of need. Discover what sets top performing credit union growth leaders apart. Download our fact sheet for a high-level overview of the key strategies driving success in loans, membership, and ROA.

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1 Methodology:

        • · Ipsos fielded this online survey of credit unions with total assets of $50M+ between 2/2/2024 and 2/19/2024.
        • · 322 credit union CEOs, lending, marketing, finance, IT and HR executives participated in this study.

2 TruStage Lending Media Program – May 2023 Campaign Results: 5/1/2023 – 6/28/2023

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The views expressed here are those of the author(s) and do not necessarily represent the views of TruStage.

TruStage™ is the marketing name for TruStage Financial Group, Inc. its subsidiaries and affiliates.

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Mitigating Loan Delinquencies, Protecting Members and Strengthening Credit Union Resilience with Embedded Payment Protection Insurance

By Danielle Sesko, Director of Product Management at TruStage™

In today’s continually challenging economic landscape, more and more credit unions are becoming acutely aware of the potential impacts – and fallout – defaulting and delinquent borrowers pose. With the U.S. economy continuing to be affected by ongoing inflation, consumers’ purchasing power has been reduced, putting pressure on household budgets, and making it challenging for borrowers to repay their consumer loans. With some rate relief likely on the way, previous rate hikes aimed at controlling inflation have still increased borrowing costs considerably, further exacerbating debt management problems for members.

Consequently, the debt-to-income ratio (DTI) is also rising across all demographics, especially among lower-income earners who must allocate a larger portion of their income towards existing debt payments. Larger households are particularly impacted, facing exponential increases in debt obligations, including credit card and auto loan balances.

The statistics are stark. Recent American debt reporting has revealed that younger generations are struggling with debt more than ever, especially credit card and auto loan debt, with delinquency rates now exceeding pre-pandemic levels. According to data from Debt.org, in December 20231, the average nonmortgage debt across different age groups includes:

18-29-year-olds: $69 billion total, $12,871 average

30-39-year-olds: $1.17 trillion, $26,532 average

40-49-year-olds: $1.13 trillion $27,838 average

50-59-year-olds: $98 billion, $23,719 average

60-69-year-olds: $64 billion, $16,661 average

70 and older: $36 billion $9,827 average1

These numbers further underscore the financial struggles faced by so many of today’s consumers. Credit unions understand that their members seek loans out of necessity – to cover unexpected expenses or make significant purchases like a vehicle or home. By gaining a deeper understanding of the underlying trends, demographic variations, and economic drivers affecting their members, credit unions could more effectively implement strategies to better mitigate risks and promote financial stability.

An increasing number of credit unions are adopting strategies like payment protection insurance to shield their members from vulnerabilities and unforeseen financial hardships, such as unexpected job loss or disability that could impact their ability to repay loans. The key lies in integrating this insurance seamlessly into the lending process itself – especially within the digital channels – without adding complexity or friction for members. This approach ensures payment protection insurance is seen as the valuable solution it truly is, one that aligns with members’

primary financial goals, helping to provide them with extra protection and peace of mind in an uncertain economy.

And it is not only the members who benefit. An embedded payment protection insurance strategy also helps the credit union. Not only does it help mitigate risk for the institution’s loan portfolio, but it also enhances member experience. In an increasingly competitive lending market, offering insurance that protects members against default due to unforeseen circumstances, enables credit unions to differentiate their services, expand their member base and focus on building relationships. By showing genuine care and a clear dedication to members’ financial well-being, credit unions can not only foster long-term loyalty but also create new opportunities to grow accounts and drive revenue.

Credit unions understand the rippling impacts and effects of defaulting borrowers and the necessity for a robust loan delinquency risk mitigation strategy, one that seamlessly integrates prudent lending practices, proactive risk management, and comprehensive data aggregation. By addressing the needs of both the institution and its members alike, an embedded payment protection insurance strategy may provide the financial security that supports members’ primary financial goals while also helping credit unions achieve their business objectives, ensuring a more sustainable and secure environment for everyone.


Danielle Sesko is the Director of Product Management at TruStage. Danielle has been with TruStage for over 10 years and has held a variety of roles ranging from financial leadership to transformation and product development. Prior to joining TruStage, Danielle spent her career in financial services and Mergers and Acquisitions. Danielle currently leads TruStage’s Digital Lending Insurance initiative which is focused on creating new digitally native products for new markets.  1Debt.org, Demographics of Debt, December 2023

The views expressed here are those of the author(s) and do not necessarily represent the views of TruStage.

TruStageTM Payment Guard Insurance is underwritten by CUMIS Specialty Insurance Company, Inc. CUMIS Specialty Insurance Company, our excess and surplus lines carrier, underwrites coverages that are not available in the admitted market. Product and features may vary and not be available in all states. Certain eligibility requirements, conditions, and exclusions may apply. Please refer to the Group Policy for a full explanation of the terms. The insurance offered is not a deposit, and is not federally insured, sold or guaranteed by any financial institution. Corporate Headquarters 5910 Mineral Point Road, Madison, WI 53705.

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