Credit unions deciding where to put their next technology dollar are getting a different answer from consumers than they might expect.

The PYMNTS Intelligence playbook “Credit Union Innovation Readiness: The Rewards Opportunity Credit Unions Can No Longer Ignore,” produced in collaboration with Velera, found in August that 27% of consumers who want their financial institution to innovate rank loyalty or rewards programs as the feature they most want their institution to invest in over the next three years.

Rewards finished ahead of account fraud protection, cited by 23%, mobile banking capabilities at 19%, and online banking capabilities and data security innovations, each at 18%. The survey tested 25 banking features.

Small- to medium-sized businesses (SMBs) pointed in the same direction, with 24% ranking loyalty or rewards programs as their top innovation priority.

The findings broaden what counts as technology investment for a credit union. Fraud prevention, security and digital access remain important, but the consumer-facing technology agenda also includes the systems required to make rewards useful enough to affect where members spend.

Only 14% of credit union members used a loyalty or rewards program at their primary financial institution during the previous year, compared with 25% of national bank customers, according to the playbook.

Member behavior suggested the opportunity is larger than rewards participation indicated. Among consumers with multiple cards, 40% cited better incentives and rewards such as cash back as a factor in deciding which card to use, more than any of the other 17 factors tested.

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