By Audrey Denise B. Cachuela

Many Canadians still default to the big banks simply because credit unions are not top of mind. For younger consumers, especially, there is often limited awareness around what a credit union actually is, how it works, or how much the model has evolved over the past several years. Today’s credit unions offer digital banking, competitive financial products, and member-first services that look very different from the outdated assumptions many people still carry.

Innovation Federal Credit Union is changing that narrative. The Saskatchewan-based institution offers digital banking across Canada (outside Quebec), with online account opening, mobile banking, no-fee everyday accounts, and digital mortgage services.

The biggest challenge facing many credit unions today isn’t competing with banks. It is making people aware that credit unions are even an option, and showing how they often deliver more value, flexibility, and community impact than the major banks.

A Large Number of Young Canadians Do Not Know They Can Join a Credit Union

The awareness gap around credit unions was highlighted by AlgoPear’s research, which found that 30% of Gen Z consumers and 21% of millennials did not know they were eligible to join a credit union. (Source: AlgoPear, “The Credit Union Awareness Gap,” 2024) That number says a lot about how invisible credit unions have become to younger consumers, especially in major cities.

In the same report they pointed out that many younger customers still default to traditional banks because they associate them with convenience and stronger digital experiences. (Source: AlgoPear, “The Credit Union Awareness Gap,” 2024)

People inside the industry are aware of the problem too. Innovation Federal Credit Union executives speak openly about how credit unions lost visibility with younger generations when digital banking first accelerated. Vishnu Singh, the company’s VP of Growth & Member Experience, explained that many people simply understand the word “bank” more clearly than “credit union.”

That matters because first financial habits tend to stick. Students leave home, then open a bank account near campus, and often stay with the same institution for years. Meanwhile, credit unions are left trying to reintroduce themselves to people who barely encountered them growing up.

The “Credit Unions Are Outdated” Assumption Does Not Hold Up

Some people still picture credit unions as branch-heavy institutions built for small communities. That image is behind the times.

Innovation Federal Credit Union allows customers to open accounts online without visiting a branch. Members can transfer money digitally, pay bills online, manage accounts through mobile banking, and complete most daily banking tasks remotely. The company has also focused heavily on digital onboarding because many of its new target markets are outside Saskatchewan.

That approach reflects where banking is already heading. Forbes included Innovation Federal Credit Union in its World’s Best Banks 2026 rankings after a global survey of more than 54,000 consumers evaluated financial institutions on trust, customer service, digital services, and financial advice.

The recognition matters because digital experience was part of the ranking criteria. In other words, modern credit unions are being evaluated by the same digital standards consumers use for banks, and some are performing incredibly well.

Digital Banking is No Longer the Weak Spot People Assume It Is

For years, big banks had a clear advantage in digital banking, but that gap has narrowed.

Innovation executives said the organization spent years rebuilding its digital capabilities after realizing credit unions had fallen behind during earlier shifts toward online banking. Today, the company says new members can complete account opening online in roughly seven minutes using digital identity verification.

That type of onboarding process would have been difficult to imagine from many credit unions even a decade ago. A PYMNTS report on younger banking consumers found that digital convenience strongly influences where Gen Z and millennials choose to bank. (Source: PYMNTS, “Reaching the Digital Generation: Credit Union Strategies for Growth,” 2024)

Younger consumers are comparing every financial institution against the speed and simplicity they already expect from apps and online platforms they use daily, and credit unions know that now.

Many Consumers Still Do Not Understand How Credit Unions Actually Work

One misconception that some consumers have is that credit unions function exactly like traditional banks. They do not. Unlike traditional banks, credit unions operate as member-owned financial cooperatives. That means members are effectively part-owners once they open accounts.

Innovation describes its model as member-first banking, where profits are returned to members and reinvested into communities rather than distributed to outside shareholders. The organization says it directs at least 2% of pre-tax profits back into community investment initiatives.

Innovation executives described their approach as building financial services around long-term member value rather than quarterly shareholder pressure. For younger consumers, that distinction may matter more than it did years ago.

Research from Tangenesis found that millennials and Gen Z consumers increasingly want financial institutions that reflect their values, particularly around transparency and community involvement. (Source: Tangenesis, “The Next Generation of Credit Union Members,” 2025)

That does not mean people suddenly choose financial institutions based entirely on social impact. Price, convenience, and usability still matter, but community investment and member ownership have become part of the conversation.

Credit Unions Are Expanding Beyond Their Traditional Footprint

Another misconception is that credit unions are geographically restrictive. That is changing fast as more institutions build national digital strategies.

Innovation Federal Credit Union officially became federally regulated in 2023, which allowed it to expand beyond Saskatchewan into additional Canadian markets. Leadership at the company described federal regulation as a major turning point for growth because it opened access to new provinces and younger demographics outside their traditional base. This expansion wasn’t only digital. Innovation recently amalgamated with ABCU Credit Union, located in Beaumont and Edmonton, Alberta, in the first ever inter-provincial credit union merger.

This strategy would have looked very different twenty years ago when physical branches drove most customer acquisition. Now, many consumers may never walk into a branch at all.

The Real Problem is Visibility, Not Capability

The funny thing about the credit union conversation is that many criticisms people still repeat are based on an older version of the industry.

Years ago, some of those assumptions were fair. Digital experiences were weaker, online onboarding was slower, and national reach was limited, but that is no longer universally true. What has not caught up yet is public perception or even awareness of what credit unions are and offer.

World Council of Credit Unions research warned that attracting younger members has become one of the industry’s most urgent long-term challenges. (Source: World Council of Credit Unions, “Credit Unions Confront Challenge of Aging Membership,” 2024) That challenge is tied directly to awareness.

People cannot seriously compare banks and credit unions if they barely understand what credit unions offer in the first place. Innovation Federal Credit Union seems to recognize that clearly. Much of its current strategy centers on rebuilding visibility with younger Canadians while emphasizing digital banking, profit sharing, transparent fees, and community reinvestment.

The larger takeaway for consumers is fairly simple. A lot of people still think credit unions operate the way they did twenty years ago, when in reality, many do not.

Disclaimer: This article is for informational purposes only and should not be considered financial advice. Readers should conduct their own research and consult a qualified financial professional before making decisions related to banking, credit unions, mortgages, or other financial products.