Becoming the Primary Financial Institution for More Members

August 12, 2025

Earning Primary Financial Institution (PFI) status isn’t a nice-to-have anymore – it’s the line between a shallow relationship and a lasting one. When your credit union is where members trust their paycheck, bill pay, borrowing, and financial tracking to happen, the results show up everywhere: higher engagement, deeper trust, more products per member, and stronger revenue.

Getting there is harder than it used to be. Digital-first banks aren’t just disruptors anymore; they’re the default for younger generations. Cornerstone Advisors reports that only 30% of Gen Z consider a traditional financial institution their PFI, while 45% name a digital bank or fintech instead. As fewer members rely on branches and more choose banking apps the way they choose streaming services, credit unions need a different approach to building loyalty.

Why PFI Status Matters So Much

Raddon Research Insights found that members who identify their credit union as their PFI are five times more profitable than those who don’t, and are more likely to hold auto loans, credit cards, and mortgages with the credit union instead of a competitor. These aren’t just deeper relationships – they’re stickier, more resilient, and materially better for the bottom line.

The Credit Union Advantage

Unlike large banks or faceless apps, credit unions are built for relationships. Paired with timely digital engagement, that’s a real advantage – but only if it gets acted on. Credit unions earning PFI status today are prioritizing real-time digital wallet provisioning, in-session cross-sell for loans and deposits, and onboarding experiences designed to convert interest, not just capture it.

Rethinking Member Profitability

“Member profitability” can feel like an uncomfortable phrase in credit union circles – the mission has never been to maximize profit per member. But ignoring profitability entirely means missing real insight into member behavior and relationship depth.

Across most credit unions, membership breaks into three rough tiers: about 20% are highly profitable, holding multiple products, strong balances, and loans, and treating the credit union as their PFI. The majority are marginally profitable, using one or two products or interacting only occasionally. A small subset are significantly unprofitable, requiring high servicing or acquisition costs, or generating charge-offs.

The strategic move isn’t to offboard the unprofitable segment. It’s to understand what separates the top 20%: what products and behaviors led them there, how their journey started, which traits show up in members just a step or two behind, and what could be proactively influenced to grow more high-value relationships.

The goal is to elevate the whole membership, not cherry-pick the top tier – and that starts with data: the kind of real-time insight that lets you nudge a new member toward a second product, prompt an in-session refinance offer, or catch a direct deposit drop-off before it becomes churn. It’s worth noting that your most profitable members are almost always your PFI members – they chose you for more than a good rate; they chose you as their financial home.

What Credit Unions Can Do Now

Invest in onboarding that converts, not just attracts – digital account opening and loan application flows should surface relevant offers, minimize abandonment, and use identity intelligence to move quickly. Make switching easy, since embedded digital wallet provisioning, direct deposit switching, and real-time card funding help new members start transacting right away. And use data to deepen relationships proactively, rather than waiting for churn signals to appear.

Strategic Questions for CU Leaders

Do you know what percentage of your members consider your credit union their PFI today?
What behaviors and product combinations define your top 20% most profitable members?
What data and tools are you using to nudge marginally profitable members toward deeper engagement?
Are your digital onboarding experiences actually designed to capture and activate PFI relationships?

Sources: Cornerstone Advisors, “What’s Going On in Banking 2024”; Raddon Research Insights, 2023, “Maximizing Primary Financial Institution Status”; Filene Research Institute, “Understanding Member Profitability.”