There are storm clouds hanging over today’s housing market, especially for populations that have been underserved by the financial services industry. Mortgage rates and home prices have pushed affordability to its lowest point since 2009, according to Black Knight. In the first quarter of 2018, ATTOM Data Solutions found 64 percent of Americans live in markets where it’s cheaper to rent than to buy.

Here’s the silver lining: Institutions are looking for ways to bring the underserved and underbanked in from the storm, leveraging technology to reduce friction in the lending process. When affordability disproportionately puts pressure on lower-income and first-time homebuyers, even the simplest tools to make the mortgage process smoother and more flexible can have an outsize effect on people’s ability to see an application through to close.

Brian Kneafsey is head of client operations at Blend
Brian Kneafsey is head of client operations at Blend

But when people think of fintech solutions that are improving loan accessibility, who do they think of? Quicken Loans’ Rocket Mortgage takes a fair share of the press, as do large banks like Wells Fargo and U.S. Bank. Why not credit unions? It’s clear that leaving behind entire swaths of the population is bad business, and credit unions, with their commitment to long-lasting customer relationships, are obviously interested in setting up as large a tent as possible.

Unfortunately, credit unions have been underserved by the technology sector. Unlike giant financial firms, many credit unions have a difficult time retaining top tech talent internally. And when it comes to sourcing external collaborators, many tech firms are reluctant to enter a highly regulated space where the end product is less sexy than the latest gadget or smartphone. The unfortunate result? Credit unions are not serving as many people as well as they could.

The good news is that technology is beginning to make headway in this industry, and credit unions are finally gaining a powerful new tool set to help them reach more people and increase their overall competitiveness. Technology providers are stepping into this space to help lenders build sticky portals that help consumers apply for a loan. With “software as a service” (SaaS) products, smaller lenders can offer their clients the same helpful features and intuitive user experience they might expect from a larger lender, not to mention from Starbucks, Amazon and countless other facilitators of their daily digital existence.

It’s easy to look at the younger generation of home buyers and see only a demand for technology, but that’s not the whole picture. In this year’s Borrower Insights Survey, Ellie Mae found that millennials, while most likely to want digital mortgage solutions, were also “the most likely group of homebuyers to want more interaction with their lender. More than one-third of them (37 percent) said more face-to-face interaction and more communication with their lender would have improved their last mortgage application experience.”

This is great news for credit unions that make member experience a top priority. It means that credit unions can build a winning strategy by focusing on building long-lasting, personal member relationships while partnering with fintech startups to build out consistent cross-product experiences online. Here, too, software can help. For example, while Blend began by focusing on mortgages, we’ve already expanded to home equity loans and are considering expanding to other types of loans: student and automotive loans, for instance.

Digital can no longer be an afterthought for credit unions. Frictionless online applications will help credit unions stand out from competitive lenders. In a digital-first era, it goes without saying that digital application portals are likely to drive higher lifetime value and member retention. What’s unquestioned is that they also drive the operational efficiency that credit unions have become known for.

That operational efficiency is at the core of the superior member experiences that credit unions so often provide. Credit unions need to make sure that they are translating those outstanding experiences to the digital realm. To stay competitive, credit unions need to partner with tech vendors. Imagine, then, with technology’s help, a near future for credit unions: an ever-growing customer base of borrowers getting the best of what credit unions and fintech firms have to offer.