5 minutes
Strategic Imperatives for Credit Union Executives
As digital transformation advances across the financial sector, cybersecurity has rapidly evolved from an IT issue to a fundamental boardroom priority—especially for credit unions entrusted with safeguarding member data, funds, and trust. The landscape for 2025 is characterized by rapidly changing threats, intensifying regulatory expectations, and the rise of both sophisticated technologies and well-resourced cyber adversaries. Credit union leaders must take a proactive, layered approach to defend their institutions and communities.
Key Trends Driving the 2025 Cybersecurity Agenda
AI and Automation – Examining Both Sides of the Coin
Artificial intelligence is now powering real-time threat detection, helping teams rapidly spot and respond to unusual activity. But this same technology is being weaponized by cybercriminals. Expect AI-driven phishing schemes, malware, and even deepfake scams that can fool the most vigilant staff. Credit unions need to keep their tools and their people one step ahead, with regular upgrades and rigorous oversight.
Cloud Security Takes Center Stage
As workloads increasingly shift to the cloud, misconfigurations and unauthorized access have become common and costly weaknesses. Strong encryption, multi-factor authentication (MFA), and 24/7 monitoring are essential safeguards. Cloud adoption brings many benefits, but credit unions must demand airtight controls from both their internal teams and third-party providers.
Regulation Ramps Up – Globally and Locally
Regulatory frameworks are catching up to the threat landscape. New standards like the EU’s Digital Operational Resilience Act (DORA), alongside U.S. requirements such as PCI DSS, mandate robust risk assessments, tested incident response plans, and transparent reporting. As expectations tighten, credit union boards must ensure alignment with best practices and continuous compliance monitoring.
Third-Party Risks in the Spotlight
Rising supply chain attacks have made vendor management a top concern. By 2025, nearly half of financial institutions expect significant threats stemming from third-party partners such as payment processors and cloud hosts. Rigorous due diligence, regular security audits, and restricted vendor access to systems are now non-negotiable.
Significant Risks Facing Credit Unions
Ransomware: Attackers increasingly encrypt systems and demand steep ransoms, often devastating operations and member trust. Business interruption—not just the ransom demanded—accounts for over half of the total costs.
Phishing and Social Engineering: Sophisticated email, SMS, and even AI-generated phone scams are up by over 200%, with finance remaining the most targeted industry for phishing.
Deepfakes: AI-powered video and audio forgeries are behind multimillion-dollar frauds worldwide, including instances where convincing fake executives have authorized wire transfers.
A recent IBM study reported the average cost of a financial services data breach at nearly $9.3 million, with fines, remediation, and lost trust adding to the toll.
Mitigating Risk: What Credit Unions Must Do
Adopt a Zero-Trust Model: Assume no user or device is “trusted” by default. Require MFA and continuous authentication, enforce role-based access, and segment networks to limit damage if attackers get in.
Align to NIST CSF 2.0: The updated NIST Cybersecurity Framework offers clear guidance suitable for organizations of all sizes. Boards should regularly review cybersecurity policies, demand proactive engagement from leadership, and foster a culture where digital hygiene and resilience are routine.
Perform Due Diligence on Vendors: Rigorously vet all partners, insisting on audits, certifications, and proven response plans. Limit their access to only what is necessary and keep strict contingency plans in place.
Ongoing Staff and Member Education: With 95% of incidents linked to human error, routine training is essential. Teach employees and members to spot phishing and report suspicious activity, reinforcing the message using multiple communications channels.
AI-Driven Defenses: Invest in automated tools that flag anomalies in real time, significantly reducing the cost and impact of breaches.
Robust Incident Response: Plans must be developed, tested, and kept current, ensuring rapid containment and recovery when the inevitable occurs.
Cyber Insurance: An Essential Backstop
As losses from cyberattacks rise, so does interest in cyber insurance. The global market is expected to triple to over $16 billion by 2025. Policies now cover data breach costs, ransomware, business interruption, and even certain regulatory fines. However, underwriters are demanding stronger security controls and may exclude specific high-risk scenarios. Credit unions should tailor coverage to fit their risk profile, and most importantly, see insurance as a supplement and not a substitute for best-in-class cybersecurity practices.
The Bottom Line
Cybersecurity is not just an IT function—it’s a pillar of member trust and institutional soundness. The most resilient credit unions treat it as a strategic imperative, integrating it deeply into digital transformation efforts and governance frameworks. By investing in layered defenses, prioritizing board-level engagement, and staying ahead of emerging threats, credit unions can navigate the uncertainties of 2025 and beyond, safeguarding not just their assets but the trust of those they serve.
Cynthia Schroeder is a Director, Community Financial Institutions, at SRM, and provides advisory services for credit union clients across digital transformation, cybersecurity, operations, mergers, and more. She brings over 30 years of executive leadership and technology expertise to her role at SRM and regularly contributes to SRM Perspectives reports and research. She lectures on cybersecurity and the NIST framework, is a Certified Innovation Executive, and is a respected voice in digital assets and related technologies. Connect with Cynthia at cschroeder@srmcorp.com or on LinkedIn.
