VyStar Credit Union’s acquisition of First Coast Federal Credit Union earlier this year reflects a trend of credit unions growing through acquisitions — something previously associated with banks, says Steven Kelley, an adjunct economics professor at Jacksonville University and director of downtown development for Jacksonville’s Downtown Investment Authority.

The growth of VyStar, which is based in Jacksonville and has branches in Georgia, could make the credit union more competitive against banks, says Nilufer Ozdemir, an associate professor of economics at the University of North Florida.

A Changing Landscape: Jacksonville was once home to several bank headquarters and main offices. That changed with deregulation in the 1980s and ’90s, Kelley says. As banks merged, they consolidated headquarters locations and whittled their locations to meet the needs of Millennials and Gen Zs focused more on digital banking, Ozdemir says.

Jacksonville’s Appeal and Challenges: With a robust job market, relatively affordable housing and a median resident age of 36, Jacksonville remains attractive for consumer banking businesses, Ozdemir says. On the other hand, higher interest rates have already led to a decrease in customer demand for credit.

Still, developer activity in and around the city continues to show that Jacksonville is poised for growth, Kelley says. “That will help us in Jacksonville through this economic downturn probably more so than other markets around the Southeast and even in Florida,” he says.

Fintech Competition: “A significant number of financial firms and startups relocated or expanded to Florida during the pandemic, and Jacksonville received its share,” Ozdemir says. That includes more than 62,000 people in Jacksonville working in the fintech industry, according to JAX Chamber. “The growth in the fintech industry has the potential to disrupt banking and credit union businesses in Jacksonville,” she adds.