Social media platforms such as Facebook, Twitter, and Yelp continue to grow with new users and functionality.

The same can be said for smartphones: Almost every generation now uses smartphones to stay connected, share information, and make purchasing decisions.

When social media and smartphones are used in conjunction with mobile e-commerce apps, a new world of opportunity opens for credit unions to compete with mega financial institutions.

According to a 2013 Federal Reserve report, 48% of smartphone owners use a banking app to check account balances and recent transactions, transfer money, and make deposits. As these services become more robust, we can expect a 10% increase in mobile banking use every year.

Demographics are at work here, too. There’s no question that generation Xers and millennials—now known as generation C for “connected”—are always looking to extend their limited budgets, and they have no qualms about banking online.

But at the same time, the fastest growing demographic on Facebook is baby boomers. They love to share examples of money-saving coupons, rewards, points, and loyalty programs.

Pew Research reports that 71% of adult Internet users use Facebook. Credit unions have an opportunity to extend their member base and card use by offering a rewards program that speaks to these needs.

This advent of online engagement, mobile banking, and e-commerce means credit unions must be proactive and take advantage of the combination of financial services, rewards programs, and social media apps.

Traditionally, large institutions with extensive marketing budgets have used expensive rewards programs to encourage customers to open new accounts, increase card use, and purchase additional products and services.

But rewards programs don’t have to be expensive and out of reach for credit unions.

Rewards programs can attract new members by offering bonus points for referring friends, opening new accounts, and sharing information through social networks and mobile apps. They also increase noninterest income.

One of the primary means to accomplish these goals is to reward consumers who bank and shop with local merchants.

Companies like Buzz Points can help. It’s a “bank, buy, redeem local” merchant-funded debit loyalty program, and a CUNA Strategic Services alliance provider. It rewards members with points for using their debit cards, shopping locally, and purchasing banking products and services.

Members then redeem points for rewards, such as gift cards from local merchants, or donate them to charitable causes. By design, the program encourages member engagement. Its use has resulted in an average 40% growth in transactions, increased noninterest income, and 50% higher use of banking products and services.

Plus, local merchants gain from increased local spending.

JAY VALANJU is CEO of Buzz Points Inc., a CUNA Strategic Services alliance provider.