For Credit Unions, Fintech is a Team Sport
Fintech. It’s the mile-high wave causing financial organizations to paddle frantically to stay afloat. Recent studies show how pervasive and disruptive this wave will be:
- 88% of legacy banking organizations fear losing revenue to financial technology companies in areas such as payments, money transfers, and personal loans. (PWC)
- Among traditional financial organizations, 82% say they plan to increase collaboration with fintech companies in the next three to five years. (PWC)
- While 60% of financial institutions now view fintechs as potential partners, nearly the same percentage (59.2%) are also actively developing their own in-house capabilities. (Capgemini)
- About 30% of consumers plan to increase their use of nontraditional financial services providers, but only 39% plan to continue using solely traditional service providers. (ICBA)
- About 46% of today’s consumers use digital channels exclusively for their personal banking. (Singularity University).
Huddle Up to Win
That’s the big picture. For credit unions striving to compete in this changing fintech landscape, the challenge is complicated by a lack of capital for big tech development projects. CUJournal says, “Credit unions are devoting a substantial portion of their operational budgets keeping up with financial technology.”
Now the credit unions’ superpower, cooperation, comes to the rescue. Credit Union Times says, “Credit unions can compete with big bank/fintech alliances in developing innovative products by collaborating with other credit union organizations to find, foster, and showcase, potential financial technology partners and solutions.”
That’s where a CUSO comes in. A credit union looking to expand its fintech capabilities can turn to a CUSO as a source of expertise and collaboration partners to share the expense. Working with CUSO partners in fintech development has several advantages for credit unions over working directly with a fintech startup:
- The clever solutions that fintech startups create may not address the real-world financial challenges of members.
- As a partner, the CUSO has a say in the development roadmap. That ensures future fintech products continue to serve the credit union community.
- Popular fintech start-up companies can get acquired by large financial institutions, leaving the credit union scrambling to find a new partner.
Closing the technology gap is a strategic imperative for credit unions.
Teaming up to innovate member-focused fintech through a CUSO is the smart play.
We want to work with you!
Mortgage Markets CUSO operates for the benefit of credit unions and credit union members. Interested in learning more about becoming a Mortgage Markets CUSO partner?