Today, they increasingly meet in the middle, trading rivalry for collaboration as both groups confront rising member expectations, tighter margins and accelerating digital change.
That shift sat at the center of “Credit Union Innovation Readiness: How Credit Unions and FinTechs Are Innovating Together,” a January PYMNTS Intelligence study produced with Velera. Drawing on surveys of 500 credit union executives and 100 FinTechs, the report mapped how partnerships are reshaping product strategy, delivery timelines and operational priorities across the sector.
From the credit union perspective, partnerships now function as a core operating model rather than an occasional experiment. More than half of credit unions said external partners enable faster innovation and stronger competitiveness, and nearly two-thirds reported that FinTech relationships help them move at greater speed or scale than they could achieve internally.
What stands out, however, is how grounded these collaborations have become.
Partnerships Focus on Upgrades, Not Greenfield Products
Instead of chasing splashy launches, most partnerships concentrate on improving what already exists. The report found that 64% of credit unions worked with FinTechs to add new features to existing products, while 63% introduced new service channels or delivery capabilities through their latest collaboration. These efforts typically focus on making current offerings easier to use, faster to access or available through additional digital touchpoints.
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Fraud prevention and compliance also play a role. More than half of credit unions cited risk and compliance enhancements as part of their most recent partnership, and a sizable share identified these efforts as the primary driver of collaboration. In practice, this means FinTechs are often brought in to sharpen authentication, reduce false positives and strengthen regulatory controls alongside front-end improvements.
The pattern reflects a broader recalibration. Innovation is no longer defined primarily by launching standalone products. Instead, it increasingly means modernizing core experiences, tightening operations and extending reach across mobile and digital channels.
Mobile and digital payments illustrate this shift. Two-thirds of credit unions said external partners already provide or soon will provide support in this area, and more than 1 in 5 now rank mobile payments as the single most important focus of partner engagement.
Data analytics followed, with nearly 7 in 10 credit unions relying on FinTechs to deliver or expand analytics capabilities that inform member experience and decision-making.
Read the report: Credit Union Innovation Readiness: How Credit Unions and FinTechs Are Innovating Together
Execution Over Experimentation Defines the New Model
These priorities reveal how partnerships translate into everyday execution.
Rather than rebuilding their product catalogs from scratch, credit unions most often use FinTechs to embed new functionality into existing platforms, streamline onboarding and authentication, and introduce digital-first payment experiences. Small institutions frequently pursue these upgrades through shared networks or cooperative service organizations, allowing them to spread costs and complexity. Large credit unions, by contrast, tend to commission more bespoke builds, using FinTech expertise to create differentiated solutions tailored to their own member bases.
The relationship itself has evolved alongside these tactics.
Credit unions bring trusted member relationships and regulatory footing. FinTechs contribute specialized technology, implementation capacity and product velocity. The result is less about brand displacement and more about capability layering.
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