A FinTech that wants to sell to 10 credit unions can face 10 separate onboarding processes. For a market made up of thousands of individual institutions, that repetition can affect whether a provider decides the opportunity is worth pursuing.
Among FinTechs hesitant to sell to credit unions, 58% said a bundled, one-time onboarding process that could serve multiple institutions would make them more likely to partner, according to the September PYMNTS Intelligence report “FinTechs Want In: How Credit Unions Can Turn Partnerships Into Growth,” produced in collaboration with Velera. That’s up from 21% in November 2024.
A more standardized path into the sector could reduce the work required to establish each new relationship and give providers a way to reach multiple institutions without repeating much of the same onboarding process.
Interest in the market has grown. Among FinTechs that didn’t sell to credit unions, 48% said they were very or extremely likely to start within three years, compared with 4% in November 2023. Including those that were somewhat likely brought the share open to entering the market to 74%.
The Bottleneck Comes After the Sales Pitch
There’s a challenge in converting interest into signed partnerships.
FinTechs already working with credit unions provided a view of where the process could stall. The report found that 56% cited complex procurement procedures as a key impediment to selling to credit unions, double the 28% that said so in November 2023. Meanwhile, 54% pointed to slow decision-making, up from 34%.
Half said credit union infrastructure wasn’t suited to new technology, while 46% cited lengthy implementation. Complex regulation and compliance was cited by 42%.
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Budget constraints ranked lower, cited by 36%.
The findings suggest the opportunity for credit unions extends beyond allocating more money to innovation. The process used to evaluate, approve, integrate and launch a FinTech product can determine how readily institutions can tap a growing pool of providers.
Bundled onboarding offers one potential way to reduce some of that friction. A provider that completes common requirements once and can carry them across participating institutions could spend less time repeating due diligence and integration work for each prospective credit union. Individual institutions would still need to make their own decisions about products, risk and member fit, but common elements of the process could become easier to navigate.
The economics could change for FinTechs as well.
Selling to financial institutions typically means weighing the potential customer opportunity against the cost and time required to land and implement each institution. Credit unions can present an especially fragmented market because the opportunity is spread across many separate organizations.
A shared onboarding path could alter that calculation by making each completed integration useful across more than one potential customer. The report didn’t establish how much cost or time such a model would save, but the rise in FinTech interest in bundled onboarding shows that access itself has become part of the partnership equation.
Credit unions already depend on outside providers. The average credit union sources roughly nine of its current products from third parties, up from six in November 2024. Fewer than 1% of credit union executives said they don’t need external partners to innovate.
At PYMNTS Intelligence, we work with businesses to uncover insights that fuel intelligent, data-driven discussions on changing customer expectations, a more connected economy and the strategic shifts necessary to achieve outcomes. With rigorous research methodologies and unwavering commitment to objective quality, we offer trusted data to grow your business. As our partner, you’ll have access to our diverse team of PhDs, researchers, data analysts, number crunchers, subject matter veterans and editorial experts.
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