Credit Unions Partner With FinTechs to Compete Like One

The digital transformation has made the financial landscape more crowded and competitive than ever before. Credit unions (CUs) face the dual challenge of finding ways to offer the latest digital banking tools to their members while still bringing something extra that differentiates them from neobanks and even larger, traditional financial institutions (FIs) with whom they now have to compete. FinTech partnerships provide the potential to help CUs in offering the latest in online and mobile banking experiences while enabling CUs to focus on delivering the personalized service and community connection that defines them.

For traditional FIs, FinTechs may be perceived primarily as competitors and disruptors. Some CUs may be hesitant to team up with those who are turning the banking industry on its head. On the other hand, FinTech partnerships allow even competitors to collaborate in mutually beneficial ways. Such partnerships can save time and money that would have to be invested in developing new digital banking products while permitting CUs to pick the best results from a field of innovators who have taken on the risks involved with developing new products.

In the latest “Credit Union Tracker®,” PYMNTS examines how FinTech partnerships can help CUs beat the competition and keep their members satisfied.

Around the Credit Union Space

The Michigan Credit Union League’s (MCUL) new partnership with Scienaptic AI intends to add artificial intelligence (AI) underwriting technology to the capabilities of MCUL’s member CUs. Scienaptic’s AI software is already employed by other Michigan CUs and is expected to speed up the loan application process, as well as permit a greater number of applicants to be approved. Additionally, AI underwriting is expected to help client CUs mitigate some of the risks of the decisioning process.

Many CUs are looking to FinTechs for turnkey solutions to get their crypto services up and running quickly, securely and reliably while following the National Credit Union Administration’s (NCUA) December guidance regarding CUs offering members direct access to cryptocurrency markets through third-party digital asset services providers. While state-level rules and legislation will still influence how state-chartered CUs move forward, the December guidance answered questions that had kept many federally-chartered CUs from dipping their toes in crypto markets before this point. The long wait has made some eager to find partners who have already tested the waters.

For more on these stories and other credit union developments, check out the Tracker’s News and Trends section.

First Tech Federal Credit Union on Maximizing the Benefits of FinTech Partnerships

With the pandemic accelerating digital transformation, CUs are looking at FinTechs not just as competitors, but as valuable partners that can help them meet members’ needs.

In this month’s Feature Story, Mike Upton, chief digital and technology officer at First Tech Credit Union, talks about maximizing the benefits of FinTech partnerships to enable the latest technology solutions while permitting CUs to focus on being the best at what they do.

PYMNTS Intelligence: Giving CUs a Leg up in the Digital Transformation

CUs need to offer the latest technologies while still controlling costs, as good rates and low fees remain a significant draw of CU membership. Not only do low costs help to retain current members, but it also helps to appeal to the price-conscious Generation Z consumers who are just starting their banking journeys and looking for lifelong financial partners. FinTech partnerships can help CUs maintain their traditional value proposition while still offering the digital capabilities consumers now take for granted.

This month’s PYMNTS Intelligence looks at how CUs can make the most out of FinTech partnerships and create seamless member experiences that bring the best aspects of CU membership into the digital age. 

About the Tracker

The “Credit Union Tracker®,” a PYMNTS and PSCU collaboration, examines the latest trends shaping the credit union space and how CUs can maximize the potential offered by FinTech partnerships.