From Rivals to Partners: The Rise of Credit Union-FinTech Collaboration
Credit unions and FinTechs used to pursue competing visions of consumer banking. As partnerships form to meet demand for mobile banking and digital payments, a new question emerges: What happens when CU-FinTech collaboration becomes the norm?
01
Credit unions and FinTechs are shifting from adversaries to allies. As member expectations for digital services grow, collaboration is overtaking competition. FinTechs now view CUs not as market threats but as strategic distribution partners for mobile tools, real-time payments and data-driven experiences.
02
Fewer FinTechs now face roadblocks when selling to credit unions, but challenges remain. Compliance costs, small budgets and product gaps still limit expansion—even as more firms see a clear path to partnership.
03
FinTechs’ partnerships with credit unions trail their collaborations with other industry players—but better onboarding could make CU alliances a more attractive growth channel.
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Once upon a time, credit unions (CUs) and FinTechs eyed each other warily. However, rising demand for mobile banking and digital payments has started to turn former competitors into strategic partners. Nearly all FinTechs now serving credit unions identify as vendors, not rivals—a shift driven by member engagement needs and CUs’ openness to innovation. As onboarding barriers drop and vendor-client relationships mature, this collaboration model signals more than convenience. It reflects a structural realignment in how CUs access technology, compete with larger institutions and deliver member value.
Credit unions and FinTechs are shifting from adversaries to allies. As member expectations for digital services grow, collaboration is overtaking competition. FinTechs now view CUs not as market threats but as strategic distribution partners for mobile tools, real-time payments and data-driven experiences.
FinTechs increasingly treat CUs as customers, not rivals.
Once considered competitors, FinTechs now see credit unions as preferred clients. In November 2023, 16% of FinTechs selling to CUs viewed the latter as rivals. By November 2024, that figure had fallen to just 1.9%. Over the same period, the share of FinTechs identifying as vendors rose to 98%. This shift reflects growing recognition of CUs’ member-first model and market position.
98%
Share of FinTechs selling to CUs now identifying as vendors—not competitors
A recent PYMNTS Intelligence study on CU-FinTech partnerships points out that credit unions offer FinTechs a stable, loyalty-driven consumer base and a clearer path to market for digital solutions. In turn, CUs benefit from streamlined access to tools for digital member onboarding, mobile banking and payments—areas where member expectations are rising fast. The relationship has evolved from rivalry to alignment.
Credit unions look to FinTechs for practical digital solutions.
CUs increasingly view FinTechs as technology providers, not market disruptors. Just 12% name FinTechs as top competitive threats, compared to 35% who cite other CUs or community banks, per a recent Jack Henry survey. Most plan to embed FinTech-enabled tools within two years, including payments (54%), account opening (51%), digital marketing (37%) and data analytics (31%). To find partners, 79% rely on peer referrals and 68% on industry associates or trade groups. These trends indicate that CUs prioritize proven, integration-ready vendors offering support for core digital banking and member engagement goals—rather than novel but untested innovations.
New CU-FinTech partnerships focus on financial access and core modernization.
Leading credit unions are building new FinTech ties to boost financial inclusion. For example, Navy Federal Credit Union now works with Bloom Credit to turn bill payments made from checking accounts into credit histories, enhancing credit access for 14 million members.
Meanwhile, Indianapolis-based Financial Center First Credit Union has partnered with Alkami Technology to modernize its digital banking infrastructure, including streamlined account opening, payments and automated clearing house (ACH) processing. The initiative adds marketing and analytics tools designed to tailor offers based on transaction behavior.
Together, these moves reflect how CUs are leveraging FinTechs to modernize core functions while expanding member value. These partnerships are not just technical—they’re strategic responses to rising consumer expectations.
Challenges Still Shape the Partnership Landscape
Fewer FinTechs now face roadblocks when selling to credit unions, but challenges remain. Compliance costs, small budgets and product gaps still limit expansion—even as more firms see a clear path to partnership.
Fewer barriers exist, but friction still limits collaboration.
29%
of FinTechs now report no obstacles to partnering with CUs—up from just 6% a year earlier.
Partnerships between credit unions and FinTechs are getting easier to form. The share of FinTechs reporting no barriers rose from 6% in 2023 to 29% in 2024, according to PYMNTS Intelligence. However, that also means many still face friction. Among non-partnering FinTechs, 44% cite regulatory compliance as a top hurdle, while 42% say their products don’t match credit union needs. Others point to small budgets, slow implementation and CUs’ limited appetite for innovation.
Even as forming partnerships becomes easier, many CUs have not yet expanded into newer FinTech channels. For example, 73% of CUs don’t expect to embed financial services in nonbank platforms. According to a Cornerstone Advisors report, most CU-FinTech partnerships still focus on loyalty, payments and wallets. The path is clearer—but trust, alignment and budget constraints still shape outcomes.
A Velera program offers structure and scale for CU-FinTech partnerships.
Velera’s FinTech Engagement Program aims to bridge the gap between CUs and FinTechs by offering a clear framework for collaboration. The initiative connects CUs with vetted FinTechs through a shared advisory board, enabling co-developed use cases and faster proofs of concept. Since 2024, the program has added 16 FinTechs focused on artificial intelligence (AI), member engagement and lending innovation. It offers a model for how structured programs can overcome uncertainty and accelerate partnerships.
CUs Face Strategic Crossroads in FinTech Alliances
FinTechs’ partnerships with credit unions trail their collaborations with other industry players—but better onboarding could make CU alliances a more attractive growth channel.
Credit unions increasingly recognize FinTechs as partners—not just vendors.
Despite historical frictions, credit unions, for their part, are signaling growing interest in FinTech partnerships. According to Cornerstone Advisors, 32% of credit unions now see FinTech collaboration as a strong growth driver—up from 26% in 2024. Goals include growing deposits, creating new products and services, cutting operational costs and increasing noninterest income. The alignment is there—but one key hurdle remains: the need to offer FinTechs faster onboarding.
40%
of FinTechs partner with CUs—compared to 65% with software platforms and 61% with digital-only banks.
Slow onboarding limits FinTechs’ interest in CU partnerships—but CUs could change that.
FinTechs are more likely to serve software platforms, merchants and neobanks than credit unions. Just 40% of FinTechs currently partner with CUs, compared to 65% with software platforms, 62% with merchants and 61% with digital-only banks, per PYMNTS Intelligence. That gap isn’t about willingness—it’s about process. One in five FinTechs not currently selling to credit unions would reconsider if they could onboard multiple CUs at once. Without scalable entry points, many view the CU channel as fragmented and slow. Credit unions could facilitate these partnerships by streamlining the onboarding process—provided they make the strategic choice to pursue this growth path.
Turning Collaboration Into Scalable Growth
As credit unions and FinTechs move from rivalry to partnership, the opportunity to deliver better digital experiences and member value has never been greater. While barriers to collaboration are falling, true scale and impact require more than intent—they demand operational excellence and a commitment to streamlined partnership.
To turn this new era of collaboration into sustainable growth, CUs should focus on the following strategies:
Modernize integration. Invest in flexible, modern infrastructure that enables rapid and secure integration of FinTech solutions, supporting evolving member needs in payments, mobile banking and engagement.
Streamline onboarding. Standardize and simplify onboarding processes to reduce friction for both internal teams and FinTech partners, making it easier to launch and scale new offerings.
Prioritize high-impact partnerships. Focus on collaborations that deliver measurable improvements in fraud prevention, payments, member experience and operational efficiency.
Accelerate proofs of concept. Use structured programs or engagement platforms to quickly test, validate and scale FinTech solutions that align with credit union goals.
Foster continuous improvement. Use data, peer insights and member feedback to refine partnership strategies and maximize value.
Credit unions that embrace these strategies—removing friction and operationalizing partnerships—will be best positioned to deliver speed, trust and relevance in a rapidly evolving financial landscape. FinTech collaboration is no longer optional for CUs—it’s the blueprint for future growth.
As credit unions look to deepen collaboration with FinTechs, bridging the gap between intent and execution requires the right infrastructure and support. Through our FinTech Engagement Program, Velera is helping credit unions navigate this shift by simplifying integration, streamlining onboarding and accelerating the path from concept to impact.”
Vladimir Jovanovic
Vice President, Innovation, Velera
About
Velera is the nation’s premier payments credit union service organization (CUSO) and an integrated financial technology solutions provider. With over four decades of industry experience and a commitment to service excellence and innovation, the company serves more than 4,000 financial institutions throughout North America, operating with velocity to help its clients keep pace with the rapid momentum of change and fuel growth in the new era of financial services. Velera leverages its expertise and resources on behalf of credit unions and their members, offering an end-to-end product portfolio that includes payment processing, fraud and risk management, data and analytics, digital banking, instant payments, strategic consulting, collections, ATM and POS networks, shared branching and 24/7/365 member support via its contact centers. For more information, visit velera.com.
PYMNTS Intelligence is a leading global data and analytics platform that uses proprietary data and methods to provide actionable insights on what’s now and what’s next in payments, commerce and the digital economy. Its team of data scientists include leading economists, econometricians, survey experts, financial analysts and marketing scientists with deep experience in the application of data to the issues that define the future of the digital transformation of the global economy. This multilingual team has conducted original data collection and analysis in more than three dozen global markets for some of the world’s leading publicly traded and privately held firms.
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