The world of fintech credit union relationships used to feel like a high-stakes wrestling match. For years, financial technology seemed like a threat trying to steal your members.
Today, the script has completely flipped. Fintech is now the best tool to make your credit union stronger and more member-focused.
Now, it’s clear there’s no need to worry. If anything, there’s reason to celebrate.
Partnering with and investing in fintechs is the right play. And every credit union executive must know how to navigate this new ecosystem.
The choice is simple: invest in the tools that help your members, or get left behind. Luckily, credit unions have a unique history and structure that makes them ideal partners and investors in this space.
How Do Credit Unions Use Fintech?
If you’re a credit union executive, you already know. But if you’re not, this one’s for you:
Credit unions mainly use fintech to improve their operations and member experience. The right fintech solutions are the digital engines that keep banking systems running smoothly. They handle things like remote check deposits and faster loan applications. This makes life easier for both staff and members.
Many CUs rely on fintech for basic survival in the modern digital age. Think about your mobile app and online banking platform. A fintech company likely powers the best parts of that experience. Fintech is how credit unions compete with giant national banks and fast-moving startups.
Executive takeaway: The right partners help credit unions scale services quickly and efficiently.
Top partnerships: Lending fintechs like Splash Financial, digital account opening fintechs like Valiify and Glide, and onboarding fintechs like SwayStack.
How Can Credit Unions Learn to Love Fintech?
The first step is admitting that the old way of thinking is done. Fintech companies are not trying to shut down credit unions. They are simply trying to solve problems using better technology.
The second step is to look at fintechs as potential partners. Your goal should be to find a great problem-solver who shares your strong, member-centric values.
Credit unions have actually been innovators for a long time. For example, the CUSO model was designed exactly for this kind of collaboration. (You can read more about this history of CUSO innovation.)
But the best way to learn to love fintechs is to find the ones that share your mission and values. The ones that focus on a single problem and solve it for your members make great allies.
Executive takeaway: It’s easy to love fintechs if you partner with ones that believe in people helping people.
Top partnerships: Ribbon, Starlight, and Cache are driven by passion and a mission.
How Can Credit Unions Invest in Fintech?
Once you love the power of fintech, the next step is to fund it. There are a few main ways a credit union can get involved with investment. The first is to invest directly in a company that you use as a core vendor. This gives you a seat at the table and influences their product roadmap.
A more strategic method is to use a dedicated CU fintech investment fund. These funds pool capital from multiple credit unions. This diversifies your risk and gives you access to professional due diligence.
Developing a clear fintech investment strategy is key before you spend any money. Investing smartly means choosing partners who will help you serve your members better, not just chase the next big market trend.
Finally, the CUSO structure allows credit unions to partner and invest together without major legal headaches. Using a CUSO, you can turn a simple vendor partnership into a valuable, revenue-generating investment.
Executive takeaway: Not only can you invest in fintech, but you should.
Top investments: Fintech investment funds like Black Dragon, scaling companies looking for partnerships like Senso and Painted Hills CUSO.
The Future of Fintech Credit Union
The time for hesitation is over. Fintech is no longer a luxury for big banks. Fintech partnerships are necessary for any credit union that wants to grow.
By partnering, investing, and innovating, you ensure your relevance for the next generation of members. The only thing worse than investing in the wrong startup is not investing at all.
We have created extensive resources on this topic. You can find more details on our CUSO investment models and strategy on our site, including our deeper dive on CUSO Investment. Our mission is to help credit union executives like you make smart, informed decisions about technology.
Ready to move from reading to action?
Connect with CU 2.0 through our Fintech Call Program to learn more about early fintech partnership and investment opportunities.
