Is Your Credit Union Keeping Up with Modern Technology?
Seventy-nine percent of credit union members would leave their credit union for a financial technology (fintech) firm for convenience and easy access to services.
If you are a credit union, this figure should scare you. But don’t jump to any hasty conclusions just yet — you don’t have to invest a billion dollars in new technology. You can compete with larger financial institutions even if you don’t have the same access to funds.
You do have options. At REPAY, we empower credit unions to enhance the member experience. Our real-time payment technology solutions enable credit unions to provide faster, more streamlined digital service offerings.
Buy, Build, or Partner
Why build something brand new when you can partner or buy?
Banks and credit unions have been dealing with the rise of fintech by choosing one of three options: buy, build, or partner. A few large institutions have purchased smaller fintech disruptors and made them their own. For instance, SunTrust bought FirstAgain and rebranded it as SunTrust’s online lending arm, Lightstream. Other banks have chosen to build their technology, as evidenced when Goldman Sachs introduced Marcus, its online banking service.
While buying or building new technology can work for large financial institutions, smaller establishments have chosen another route – partnership. Many credit unions are in a place where partnering with a fintech firm makes the most sense, regardless of how much capital they’re willing to spend on new technology.
This Forbes piece describes how most credit unions spend a similar percentage of assets (0.42%) on new technology, as compared to a group of nine mega- and regional banks. Credit unions only spend 12% less than the megabanks do, the difference due to their smaller size. However, credit unions can use that smaller size to their advantage by remaining agile and adaptable to ever-changing consumer demands.
As this PYMNTS.com article states, fintech firms “aren’t an adversarial force in the market for credit unions. Rather they are potential partners for filling the gaps in service offerings.” And we couldn’t agree more. Each side brings something valuable to the table.
- Credit unions foster a much higher level of trust among their members when compared to banks and their customers. Credit unions also boast a much higher satisfaction rate than do most other financial institutions.
- Fintech firms bring new technology and innovation, allowing members to make payments faster, apply for loans online, and transact business around the clock.
When the two partner up, your credit union runs in a more modern, efficient, and agile manner thanks to the introduction of new technology.
Fintech Helps Answer Your Most Common Questions
A partnership with a fintech business means you can use the most advanced technology to streamline service offerings. You can give your members better answers to their most common questions:
- Can I apply for a mortgage with my credit union?
- Why, of course, you can! And now, you can apply online, seamlessly submit documentation, and manage your loan payments on our mobile app.
- Can I use my credit union for business?
- Definitely! Not only can you open a business account, but you can also process customer payments. You can also text us for service and access your account 24/7.
Credit Unions and Fintech Firms Are Better Together
Well-run credit unions do not threaten fintech firms. They don’t want to be credit unions, and they rarely seek banking licenses. However, because fintech firms often specialize in a few specific services, it makes sense they would want to fill those solution gaps. Credit unions, on the other hand, are always looking for ways to provide better technology to their members. Therefore, a partnership between a fintech firm and a credit union is an ideal scenario, thereby providing all members with both cutting-edge technology and premier customer service.
In future articles, we are going to examine issues like technological trends for credit unions and how staying small and agile is an advantage in a market of banking giants. If you are curious about how the most advanced payment technologies can help your credit union grow, contact us to request a demo.