Why Credit Unions need to partner with Fintech startups

Why offering good service is not enough

Credit unions have been dwindling for decades. Banks too big to fail can outcompete on features, AUM, promotions, and even legislation. Despite this, credit unions offer a lot of good for their accounts: better quality service, lower rates, more awareness of opportunities in a local community, and more.
So why aren’t they winning in the era of hyperpersonalized everything? Because they keep trying to compete toe to toe with the big guys. But that’s crazy. They should embrace what they’re good at and work with fintech startups who offer unique boutique products to flesh out their service offerings.

Why? ‘Cause it’s move with the times or stay behind. Let’s talk about it:

Limited development resources

Limited development resources can be a significant challenge for credit unions when it comes to creating advanced financial tools and services. Unlike larger financial institutions, credit unions may have limited budgets, smaller teams, and fewer specialized resources to allocate toward software development. As a result, it can be a daunting task to undertake such projects in-house.

By collaborating with startups, credit unions can save effort that would otherwise be spent on developing and maintaining tools internally. The startups have already invested in research, development, and market validation, allowing credit unions to leapfrog past these initial stages. This enables credit unions to focus on their core competencies and allocate their resources strategically, whether that involves enhancing member services, expanding product offerings, or deepening community engagement.

Partnering with financial service startups provides credit unions with access to specialized expertise. These startups are often at the forefront of innovation and bring fresh perspectives to the industry. By leveraging their knowledge and experience, credit unions can offer their members the latest technology solutions and stay competitive in a rapidly evolving marketplace. This collaboration allows credit unions to tap into the startups’ specialized skill sets and industry insights, without the need for extensive internal research and development.

Move fast and fix stuff

The agility of startups is another valuable asset for credit unions. Unlike larger institutions, startups are nimble and can quickly adapt to market demands and changes. This agility allows them to develop and deploy new ideas rapidly, ensuring that credit unions can stay ahead of the curve and respond swiftly to evolving member needs.

Partnering with startups gives credit unions the advantage of the expertise and experience of these innovative companies. Startups often have specialized knowledge and skills in areas such as data analytics, artificial intelligence, cybersecurity, and user experience design. By tapping into these capabilities, credit unions can enhance their own offerings and deliver exceptional member experiences.

By collaborating with financial service startups, credit unions gain access to a pool of fresh ideas, cutting-edge technologies, and agile methodologies. This partnership facilitates the infusion of innovation into credit union operations, enabling them to provide members with advanced tools and services that meet their evolving expectations. Embracing this access to innovation and agility allows credit unions to differentiate themselves in the market and remain competitive in a rapidly changing financial landscape.

 

Failure has no father

Startups specialize in their respective domains and possess a deep understanding of the challenges and opportunities within the financial industry. Their expertise and experience in areas such as fintech, digital banking, or personal finance management can guide credit unions in making informed decisions and avoiding common pitfalls.

Partnering with startups also allows credit unions to benefit from the startups’ ongoing product improvements, updates, and support. Startups are typically committed to continuous enhancement and addressing user feedback, ensuring that credit unions have access to cutting-edge features, improved security measures, and regular maintenance without the need for substantial internal investments.

Credit unions can transfer a significant portion of the risk to the startup itself. This enables credit unions to focus on their core competencies while relying on the startup’s expertise and market-tested solutions. It offers a more efficient and effective approach to innovation, reducing the risks associated with launching new products or services independently.

 

Let’s Grow Together

Credit unions, with their extensive member base, brand recognition, and regulatory knowledge, provide a solid foundation for startups to expand their market reach. By partnering with credit unions, startups can tap into a ready-made customer base and gain credibility within the industry. This collaboration allows startups to accelerate their growth trajectory while leveraging the established trust and relationships that credit unions have cultivated with their members.

These collaborations foster knowledge exchange and cross-pollination of ideas. Credit unions bring their deep understanding of member needs and industry challenges, providing startups with valuable insights to refine their products and services. Simultaneously, startups offer credit unions access to their specialized expertise, technological advancements, and novel approaches that drive innovation within the industry.

By collaborating for mutual growth, credit unions and startups create a symbiotic relationship that fuels innovation, expands market opportunities, and ultimately benefits members. It enables credit unions to stay at the forefront of technology advancements while startups gain valuable industry insights and market access. This collaboration not only fosters growth for both parties but also drives positive change within the financial services sector as a whole.

 

Further Reading

Need help controlling mindless spending?

Download our FREE Chrome extension to help prevent impulse purchases when you shop online