3 strategies for credit unions that want to partner with fintechs
Covid-19 has again shed light on how indispensable credit unions are to communities across the country. An influx of financial transactions over the past six months ranging from small businesses applying for loans to prospective homebuyers taking advantage of low rates and submitting mortgage applications has reemphasized how nimble and versatile many credit unions can be in the face of high demand for their services.
However, while some credit unions have quickly adapted to new challenges and demands, others have found it more difficult to keep up. Part of the reason for this is that many credit unions – especially smaller ones – are limited by their operational capabilities and manual workflows. When there is high demand across a number of financial services, these inefficiencies become especially apparent.
One of the ways that you can ensure that you can meet your members’ expectations and remain competitive regardless of the economic environment is by analyzing and assessing your needs through a tech-oriented lens. In other words, all credit unions have inefficiencies that can be streamlined, and outside technology solutions can often offer ways to address these problems.
For some credit unions, a partnership with a fintech is not an issue of desire, but instead of cost and capacity. Many fintechs are pricey and require a number of your internal resources in order to be effectively deployed. However, these issues are often the case for major software overhauls – CRMs, LOSs, and accounting systems, for example. With the right strategy, many fintechs can offer easily implementable, effective solutions to redundancies and inefficiencies that will streamline your credit union’s workflows.
Here are three ways to get started.
- Focus on Hidden Issues First
When it comes to fintech solutions, bigger is not always better. The most glaring issues are often the hardest ones to solve – even with technology partners.
Instead, try to identify some of your institution’s “hidden” pain points. The appraisal serves as a good example of a challenge that most credit unions grapple with, but choose not to initially invest in. The appraisal process is costly, time consuming, and often delays the mortgage lending process – a key service that many credit unions provide. Prudent investments in modern appraisal technology could immediately streamline the appraisal process to reduce turn-times and lower costs. More importantly, appraisal software is a prime example of easy-to-implement technology that yields immediate returns.
- Vet Fintechs For More Than Compliance
When partnering with fintechs, credit unions will often be most concerned with compliance issues. Understandably, a fintech’s compliance with industry regulations, privacy, and more are key aspects of the vetting process. However, in order to invest in successful fintech partnerships, your credit union should dig even deeper than compliance issues.
Fintechs are well versed in marketing and branding, but in order to truly ensure the success of your fintech partnership, you should ask the fintech for references, speak to their existing clients, and even ask for a free trial period to test the software out firsthand. Above all, it is key to understand the fintech’s customer success process. This will guarantee that the fintech will remain responsive to your needs as your partnership evolves, and also assuage any concerns revolving around adaptability or implementation.
- Remember the Member Experience
Every investment that you make into financial technology should in some way benefit your members. Credit unions enjoy member loyalty unlike any other financial institution, and as a result, you should search for fintech partners that help boost your members’ experience.
Examples of this include investments in mobile applications, automated software, and transparency. If you are able to successfully invest in fintechs that serve your members’ needs, this will not only improve their experience, but also attract a new client base and keep you competitive.
