In today’s digital-first economy, the pace of technological change is staggering. As former Canadian Prime Minister Justin Trudeau aptly put it, “The pace of change has never been this fast, yet it will never be this slow again.”
This is a reality for every industry, but it is especially evident in financial services. While fintech disruption has brought significant challenges to the industry, it has also opened the door to transformative opportunities—especially for credit unions that are ready to explore what a strategic partnership with a fintech might offer.
The fintech advantage
Fintech firms are reshaping financial services faster than any other recent development by offering innovative, nimble and user-friendly solutions that are transforming the way consumers bank and make purchases. For example, Cash App reported $1.26 billion in gross profit last quarter and recently received FDIC approval to offer Cash App Borrow loans (in 2024, Cash App originated roughly $9 billion in loans through partner banks). Chime has seven million active users, representing $8 billion in monthly spending. These numbers aren’t just impressive headlines highlighting recent success—they are indicative of a larger shift in consumer behavior and expectations, with sweeping implications across the entire financial services industry, influenced by widespread technological applications and use cases.
Fintechs are also reshaping financial services in the small and medium-sized business (SMB) market. For example, PayPal is addressing capital access gaps for small businesses—originating over $30 billion in global small business loans since 2013 through streamlined, digital-first solutions. With strong customer satisfaction, 90% customer renewal rates and measurable business growth among borrowers, PayPal’s lending programs demonstrate how fintechs can scale impact where traditional financing often falls short. According to Credit Union Times, U.S. Small Business Administration (SBA) loans account for less than 1% of credit union loans—but growth was four times faster than other loans last year, illustrating this key growth area for credit unions.
Community financial institutions have long relied on financial technology providers to power their digital capabilities—whether it’s online banking, bill pay or loan origination systems. For credit unions, the ability to form thoughtful, mission-aligned partnerships remains a strategic advantage in meeting shifting consumer expectations and behaviors, particularly as more members engage with fintech solutions.
Opportunities meet obstacles
Cornerstone Advisors reports that while 70% of financial institutions recognize the value of fintech partnerships, many cite several obstacles for pursuing them, with some not getting the results they anticipate through such partnerships. Reported challenges include:
- Allocating the right resources: Forty-seven percent (47%) of banks and credit unions report they do not have personnel dedicated to exploring, evaluating and managing fintech partnerships. In addition to that, 53% of financial institutions report that they have no interest in entering a fintech partnership, drastically impacting their ability to find and implement the right solutions for their members.
- Vetting potential partners: With 75% of venture capital-backed fintechs failing, doing the due diligence of identifying the right partner for your financial institution is critical. With so few banks and credit unions committing resources to fintech solutions, this concern is enough to steer many financial institutions away from pursuing partnerships in the first place. When vetting fintech partners, regulatory requirements and data security are also a top consideration.
- Integrating tools and solutions: Lastly, fintech solutions often lack compatibility with core banking platforms, making partnerships difficult to integrate.
A new path forward: Partner with purpose
Although these obstacles are real, they should not deter credit unions from pursuing the opportunities and benefits that come along with partnering with fintech providers. For credit unions, fintech partnerships are more than a technology play—they are a growth strategy. When implemented correctly, a fintech partnership can help credit unions to scale services efficiently without the overhead of traditional infrastructure, enhance member experiences through personalized, digital-first solutions and remain competitive in a rapidly evolving financial landscape.
Fintech engagement programs can provide a structured collaborative approach to innovation in an effort to address the aforementioned concerns. A robust fintech engagement program uses a three-pronged strategy—platform, engagement and advisory to empower credit unions to find fintech solutions and meaningfully integrate them within their operations. By participating in a fintech engagement program, credit unions no longer need to navigate the fintech landscape alone. Instead, they can leverage collective intelligence, shared resources, and expert guidance to help them bridge the gap between seeing the value of fintech partnerships and extracting value from them in practice.
The future of financial services belongs to those who can adapt, collaborate and innovate. For credit unions, that means leaning into partnerships that align with their mission and member needs. With the right approach, fintech isn’t a threat, but rather a bridge to a stronger, smarter and more scalable future for your financial institution.
