It’s always a good idea for leaders to get as much data as possible before making key decisions. Good information drives out fear and helps leaders understand the likely outcomes of various choices.
Take fintech as an example. Many credit union leaders fear financial technology companies will continue to disrupt the financial services industry. While fintech continues to evolve, what knowledge now and in the future would support you in making good decisions about whether, when and how to get in the fintech game?
Fintech insights you can use
Drew Pascarella, senior lecturer of finance at Cornell University, Ithaca, New York, offers some answers to this question in the recent CUES video, “Three Things CEOs and Execs Need to Know About Fintech.”
First, the fintech assault continues. While news reports might suggest a slowing of the fintech boom, “fintech as an industry is extremely well-funded,” Pascarella says. “In fact, 2022 is the second-largest funding effort on record by venture capitalists. And over the last five years, about $350 billion has been deployed in fintech … that is now currently being spent to build, to grow and to take share.”
And fintech funding is only half of the story, Pascarella says. Mergers and acquisitions involving fintechs are in high gear. “Each of those transactions has the potential to rapidly change an already complex and perhaps confusing landscape by creating vertical integrations, pairing capabilities, building market presence or creating cost synergies.”
What does this knowledge mean for credit unions? The need to make decisions related to fintech is not going away.
Second, fintechs are not your enemies. “In fact,” Pascarella says, “many want to be your friends.” He notes that there’s an entire ecosystem set up to help credit unions digitize and grow while still focusing on member service. Credit unions will benefit from continuing to learn about successful collaborations and how and why they might want to partner with fintechs—and what it will cost them to do so.
Third, success with building and deploying fintech has more to do with culture than technical skills. “While digitizing your capabilities does require technical skills and integration is nontrivial … successful digital transformation is rooted in employee culture,” Pascarella explains, “and that culture starts at the top with you.”
Keep on learning
Leaders are always making decisions with incomplete information. But learning as much as possible can help. That’s why CUES has developed its new CEO Institute: FinTech, through which Pascarella and other world-class faculty will lead in-person and online sessions designed to help you use innovative technology to your credit union’s advantage. You also can cement your knowledge and get great new ideas from talking with your peers about fintech and other tricky topics. I’d love to hear your stories about how learning has informed your decision-making about fintech or other areas and helped your credit union better serve its members.