Credit unions have been interested in working with fintech providers for quite some time. However, lingering concerns that fintechs, aka “digital disruptors,” would create more competition for traditional financial services providers made them hesitant. Then the pandemic started. Consumers and businesses became digital converts nearly overnight. This meant that credit unions had to fast-track digital projects to keep up with their member’s needs.
Some larger credit unions can develop digital solutions in-house, so they don’t have to worry about which provider will fit their needs. Many smaller institutions, however, need a fintech’s expertise to make progress. As they look for the right fit, they need to vet those potential partnerships properly. A good collaboration will give them access to more products and services, improved customer interfaces and reduced friction points. It could also lead to lower overhead over time.
On the other hand, a bad partnership could lead to reputational risk, inability to comply with regulatory requirements and missed member needs. To help protect against this, here are six steps the decision-makers should follow while conducting thorough due diligence:
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