Fintech Partnerships Are Integral to UC Success: CMFG Ventures Webinar

Clockwise from top left: NCUA’s Rodney Hood, CMFG Ventures’ Brian Kaas, Goalsetter’s Tanya Van Court, CUNA Mutual Group’s Carlos Molina and Visions FCU’s Tyrone Muse participate in a webinar of the Fintech Forum on January 25.

Fintechs are not competitors of credit unions – they are essential partners who can help credit unions reach the next generation of members and fill existing gaps in products, services and member experience .

This was the key point made by panelists during Tuesday’s “Building Successful Fintech Partnerships” webinar, which featured NCUA Board Member Rodney Hood, Visions Federal Credit Union CEO Tyrone Muse, Tanya Van Court, Founder and CEO of Goalsetter, and Carlos Molina, Principal Risk Consultant of CUNA Mutual Group. . This was the second event in a series of webinars hosted by CMFG Ventures, the venture capital arm of CUNA Mutual Group, and part of CMFG Ventures’ new Fintech Forum, an online community of credit union executives. , fintechs and industrial partners designed to foster innovation. , share knowledge and discuss topics impacting the future of financial services.

Hood pointed out that given the importance of fintech partnerships to the future success of credit unions, the NCUA has worked to provide the regulatory flexibility needed to embrace these partnerships. Three recent initiatives that align with these efforts included approving the creation of an Office of Innovation and Access agency, the hiring of a director of fintech (which the NCUA is in the process of recruiting for now ) and the creation of a regtech tool, the Modern Examination and Risk Identification Tool (MERIT), available to credit unions, Hood said.

“For me, fintech is integral to the continued success of credit unions so that they can use these platforms not only to meet the needs of their current members, but also for the next generation by addressing the tools they want, such as cryptocurrency blockchain applications and financial data aggregation,” Hood said. “Some of our larger credit unions have the ability to build digital native platforms, but not all of them have that luxury.”

Muse, head of $5.5 billion Visions, based in Endwell, New York, shared fintech partnering best practices from his credit union, which include identifying problems at the credit union and choosing fintech solution integrations that can solve them, and appointing a liaison person at the credit union. who can speak the language of the fintech partner and understand their value proposition. He said Visions focuses on four criteria when considering a fintech partner: the viability of fintech and its products and services, the talent that fintech can bring to the table, the track record of fintech in the resolution of the problems the credit union seeks to solve, and its degree of flexibility.

“There’s no longer a world we’re not going to take advantage of [fintechs]”, Muse said. “They are the catalyst for our success.”

Van Court said his company Goalsetter, which provides a savings and giving platform for young people, is an example of how fintech can help credit unions introduce new solutions that will engage the next generation of members. . She emphasized that for partnerships to be successful, each must be approached differently and according to each credit union’s needs, and that success can be measured by the quality of the member’s experience while using the solution.

“The reason credit unions are partnering with fintechs is to fill the gaps and gaps that may exist. So the question becomes, how much have we helped you fill that hole or bridge that gap? Van Court said, adding, “For me the bottom line is, number one, how many members are we reaching? And second, what is the user experience when you reach them? If they have a bad user experience, that doesn’t entice them to become the next generation of members, but if they have a great user experience, it absolutely entices them to stay with you.

Forming fintech partnerships poses the challenge of mitigating associated risks, including compliance, cybersecurity and data protection risks. Molina said that since legislators and regulators have generally lagged in their oversight of fintechs, credit unions must first understand where fintech stands on issues such as privacy, consumer protection, fair lending and data protection during the verification process. Second, credit unions should consider the reputation of fintech and the likelihood of a disaster occurring, such as a technology failure, that would impact a large number of members. Third, he said credit unions need to consider the unforeseen cultural risks of a fintech partnership, which can be overcome by appointing a key contact who can ensure everyone is on the same page and define partnership success, as Muse does to its credit. union.

Expressing a view shared by all panelists at the event, Molina said that for credit unions, choosing not to embrace fintech partnerships poses the greatest risk of all.

“The biggest risk here in verification is finding reasons to say no,” Molina said. “These organizations have the talent, the technology, the flexibility, and the pulse of the market on what they can deliver, and frankly, credit unions don’t have the budgets, don’t have the talent, or don’t understand how do what these fintech companies can. That’s probably the biggest risk we have to overcome. We have to understand and accept that to be successful in the longer term.

Credit unions interested in learning about future CMFG Ventures Fintech Forum events and becoming a member of the community, which is free, can register here.

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