Getting Fintech Innovation to Market in Record Time
Posted: Mar 19, 2024 | Author:
Adrianna Adufutse, PSCU/Co-op Solutions VP, Strategic Client Development, and Katrina Beery, PSCU/Co-op Solutions Director, Industry Partner Relationships
The pace of digital banking innovation has nearly every financial institution on its toes, ready to move the minute a new consumer, regulatory or technology trend is spotted. Yet, speed-to-market ambitions come with some very real challenges. Time, talent and investment dollars are all finite resources. Not having enough of any one of these three can hinder even the most innovative organizations from beating the competition to the marketplace.
Credit unions, though, have a unique competitive advantage in the perpetual race for relevancy – genuine collaboration. Not stymied by the dog-eat-dog mentality of more competitive corners of the banking and fintech sectors, credit unions are able to pool their resources, filling and refilling those tanks with time, talent and investment dollars. The mentality of genuine collaboration allows credit unions to pool their resources, filling and refilling resources with time, talent and investment dollars.
CUSO Operationalize Collaboration to Launch Fintech Innovation
One manifestation of this collaboration is the credit union service organization (CUSO). Catalysts for innovation within the credit union industry, CUSOs have evolved from credit union-owned service providers to credit union-led fintech launching pads.
PSCU/Co-op Solutions’ own CUSO history serves as a proof point of the CUSO evolution. Now a combined entity, each arm of our recently joined organization was founded by disruptors who pooled their resources to create something new for the ultimate benefit of the members they served.
In 1977, five Florida credit unions joined together and founded PSCU. Four years later, a group of California credit unions did the same with the creation of the CO-OP Network.
Over the next five decades, each CUSO continuously leveraged the collaborative power of their credit union owners to invest in research and development, technology and innovation beyond the capacity of any single credit union. Today, the same model of investment, networking and risk sharing are ensuring fintech innovation moves fast yet remains a people-centered practice. In partnership with the newly combined CUSO, credit unions have access to even more best-of-breed technology and resources to earn the business of their members.
The Movement Experiences High Volume, High Velocity of Digital Product Delivery
And those members are at the core of every innovation the combined CUSO pursues. In fact, that shared focus on the member is one of the biggest enablers of our strategy to unleash growth opportunities for the movement. The goal is to provide credit unions with innovative technology, unparalleled services, increased scale and differentiated value, fostering long-term success and sustainability for credit unions.
This strategy has enabled a high volume and velocity of fintech innovation. Products like Digital Lending, Lumin Digital, Juniper Payments, Money Movement, Zelle, Buy Now Pay Later, and Co-op ATM, Shared Branch and Pay networks are empowering credit unions to earn the new definition of member trust. Whereas consumers once placed their trust with financial institutions that could keep their money safe, today’s consumers place their trust with financial institutions that keep their money moving, conveniently, seamlessly, safely and in a manner that sets them up for long-term financial wellness. It’s this expansive definition of trust that is pushing credit union leaders to change their collective mindset, from one of life-stage servicing to one of lifestyle servicing. Or put another way, being there for members day-in-and-day-out in those micro, money-movement moments.
Credit Unions Pursue a New Model of Member Centricity
It’s a strategy we like to call the New Model of Member Centricity, and we see three ways forward for credit unions that are as excited as we are to pursue this growth opportunity:
- Engage everyday: Credit unions can acquire and deepen member relationships across all segments and categories of behavior by becoming more deeply embedded into transactional value streams and winning the primary financial interaction moment-by-moment.
- Give guidance: By helping members manage their daily financial needs and educating them on potential new opportunities, credit unions are well positioned to support members’ long-term financial wellness goals.
- Earn member balance sheet: Credit unions can earn more of their member’s financial relationship by offering solutions that combine competitive rates and pricing with outstanding convenience – all designed around personalized member needs.
Mounting evidence suggests micro transactions, the great majority of which occur in the payments channel, are the gateway to long-term relationship value. Indeed, they are the best route to institutional growth, not to mention the fulfillment of the movement’s promise to help bring about greater financial wellness.
The Case for Fintech Partnerships
To further that mission, PSCU/Co-op is not relying solely on its own deep bench of specialized expertise and product development muscle. Partnership with external fintech disruptors is a key component of the CUSO’s ability to give credit union members immediate access to the latest in digital banking solutions.
Through initiatives like our Strategic Provider Program, PSCU/Co-op Solutions streamlines the fintech vendor procurement processes. What’s more, the program can even offer preferred terms and pricing for credit unions. By letting a trusted partner identify and vet best-of-breed fintechs, credit unions can concentrate valuable staff time on those everyday member moments that matter most.
Research proves that the speed of change continues to accelerate along with the need to deliver more complex technology and solutions for credit unions and their members. Credit union collaboration meets this demand in three concrete ways: addressing the needs of the modern member, enabling agile technology development and providing the scale to let credit unions win the race to relevancy.
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