5 reasons that credit unions should partner with FinTech's

Created by
Laura Hillhouse
September 2, 2019

The changing digital landscape is transforming the way that financial institutions are operating and planning for the future. Technology and the digitisation of what used to be traditionally manual processes, has meant the rise of FinTech’s.

A FinTech is a company that produces technology that supports or enables banking and financial services.

FinTech’s originally made banks and other financial organisations feel defensive and they were viewed as competitors. Today, they are seen as more of an opportunity and less of a threat. This is because FinTech’s present an opportunity for financial institutions to grow and adapt to a new way of thinking and operating.

Banks have already started to adopt new strategies that include FinTech partnerships. Credit unions around the world have also been following suit and now it’s time for UK credit unions todo the same. If the concept of a FinTech partnership is completely new to you or you have been considering it for a while, we’ve come up with some reasons that might help you make a decision. There are so many reasons to partner up with a FinTech, but we have come up with 5 of the main benefits that credit unions could achieve from a partnership of this kind. Read on to find out more.

1) What many organisations don’t consider is that FinTech partnerships can help to solve problems specific to industry. Think about the hurdles you’re facing right now. It’s highly likely that there’s a FinTech out there that can solve your problems. They have the state-of-the-art technology and secure networks that can allow credit unions to cut the time and costs of internal processes. This could help transform the way that you work.

2) Gaining better insights into what your members are doing could help you shape the future of your credit union.FinTech’s can offer this kind of technology so you can see what your members are doing with their money. This way, you can target specific products to groups of members.

3) A partnership like this can also contribute to the culture of the credit union. A new mindset can be established through the use of technology which can help in attracting younger members into the credit union. It can also help you to attract in younger volunteers and staff. Having modern technology will help to make your credit union look more attractive to job seekers and members alike.

4) Finding a faster way to create a competitive advantage is what will speed up the growth of credit unions in an increasingly digital market. FinTech’s will help you do this. Credit unions are often in a position to get new innovations to the market quickly if they have a forward-thinking board and with a strong FinTech partner, your credit union could lead digital transformation in the industry.

5) FinTech partnerships also give credit unions the opportunity to appeal to a wider range of demographics. FinTech’s provide the opportunity and tools that it takes to retain members and attract in new ones. They offer a digital way of working that allows current members to move with the times and receive the types of products and services they are tempted with from other financial organisations.

A FinTech partnership is the way forward for any credit union but there are some points to consider when choosing a partner. Here are some of things you should be thinking of before entering into a partnership with any FinTech:

  • Look at the long-term impact of a partnership. How do you think it will benefit you in the long-run?
  • You will need to develop new capabilities as with technology comes changing member preferences and needs so take this into account before making a big change.
  • Make sure to choose a FinTech that is educated on the regulations and processes you need to follow. You don’t want to install new technology only to find out that it doesn’t follow the rules you need to be compliant.
  • Do your research on the company. Look into their security accreditations, do they have people that understand your compliance processes and make sure there is no bad press surrounding them. You could even reach out to other credit unions to find out more about them.

These are just some of the reasons that your credit union should consider a FinTech partnership. As a FinTech partner ourselves, we have been able to watch credit unions adopt new technologies for their members. It’s a win-win situation for both your credit union and those using your services.

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