“Fintech” is a buzzword everyone is hearing today, but what does it really mean and how does it impact your organization? Kirk Drake CEO of Ongoing Operations and CU 2.0 and John Dearing, Managing Director of Capstone recently discussed these questions in a webinar.
“Fintech is nontraditional services that are financial in nature provided by someone other than a bank or a credit union,” said Kirk.
This broad definition covers the multitude of different types of fintech ranging from mobile, cyber security, to insurance tech, to cryptocurrency. While not all of these services will apply to the credit union marketplace, Kirk estimates about 30 to 40% are “very germane to credit unions and how they operate and function.”
Today, credit unions are beginning to realize the advantages of partnering with fintech organizations because many fintechs have already built robust solutions that credit unions members are using today. If you can’t beat fintechs, figure out how to join them in a way that benefits your members, your brand, and your path forward.
Here are few pieces of advice from John and Kirk for credit unions seeking fintech partners:
- How to get the process started: Start with thinking about where your credit union is going. Then determine where fintech could provide an efficient route to bringing something into the marketplace or providing a solution for members. Generate three ideas to move the organization forward and identify players who might help meet those needs.
- How to vet partners: Find out if you can work well with the entrepreneur. You’ll be spending a lot of time with them, so personality and culture are very important to consider. It may not be the best partnership if leadership at the credit union and the founder of the fintech do not get along.
- Understand fads vs. trends: Fads come and go, but trends are longer term and meaningful over time. Do not get so wrapped up in the short-term. For example, today the quest for user interface trumps everything, but the longer-term trend is that how people interact with technology will evolve over time. Don’t make the mistake of being overly focused on selecting one solution that will solve all problems. Technology is rapidly changing and there are many players. For example, when it comes to voice assistance, Apple, Google, Amazon, and even Microsoft will likely all have a seat at the table so there will not be just one solution. Being able to anticipate trends will help you position your organization for success.