Euro Coins

Our Two Cents

We are passionate about pushing back on the small credit union merger crises and believe the virtual branching 
strategy lends itself to not only slow mergers but create the opportunity for new credit unions to form. We share our strategy and digital innovation openly, the good and the bad. We are currently working with a new credit union forming in our market and a 10-credit union alliance in Chicago.


While there are substantial savings to be had by converting to virtual branching, credit unions must reinvest those savings into growth initiatives to drive membership and loan growth, most notably in technological improvements.

FinTechs are approving and funding instantly with just a few quick questions. This is a paradigm shift for traditional financial institutions. 

Credit unions need to be as competitive as the FinTechs. A 2-page or twenty-question online loan app is not competitive, nor asking for check stubs or taking more than a few hours to approve and fund.

Additionally, losses can be mitigated by partnering with FinTechs that can populate supplemental data (not on the credit bureau) to automated loan operating systems.

Technological advancements in lending are also necessary to provide more inclusivity. To date, most traditional financial institutions offer quick loan apps and automated decisions to only A+/A borrowers. However, thanks to digital advancements and Ai, low-income consumers with colorful or no credit can have the same accessibility as prime credit consumers for these automated online financial products.

 

By considering other forms of character-based underwriting (e.g., consecutive payments for rent or utilities in place of credit score) for those with lean or no credit, these underserved community members will have more inclusivity to financial products and services.