In today’s economy, it is critical for businesses to be scalable and nimble in response to market changes. While this concept is well understood by most credit unions, achieving the scale – and economies of scale – to advance into the future successfully can be easier said than done.
“The number one reason most fintech startups fail is because of an inability to scale,” said Lois Hansen, Vice President, Product Development, for CO-OP Financial Services. “Scale takes investment capital and cash flow that many smaller organizations just don’t have.”
In the case of credit unions, scaling up can mean anything from opening new branches to developing a new digital banking platform or launching new mobile payment products. Of course, these types of initiatives are only as successful as the credit union’s ability to support them.
“Credit unions need to be selective when it comes to the new products and initiatives they undertake to make sure they are ‘right sized’ for their organization,” said Hansen. “Otherwise, they may struggle under the weight of their own product offering.”
To help credit unions successfully grow at a strategic pace, CO-OP offers deep resources and a rich, diverse product offering that can be tailored to an individual credit union’s needs.
“Today we offer more than 100 products, and we shoulder the development costs for all of them up front,” said Hansen. “When we release products into the market, the costs to deploy and manage them are spread across thousands of client credit unions, making it very affordable for credit unions to offer their members leading-edge technology.”
APIs Deliver Product Customization
Hansen emphasizes that while complete solutions remain a great option for many credit unions, the CO-OP API Suite allows products to be customized when that makes more sense.
“Our approach enables the credit union to choose from many options, from deploying a complete product to integrating individual features and functions into their existing systems,” she said. “The ability to choose the exact functions that are of interest allows that credit union to grow its business in a strategic fashion and on a timetable that works with its long-term plan.”
According to Craig Beach, Chief Operating Officer of CO-OP Shared Branching, credit unions should build on a solid product portfolio with a flexible, scalable service model as well.
“One of the best resources credit unions have to achieve scale is through shared branching,” he said. “Members today are requiring account access at all times, wherever they happen to be. Through CO-OP Shared Branching, complimented by CO-OP ATM and CO-OP Member Center, members get the universal access to services they need. And because the network is built on a collaborative model across participating credit unions, each individual credit union leverages the resources of others to achieve the kind of ubiquity that today’s market demands.”
According to Beach, CO-OP Shared Branching is currently the nation’s third largest branch network, encompassing more than 5,400 branches, and it’s growing.
“At a time when many of the bigger banks are eliminating locations, we find that many credit unions are adding branches,” he said. “While digital delivery channels are playing an increasingly important role for financial institutions, consumers, and especially credit union members, value the high-touch experience that only a branch can provide.”
Shared Branching Serves Top Tier Members
Beach notes that members that take advantage of shared branching are typically more profitable for credit unions than those that don’t. “Seventy-one percent of members that use shared branching refer to their credit union as their primary financial institution,” he said. “In general, members want to maintain a tight relationship with the credit union, but they also need that credit union to match the service they otherwise would receive from a big bank.”
Beach notes that the unifying network for shared branching, CO-OP Connect, also facilitates mobile P2P apps, remote deposit capture, digital banking and bill pay. “CO-OP Connect allows credit unions to share the underlying costs of these resources as well,” he said.
Hansen emphasizes that innovative products and a nationwide footprint are just two factors that have helped CO-OP become the largest credit union service organization in the U.S.
“We also provide education to credit unions to help them better understand emerging technological developments and consumer trends,” she said. “In addition to closely watching advancements across core platforms such as ATM, digital and mobile, we are also examining disruptive technologies such as blockchain to see how they are evolving and what opportunities they may present credit unions and their members down the road.”
For more information on how credit unions can take advantage of CO-OP Connect, visit the resource center here.
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