Credit union system as a service

Published by: Jose Ortiz

August 9, 2023 | TruStage

 

by Ronny Chapman, Senior Vice President, Fintech Solutions

In the current financial services landscape, consolidation among credit unions is a reality and is showing no signs of slowing down. Today, even as the total number of members and assets continues to grow, there are just over 4,700 federally insured credit unions in the U.S.

That is a dramatic decline over the last five decades when the industry peaked at over 23,000 institutions. Significant drivers include rising costs and increasingly demanding improvements relating to digital channels, personalization, security, and efficiency.

Many credit unions are known as the lifeblood to their communities, serving with passion and drive to help promote financial health. The loss of small credit unions endangers the ‘local community’ model that credit unions are often known for, as well as the health and diversity of the financial services ecosystem overall. To remain a key resource to their community’s financial needs, credit unions must seek alternative collaboration strategies that offer ways to scale and grow the reach, sustainability, and impact of not only each organization, but of the credit union system as a whole.

Working with large retailers and auto dealers, for instance, is an effective strategy for credit unions to help achieve scale and provide access to a new range of digitally-enabled products and services without having to merge; and most importantly, they can keep their brand. Moreover, the credit union benefits from improved customer loyalty, while also gaining a new source of revenue while retailers have the ability to build out local captive consumer finance options.

Application Programing Interfaces (APIs) are the great unifier for enabling credit unions and retailers to connect, share data and functionality, while ultimately creating a more streamlined and interconnected ecosystem aimed to help better serve consumers in their moments of financing need. An API can serve as the single endpoint that gives individual retailers and large auto dealers access to the credit union system and vice versa.

As your credit union evaluates technology partners, it is important to consider providers who see value in serving institutions of all sizes. While many gravitate towards large asset credit unions, some recognize the importance and significance of supporting small market credit unions as a key part of the credit union system overall.

1 NCUA, Industry At A Glance, quarter ending December 31, 2022.  2 Credit Union National Association, United States Credit Union Statistics, 1939-2021.

TruStage™ is the marketing name for TruStage Financial Group, Inc. its subsidiaries and affiliates. Corporate headquarters are located in Madison, Wis.  © TruStage

Contact Jose Ortiz for questions or assistance.

Jose Ortiz
Jose Ortiz Sr. Business Solutions Manager E: jortiz@ohiocul.org
Contact Us

Other Movement News

Government Affairs

League advocates for “clean” NDAA funding bill

In a gridlocked Congress, must-pass federal spending bills open an opportunity to accomplish policy initiatives that can either promote or inhibit credit unions from serving their members. That’s why the […]
Regulatory

Ohio shows united opposition to debit interchange rule

Cards, compliance, and cybersecurity all have a cost, and that is why the League submitted a comment letter expressing serious concern and vehement opposition to the Federal Reserve’s proposal to […]
Member Benefits

Trending on Huddle: Are you a part of the discussion?

Connecting and collaborating are part of what makes the Credit Union Movement unique to financial services and continue to be a cornerstone of its collective success. The League’s online community, […]