The COVID-19 pandemic expedited the transition of credit unions towards digital channels, emphasizing the need for a comprehensive fintech strategy
Open banking, facilitated by APIs, allows sharing of financial data among credit unions, third-party providers, and consumers, enhancing personalization and user experiences
Major financial institutions are spearheading the open banking movement, promoting data exchange to retain customers and explore new opportunities, especially in real-time payments
Embedded fintech integrates fintech products into credit unions' online platforms, mobile apps, and workflows, creating new revenue streams and enhancing customer relationships
Embedded finance takes two forms - integrating financial services into non-financial companies' products or collaborating with credit unions to offer financial services to members
Citigroup and JPMorgan Chase demonstrate successful embedded finance solutions, offering financial products within their retail and digital platforms
Credit unions are adopting BaaS, sharing data and infrastructure with nonbanks to source deposits and revenue, especially beneficial for institutions with assets under $10 billion
Before implementing embedded finance, credit unions should align their approach with long-term financial goals, conduct member assessments, and evaluate infrastructure and tech architecture
Credit unions should consult with regulators to ensure compliance with laws like the Bank Secrecy Act and Truth In Lending Act when pursuing BaaS partnerships
Embedded finance can assist secured payments for gig workers, professional service firms, and third-party finance companies, potentially deepening ties with existing members or attracting new ones