Embracing open banking for collaboration with fintechs
Credit unions and members benefit from making data sharing possible.
This article was originally posted in CU Management. You can read the original here.
While the word “collaboration” is not often used in the financial industry these days, it is key to the future of banking. Credit unions are no strangers to collaboration. Whether it is employees are working together internally to serve a member, staff and board members gathering to support a community event or your team learning best practices from a local association, credit unions understand the need to embrace collaboration.
So, what if credit unions joined forces to collaborate with the leading and emerging fintechs? What if, through cooperation and collaboration, a credit union could build and improve on a great innovation? Furthermore, what if you could offer a specific product or solution set that is tailored to meet the unique needs of your diverse membership?
In open banking, members can allow their credit unions to share their personal information with approved third-party solution providers. As a result, members receive a more connected and holistic experience from their credit union and third-party banking apps. These apps could be well established and widely used, like Venmo or Mint, or from a new provider. In every case, these apps should be implemented in a way that empowers the credit union to be more nimbly, and able to fulfill a specialized or less widely-sourced need.
Remember Apple’s old slogan, “There’s an app for that?” Well, there is. And now, through open banking, credit unions can meet needs with specialty providers of fintech apps to create an experience that is personalized according to members’ needs—all based on the established relationship with their trusted credit union.
When members permit data sharing, the credit union will also benefit from information that comes back from third-party vendors. This data can be analyzed to create a more complete profile of the member, allowing the credit union to create targeted marketing, as well as new educational, and cross-sell opportunities. Members further benefit by only receiving offers and messaging when pertinent and applicable.
If there is one thing financial institutions agree on, large or small, bank or credit union, the ability to collaborate with third-parties on products and services is one of the biggest benefits of open banking. In the end, credit unions will triumph not because open banking makes them more innovative, but because they have access to more innovative and specialized solutions. This will allow for a more finely tailored experience, creating competitive differentiation for the credit union and a more personalized experience for account holders. Embrace open banking to bring back a personalized and collaborative touch to the digital banking experience.
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