Investing in fintech. (Source: Shutterstock)
Dear Editor,
I just read the Sept. 18 article "Big Banks Poised for Growth at Expense of Smaller Institutions: J.D. Power," and I couldn't help but want to scream out: "WE ARE DOING SOMETHING ABOUT THIS!" Big banks are investing heavily in fintechs, and unfortunately, it's working. This saddens my heart as I thought the Occupy Wall Street movement was to be a pivot point for millennials.
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But their investment is precisely why Filene Research Institute has partnered with CMFG Ventures, the venture capital arm of CUNA Mutual Group, and launched the Fintech Catalyst Incubator this summer. This isn't a plug for anything, but rather a desperate need to bring more awareness to credit unions that there is something they can easily do to go bigger into the fintech game, and that the bad news for credit unions described in the article doesn't have to be the end of the story.
The Fintech Catalyst Incubator tests fintech products, concepts and services that could fill system gaps and create new opportunities for credit unions to innovate and grow. Filene is building a coalition of innovation-minded credit unions that want to combat the big bank fintech investment and better serve their members.
Each fintech product or service is tested by a group of up to 12 credit unions of varying asset sizes, locations and consumer demographics for six months. From testing artificial intelligence or machine learning to digital payment technologies, these credit unions get a head start on bringing needed solutions to their communities and can shape final outcomes by sharing feedback and insights throughout the testing period. Research findings, including next steps and launch recommendations for viable products, will be published by Filene upon completion of the testing period.
In fact, we just completed our first test of a unique consumer contract from an organization called Align around Income Share Agreements. It is an alternative lending option that is based on a percentage of someone's future earnings that is currently available in seven states. It's an interesting alternative to help keep members away from payday or predatory lenders. The results of our work with them can be found at filene.org/485.
Filene and CMFG Ventures are not sitting still, and neither should credit unions. Please spread the word and help us get more credit unions involved. They can learn more about products being tested and how to get involved at filene.org/fintechcatalyst.
Ryan Foss Ryan Foss
Senior Director of Incubation
Filene Research Institute
Madison, Wis.
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