BOWLING GREEN, Ky.–Credit unions gathered here got an update on the importance of real estate—in this case, digital real estate, courtesy of CMFG Fintech Solutions.
Ronny Chapman, SVP-fintech solutions with the company that is a venture capital arm of CUNA Mutual Group, offered insights into what the company is doing in the digital space as it looks to build out solutions and fintech partnerships and help credit unions to better compete and grow.
CMFG Fintech Solutions actually has more than 5,500 financial institution clients, including credit unions, banking and farm credit organizations.
Chapman posed numerous questions for attendees at the Kentucky Credit Union League’s Executive Forum, chief among them, “How many people see your digital real estate?”
It’s an important question in a landscape in which consumers want easier access to financial solutions and when credit unions and other FIs are competing with online retailers, he explained.
Lenders, he said, are too remote from the online buying experience. That’s because buyers are increasingly borrowers and are presented with finance options within what he dubbed the “purchase event.”
Presenting those finance offers are the major players such as Amazon, Apple, Walmart and more, which creates the growing challenge to credit unions, he told the meeting.
The Key Words
“The key words here are the borrowing experience, not the buying experience,” Chapman said. “I believe the buying and borrowing events are coming together and will never be apart again.”
There are multiple places in the process where credit unions must drive a stake, according to Chapman, and among them is the concept of "trust," whch plays out in different ways. For example, he noted Costco says price is its most trusted asset, and when customers see a price at Costco, they just trust it’s the best price.
“Trust is their superpower. The counter is Amazon. Who trusts Amazon? Is (price) their superpower? I think their superpower is convenience,” said Chapman. “The mantra for (CMFG Fintech Solutions) has become serving credit unions as Costco serves its members. We use the word e-commerce a lot. E-commerce is at the root of everything we are trying to build here.”
Key Tenets
The key tenets of CMFG Fintech Solutions, according to Chapman, are:
- Acquire and manage digital real estate
- Leverage its invested partners to provide vertical solutions
- Eliminate project fatigue (“This is really top of mind with us. We know as fintech we create a lot of the problems for you.”)
- Reduce human intervention
- Utilize embedded finance as a channel
- Meet the member where they are
- Leverage member trust
Digital Real Estate Zoning
Chapman told his audience it’s important to understand what he called “digital real estate zoning.”
The “homestead,” for example, is the home page.
“You can do what you want here, but one thing that’s very important is that almost everything we do today is on the phone,” Chapman said, emphasizing that the way digital content and functionality is served to the member needs to be optimized for that mobile environment.
Chapman said the real challenge for credit unions lies in what he called “rented real estate.” That’s a reference to digital environments over which credit unions have no control.
“We have a long way to go here, but this is where we think we have the most opportunity in getting them back to the credit union when they need a financial service,” he said.
Change Thought Process
Chapman encouraged credit unions to move their thought processes away from the idea of “products” and to instead think in terms of “where are we selling?”
Moreover, he said credit unions still have a “lot of work to do” with their existing 135-million-plus members before they turn their attention to new members. Ultimately, he said, the objective is to ensure members don’t have to go anyplace else to fill their needs.
To that end, he said CMFG Fintech Solutions has been exploring options with companies such as electric vehicle manufacturers to tap the “aggregate power” of credit unions and to offer those companies a single touch point, rather than having those companies attempt to partner with 4,700 individual CUs. He said the manufacturers are coming to understand the huge presence of credit unions, reminding that Costcohas “just” 50-million members, and it sells 800,000 vehicles per year.
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