By Guy Messick
Consumer expectations of service levels are rapidly changing. Small-dollar unsecured loans are applied for and funded within minutes from a mobile device. Mortgage loan underwriting is done in a day or two. Person-to-person payments can be made while on a camping trip in the woods. COVID has made virtual service delivery systems a “must have.”
Where does a credit union go to find service solutions that will enable the credit union to remain competitive?
Searching for these solutions on your own and verifying the qualifications of the vendors requires significant staff time. Even if the credit union dedicates the staff time, how does the credit union know there was not a better solution out there? If you are lost, it is reassuring to find a path but how do you know it is the right path? You need a knowledgeable guide.
As general counsel to NACUSO, I searched for such a guide for credit unions. I discovered Bankable Fintech, an independent company that was formerly a division of Bankrate. Kim Fraser is the CEO. Bankable Fintech has extensive and proprietary data on over 16,000 national and international fintechs, including the solutions they offer and their performance and core data system integration capabilities.
No Cost to the CU
How is our guide paid? There is no cost to the credit union. When the financial institutions contract with the fintechs through Bankable Fintech, the fintechs pay a revenue share to Bankable Fintech. Since all the participating fintechs agree to the same revenue sharing terms, Bankable Fintech does not have a bias of which fintech solution is selected. When more than one financial institution selects fintech provider, Bankable Fintech often uses the economies of scale to negotiate lower prices and better terms for the financial institutions.
The information flow is two ways. Credit unions learn about the capabilities of fintechs and fintechs learn what services credit unions need. If a credit union need exists that is not adequately filled by an existing fintech, the fintech community can custom make a solution. We all appreciate the difference between a custom made suit and the closest fitting suit off the rack. When multiple credit unions select a fintech, Bankable Fintech may help negotiate custom contractual terms for the credit unions.
Bankable Fintech collects information from credit unions and fintechs and matches the needs to the solutions. Pitch sessions are created where credit unions can survey possible solutions. It is the best process available today, but technology can make it much better.
The plan is to migrate the data into a robust searchable database that credit unions and fintechs can access through a subscription. The data will be updated regularly. The process of credit unions searching for service solutions and doing the first level of due diligence will take minutes instead of months. Bankable Fintech is in the process of raising capital to build and manage this technology.
'Particularly Exciting'
What is particularly exciting for credit unions is the potential for innovation and collaboration on a scale not now existing. If you have technology tools that share data and information among an extensive network of credit unions, banks and fintech service providers in real time, there will be new partnerships and business opportunities that spring from this ecosystem. The tons of shared data will enhance data analysis capabilities.
Fintechs will develop solutions tailored to the specific unmet needs of credit unions. There is no doubt that innovative services will emerge from this shared marketplace with services and capabilities that do not exist today.
The process is much like baking a cake. You start out with a variety of ingredients that do not look anything like a cake (flour, sugar, salt, eggs, butter, milk, baking powder and vanilla extract). You gather them up, mix them together and add some heat and presto, a metamorphosis occurs. A delicious cake emerges from the oven. Whoever baked that first cake revolutionized the way birthdays are celebrated.
Baking a cake and building an interactive platform are not new territories for our guide. While working at Bankrate, Kim built similar marketplaces. Kim combined proprietary payments data with data from both Intuit and Plaid as an early beta test. The test involved creating a single platform with technology components to greatly enhance the use of the data.
The results were amazing. The collaboration brought down the time to perform complex data analysis while significantly increasing the effectiveness of the data analysis. But you had to be a top-tiered financial institution and technology company to afford to play in that game. Bankable Fintech offers the collaborative means through which the rest of us mere mortals can acquire the same tools and benefits.
If you want to learn more about Bankable Fintechs or cakes, reach out to Kim Fraser, kim@bankabledomain.com, 626-733-2939.
Guy A. Messick is an attorney with Messick Lauer & Smith PC and general counsel to NACUSO.