By W.B. King
Similar to the way consumers access the Apple App Store or Google Play Store for the latest tech offerings, Pyramid Federal Credit Union is introducing a new tech access platform to its 17,000-plus members.
“Technology and member expectations continue to quickly change, making it difficult to keep up with as a community institution,” Pyramid Federal Credit Union CEO Ray Lancaster told Finopotamus. “And, meeting member needs while prioritizing security and privacy concerns continues to be a delicate balancing act.”
After vetting a host of vendors in hopes of finding the right fit, the $240 million Tucson, Ariz.-based Pyramid Federal Credit Union selected ASA. The company offers an ecosystem connecting fintechs and financial institutions.
“ASA solves for these pain points by providing our members with fast, easy access to a wide range of technology to power their financial journeys through an experience…all without having to share any sensitive data,” Lancaster said.
Balancing Innovation, Risk and Security
Landon Glenn, CEO and founder of the Provo, Utah-based ASA Technologies, Corp., told Finopotamus that credit unions are often challenged with “striking the right balance between innovation and risk” when approaching fintech partnerships.
“With ASA’s collaborative banking model, regulatory risk and security concerns are eliminated because credit unions aren’t sharing any sensitive data; it’s all anonymized and tokenized,” he said, adding that there are 25 fintechs that are currently in various stages of integration into ASA’s ecosystem.
“Fintech partnerships are made easier and more affordable, allowing credit unions of all sizes to innovate and compete like never before,” he said.
When asked to further address privacy and security concerns relate to the offering, Glenn explained that ASA’s certification process vets fintechs. If a fintech is deemed unworthy, it is not added to the ecosystem.
“Because ASA acts as a single integration point into an institution’s core and then tokenizes credentials and anonymizes all personally identifiable information (PII) data, no sensitive information is shared with the fintechs, reducing risk and eliminating security concerns,” he continued. “Think of it like the [Apple] App Store for institutions’ account holders: They can select and instantly download the apps that meet their individual needs and link the services to their banking account, all while maintaining complete control of their data and finances.”
CUs Can Make Money from Fintech Partnerships
Pyramid Federal Credit Union is one of 11 ASA clients. Lancaster explained the two parties signed the contract in May 2022. ASA is currently working with the credit union’s data processor to establish the interface, he noted.
“Because ASA will integrate with our core and then tokenize credentials and anonymize PII, fintechs won’t have any information about the member – not a name, email address or account number,” Lancaster said. “This eliminates liability and risk concerns and puts the member in the driver’s seat when it comes to what data they share and with whom.”
In most cases, Glenn said to fully integrate with new core partners takes three to four months, depending on how quickly the parties are able to act.
“Once we have a core integrated, adding a new credit union on that same core is relatively fast and can be done in as little as three to four weeks,” Glenn noted. “We do have a period for the credit union to test internally and make sure the ASA Vault and fintech apps are all working properly before we do the full rollout to the entire membership base.”
Once the solution goes live in the coming month or so, Lancaster said Pyramid Federal Credit Union employees and members will be able to share feedback related to fintechs in the marketplace. “If we find a fintech we like, we can work with ASA to add them to the marketplace. We can also develop or co-develop our own technology and add that to the marketplace.”
Glenn expanded on this collaborative feature, explaining that there are numerous ancillary benefits.
“Credit unions have a back-end portal where they can see all of the current fintech offerings and they can even pick their preferred app solutions that they want to appear at the top of the ASA Vault marketplace,” he said.
“Credit unions can check the newest fintechs, usage, and adoption in their backend login with ASA,” he added. “In addition to simply being aware of the fintechs, the ASA model actually enables credit unions to make money from fintechs.”
Monies can be made by credit unions alerting fintechs as to what types of new business they’re looking for, which provides the opportunity for fintechs to bring business opportunities to credit unions, he noted.
“This is reverse embedded finance – leveraging fintech to bring new members to financial institutions and accelerate growth for both parties,” Glenn said.
For those credit union executives looking at similar services, Lancaster’s advice is to consider what will allow the credit union to “keep up” with technology innovations without weighing staff down with “costly and time-consuming one-to-one vendor” due diligence.
“Remember that privacy and security will continue to be top priorities and concerns in the space,” he said. “Think about what your credit union needs not for just right now, but what will help you grow and thrive in the future.”
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