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  • Writer's picturePhilip Paul

Unleashing the Power of Embedded Financial Products: A Path to Credit Union Growth

Guest Editorial by Philip Paul, CEO, Cotribute


In today's dynamic financial landscape, where member acquisition and retention pose significant challenges, credit unions are finding innovative solutions by embracing embedded fintech as a way to launch embedded financial products. This transformative approach not only works with existing members but also entices new ones, fostering a sustainable future for credit unions.


Philip Paul

For decades, credit unions have been known for their community-centric values, personalized service, and competitive rates. However, in an era dominated by digitalization, it has become imperative for them to harness technology to remain competitive and expand their member base across their local ecosystem. Embedded financial products offer a compelling means for credit unions to open new accounts and bolster their deposits and loans, breathing new life into their mission.


Embedded fintech, in essence, involves the integration of embedded deposit and loan products into non-financial products or services. By embedding deposit and loans products into their local ecosystem of existing digital channels and partner’s digital properties, credit unions can provide a banking experience that is more convenient and personalized, thereby attracting fresh faces and motivating current members to consume financial products at their highest point of interest.


Digital account opening makes it easier for prospective members to securely open accounts online. Credit unions can use configurable templates for digital deposit and loan products to expedite the processes for consumers and small businesses.


At a time when traditional digital marketing costs are going up, embedded digital products allow credit unions to leverage the power and context of their partner’s network. As examples, emergency savings accounts with matches can be offered to an employer, a student loan product can be offered inside the student portal of a local university and small business checking accounts can be offered inside a chamber of commerce digital media. This allows credit unions to create new channels for their products and services that leverage the trust and relationships that they enjoy in their local community.


Credit unions, recognized for their ties within the community, can further leverage embedded fintech to craft tailored community-focused products and services that cater to local needs. For instance, they can extend checking and deposit accounts to small businesses, especially those with members involved in the gig economy. By responding to the specific needs of their community, credit unions can attract new members and deepen relationships with existing ones.


Collaborating with fintech companies broadens the array of financial products and services credit unions can offer. This can encompass deposit switching and funding, cross-selling opportunities and personalized loan consolidation capabilities. These partnerships empower credit unions to compete on equal footing with traditional banks and other financial institutions, ultimately boosting deposits, increasing loans and improving their margins.


Embedded fintech and embedded financial products could be a key new channel for credit union growth. By embracing these solutions, credit unions can unlock the doors to new accounts, attract fresh members and stimulate higher deposits. Offering a more convenient and personalized member experience, credit unions can distinguish themselves from traditional banks and other financial institutions, ultimately drawing in a new wave of members seeking an innovative and trusted banking experience.


The future of credit unions is bright, as they harmonize their time-tested community values with cutting-edge fintech. In doing so, they not only ensure their continued relevance but also create a platform for sustainable growth, solidifying their role as a vital pillar of the financial services industry.

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