VentureTech 2025: Small CUs Leverage Tech in a Big Way
- John San Filippo
- 1 day ago
- 3 min read
By John San Filippo
As in past years, the eighth annual VentureTech conference, held Nov. 3-5 in Frisco, Texas, focused on giving fintechs the opportunity to present their product pitches to a technologically savvy credit union audience. However, the pitch sessions were broken up by several informative presentations and panel discussions. Among them was one called “Small Credit Unions Who Do MORE with Fintech.” In this session, Barb Lowman of CUNA Strategic Services, spoke with Elaine Thompson, CEO of $102 million Seaport Federal Credit Union, and Melanie Kennedy, CEO of $86 million Southwest Financial Federal Credit Union, about their institutions’ use of technology.
Going Fully Digital at $86 Million
Lowman first spoke with Kennedy, whose 7,800-member credit union has undergone a complete transformation over the last several years. Today, Southwest Financial is 100% digital, cashless, has no brick-and-mortar branches, and operates with a 100% remote staff.
This shift, Kennedy explained, was not a sudden reaction to the pandemic. Instead, it was a strategic move initiated by her board of directors back in 2015. “[My] board said, ‘Hey, when your lease expires in April of 2021, we want to be a non-walk-in facility,’” Kennedy recalled.
After years of planning, the credit union was finalizing its move when the pandemic hit, accelerating the timeline. Kennedy noted that two key fintech implementations made the full transition possible: adding Docusign in January 2020 and, crucially, implementing the Allpoint surcharge-free cash deposit network. “That was the last missing piece,” she said.
The results have been overwhelmingly positive. Kennedy said her “membership hasn’t missed us at all,” as they can still access all services by phone, text, email, and secure messaging. The impact on her team has been “phenomenal,” leading to higher quality of life, low turnover, and being ranked the #1 best credit union to work for in both 2023 and 2024.
Finding a Niche in Money Service Businesses
Elaine Thompson then shared how her 5,600-member Seacoast Federal Credit Union built a unique and profitable niche serving money service businesses (MSBs). As Lowman explained, MSBs—such as local bodegas that help customers wire money to their home countries—are often “underbanked” and have trouble finding stable relationships with financial institutions.
Thompson said the initiative began more than 12 years ago when a fintech startup needed a small institution to pilot its compliance software. Seacoast agreed. “We were nervous in the beginning,” she admitted, citing the high compliance burden. “So, we took our time. We were very conservative. We had one MSB for many years as we really worked through the software with the company.”
Today, that careful work has paid off. Serving MSBs has become a “great alternative source of income” for Seacoast, generating significant non-interest income from tiered fees, wire fees, and onboarding fees. This income, in turn, helps the credit union fund its other growth initiatives.
The key, Thompson stressed, is the technology partner. The software tracks all MSB licenses, audits, and alerts. It also allows Seacoast to “know my customer’s customers” by breaking down large deposits to their source. “I can give you a breakdown if it was 100 people, if it was 10 people... It makes [examiners] feel more comfortable and we feel more comfortable,” she said.
Big Lessons and Future Opportunities
Thompson noted that Seacoast currently serves 15 MSBs and has “20 to 30 already on the list to onboard.” The demand is so high that her next step is to build a CUSO to handle the back-office compliance and operations for other credit unions that want to enter the MSB space.
When asked for the most valuable lesson learned, Kennedy advised attendees to be open-minded. “Don’t underestimate where you might find your next partner,” she said, revealing that Southwest Financial found its current texting partner from an ad on a Game of Thrones podcast.
Thompson echoed that sentiment. “Think outside the box,” she urged. “Don’t be afraid to go outside the box. Just do your due diligence.”
To conclude the session, Lowman asked each panelist for one word to describe the value of their fintech relationships.
Thompson’s word: “Opportunity.”
Kennedy’s response: “Invaluable.”
