Credit Unions Can Expect Continued Change with Fintech Disruption

NAFCU Attendees Learn Key Strategies to Embrace Startup Technology

HONOLULU – Credit unions should expect continued shifts in the financial and insurance technology startup environment in the coming years, said CMFG Ventures’ president, Brian Kaas. CMFG Ventures is the venture capital arm of CUNA Mutual Group. Kaas presented on financial technology trends and what credit unions can do to embrace the evolving disruption at the National Association of Federally-Insured Credit Unions’ annual conference, yesterday.

Digital channels and the sharing economy continue to fuel technology disruption across all industries, particularly in the financial services sector. According to Accenture, approximately 80 percent of millennial consumers prefer receiving investment advice digitally rather than in-person.1 In addition, 43 percent of car-owning millennials believe car ownership is a hassle, according to Nerdwallet.2

These shifting dynamics in consumer preferences are driving investment activity and new industry partnerships. “Billions of dollars have already been invested in fintech startup companies,” said Kaas. “Now, leading financial players are actively seeking venture capital investments and partnerships with emerging companies, indicating continued change is on the horizon for the financial service industry.”

Kaas told audience members there are large implications for credit unions as they look to grow and add new members, especially when delivering a superior member experience in the digital era. Consumers expect simple and instantaneous service, making an omnichannel member experience imperative for credit unions to succeed.

Launched in 2016, CMFG Ventures was created to help credit unions meet the needs of modern consumers across all life stages, by addressing gaps in technology and resources. CMFG Ventures has invested more than $45 million in startup investments for eight portfolio companies, including MortgageHippo and ForeverCar.

Kaas shared insights from leading the corporate venture capital arm, including the importance of being immersed in the community and building a positive investment reputation in the marketplace. “Venture capital investing is about building a win/win relationship with a young company – not just an infusion of capital. You need a strong stomach, and should be prepared to walk with startups in their journey,” said Kaas. Kaas concluded the presentation by sharing recommendations on how credit unions should respond to the growing technology disruption. He encouraged credit unions to become educated on and seek out mutually beneficial strategic relationships with both industry partners and startups, and keep an open mind to the new and sometimes unconventional startup ideas. However, credit unions should remain cautious when negotiating agreements with eager young companies, and seek validation from industry experts, startup customers, other credit unions, and CMFG Ventures.

“Instead of seeing these industry changes as disruptive, we should look at them as opportunities for collaboration,” said Kaas. “This space can be very overwhelming, but we are excited to help credit unions leverage these opportunities to be relevant to their members for years to come.”

For more information, please visit: www.CMFGVentures.com.

About CMFG Ventures:

CMFG Ventures, LLC is the venture capital entity within CUNA Mutual Group that focuses on strategic, early-stage investments in the credit union, financial services, and insurance industries. Additional information about the company can be found at www.cmfgventures.com.

About CUNA Mutual Group:

CUNA Mutual Group helps people plan, protect and invest for their future – regardless of their financial standing. The company was founded more than 80 years ago by credit union leaders who were looking for an insurance partner they could trust. Today, CUNA Mutual Group helps credit unions and hardworking Americans build financial security through commercial and personal insurance products; lending and payment security solutions; and risk management, retirement, investment and marketing services. Additional information about the company can be found at www.cunamutual.com.

CUNA Mutual Group is the marketing name for CUNA Mutual Holding Company, a mutual insurance holding company, its subsidiaries and affiliates. Life, accident, health and annuity insurance products are issued by CMFG Life Insurance Company and MEMBERS Life Insurance Company. Corporate headquarters are located in Madison, Wis.

1 Accenture, “2016 North America Consumer Digital Banking Survey,” pg. 9, 2016; 2 Nerdwallet, “Millennials Say Cars a Costly Hassle, but They Still Want Them, Survey Finds,” Sept. 13, 2016.

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