Credit unions connect members to fintechs

Both banks and credit unions have struggled to maintain and satisfy customers and members. Many customers now expect sleek digital services across the board, which traditional financial institutions may struggle to deliver. As a result, loyal bank customers may turn to fintechs and neobanks that can provide innovative tools such as personalized financial management, early paychecks, app integrations and more.

These fintechs have another leg up on traditional financial institutions as well, as they often don't have to deal with as many regulations, which can make innovations more difficult. In addition, with growing concerns over security, banks and credit unions are struggling to both innovate while keeping customer data secure.

"Keeping up with technology's rapid change — and member expectations — can be difficult as a community credit union," Ray Lancaster, CEO of Pyramid FCU, said in an email interview. "Plus, balancing member needs versus privacy continues to present challenges. We value our members sensitive information and are always hyper aware of protecting their data."

So how can banks keep up fintechs? One way is to provide fintech services to customers directly. One company, ASA, is offering a solution for credit unions and banks to connect customers directly to fintech services, while tokenizing member data to keep it secure.

"Financial institutions are challenged with striking the right balance between innovation and risk when it comes to introducing new technology and partnering with fintechs," Landon Glenn, CEO and founder of ASA, said in an email interview. "This can be especially challenging for community institutions, who do not have the large tech budgets of regional and national players; they have to get it right the first time. ASA makes fintech partnerships easier, more affordable and more secure than ever before, allowing community financial institutions to innovate and personalize experiences at scale for each individual they serve."

Pyramid FCU utilized ASA's SafeGuard solution that allows customers to share anonymized data with fintechs. Since the data is tokenized, customers don't have to worry about any private information going to fintech companies.

"Today, consumers have no choice but to give up access to their sensitive information such as bank accounts, email addresses and social security numbers to access fintechs," Glenn said. "Because ASA integrates with the institution's core and data aggregators and then tokenizes credentials and anonymizes PII data, users can now try any technology they want in a safe, compliant way without compromising their information."

The overall goal of the service is to create an app-store like experience, where customers can select from a variety of potential fintech apps to integrate with their bank accounts, like adding apps to a smart phone. Pyramid FCU chose the solution in particular to provide personalized experiences for its members.

"ASA's technology will allow us to deliver new and exciting technology to help members manage their entire financial journey via an 'Apple App Store' type of experience, without requiring them to share any sensitive data," Lancaster said. "We can leverage third-party vendors without having to integrate each new app, meeting members needs in a secure, compliant and cost-effective way. We believe this will help us enhance the member experience, providing flexibility and choice to members without compromising their personal information."

Since customers can access a wide variety of fintech apps, they can craft a banking experience that best fits their needs.

"One of the great things about ASA and the collaborative banking model is that no two member's app selection is likely to look the same. From PFM to investing to rewards apps, the sky is the limit," Lancaster said. "We will be able to provide a personalized member experience while enhancing the relationships we have built."