Strategic value doesn’t justify overpaying. If anything, strategic investors should demand better terms than financial investors because we bring more than capital. We bring scale, validation, distribution, and product insight. When we let fintechs treat us as just another check, we underprice our own value.

Credit unions of all sizes and stripes have long invested in fintech and other ventures through CUSOs, venture funds, and other structures. The savviest of these member-owned financial cooperatives use these investments to improve member experiences, strengthen operations, and shape the future of financial services.

The result is credit union fintech investment strategy approach that is grounded in mission as much as market opportunity. Ben Lemoine, CFO at Suncoast Credit Union ($20.5B, Tampa, FL) and board treasurer of Suncoast LaunchPoint Ventures (SLV), shares how the team evaluates opportunities and measures results in its approach to fintech investments and other partnerships.

How does Suncoast Credit Union approach fintech innovation and investment?

Ben Lemoine: SLV is our innovation and diversification platform. It’s Suncoast’s wholly owned, CUSO-holding company for our subsidiary businesses, partially owned ventures, and fintech investments.

Our role is to deploy capital intelligently. Sometimes that means building, sometimes acquiring, and sometimes investing alongside other strategic partners.

Through SLV we identify, acquire, and manage business ventures that align with the credit union’s mission and generate member value.

Our current SLV portfolio includes wholly owned independent businesses — including an insurance agency, title company, and realty company that have served members for decades; a growing fintech investment portfolio focused on technologies that enhance member engagement, payment experiences, financial wellness, and operational efficiency; and new investment and acquisition opportunities across insurance, real estate, lending, and technology.

We approach fintech innovation with discipline. The best partnerships happen when timing and fit align.

How are credit unions approaching fintech investment? Future Bets explores how leaders balance immediate needs with longer-term bets, evaluate potential partners, and define success alongside mission and member value. Read the series today.

When choosing what to invest in, how do you balance your day-to-day business needs with longer-term strategic goals?

BL: In general, we love for SLV to invest in businesses the credit union will onboard as a service and create that alignment. Both pain-point investments and strategic bets have a place in our portfolio, and we deliberately balance the two. We’ve structured SLV to give us flexibility to pursue both.

For near-term priorities such as fraud, lending efficiency, onboarding, and member engagement, we’re often better served through vendor relationships or partnerships rather than equity investments. Vendor relationships offer clear ROI, defined SLAs, and exit flexibility. Equity investments commit us to a longer journey with less certainty.

For strategic bets, we look for opportunities where our scale — more than 1 million members and a strong Florida presence — makes us a valuable partner beyond the capital we contribute. When we invest, we’re committing to deploying, validating, and helping to shape the product.

When the two compete, strategic fit and timing tend to win over urgency. We’ve passed on investing opportunities that solved real, near-term problems because the structure, valuation, or timing didn’t work. We’d rather solve a near-term problem through a vendor and invest strategically when the right opportunity emerges.

What does success look like for a fintech investment? How does purpose play a role in your definition of success?

BL: Success for us is multi-dimensional, and it absolutely differs from a typical vendor relationship. For fintech investments, success requires three things to align. First, strategic value. Did the partnership create capabilities, insights, or member experiences we couldn’t have built or bought alone? Second, mission alignment. Did the investment ultimately serve members and the credit union movement or just produce financial returns for the institution? Third, financial return. Did our capital generate appropriate risk-adjusted returns, recognizing this is venture-style risk?

Purpose plays a significant role. An investment that produces strong returns but doesn’t benefit members or the credit union ecosystem would be a hollow success. An investment that improves member outcomes can still be a meaningful win even if the returns are modest.

We measure success through a balance of financial metrics (IRR and dividends), strategic metrics (capabilities gained, member adoption, network effects), and mission metrics (impact on the broader credit union community).

What’s one lesson you’ve learned about bringing along internal teams?

BL: Don’t underestimate the operational bandwidth required to evaluate, integrate, and benefit from a fintech investment.

It’s easy for executives to get excited about an investment opportunity, but execution depends on teams who already have full plates. If an investment requires technology integration, deployment, compliance review, and member experience design, and your teams are deep in other initiatives, the investment becomes a source of frustration rather than value.

Before committing capital, we ask whether we have the bandwidth to deploy it and capture value. If not, we should delay the investment, scope down our involvement, or pass entirely.

When we do commit, we align internal teams early. Investments work best when the people who will ultimately use, integrate, or evaluate the technology have a voice in the decision, not just executive leadership.

What’s one thing you’ve gotten wrong or would do differently if you started over today?

BL: Discipline on valuation, particularly for strategic investments. Early on, there’s a tendency to view strategic investments differently from financial ones, to say, “This is strategic, so we don’t need to be as disciplined on valuation.” That’s a mistake.

Strategic value doesn’t justify overpaying. If anything, strategic investors should demand better terms than financial investors because we bring more than capital. We bring scale, validation, distribution, and product insight. When we let fintechs treat us as just another check, we underprice our own value.

We approach every investment with the same valuation discipline regardless of strategic narrative. If the valuation is too rich, we might walk away. Strategic partnerships should reflect what each party brings.

What’s one thing fintechs consistently misunderstand about working with credit unions?

BL: Credit unions are not just smaller banks, and we don’t make decisions on the same timelines or for the same reasons.

Fintechs often approach credit unions with a bank sales playbook: heavy emphasis on technology features, competitive positioning against incumbents, and pressure to close quickly. That misses what actually drives credit union decisions.

We’re member-owned, mission-driven institutions. Decisions are made through committees and boards composed of members and community representatives, not just executives optimizing for shareholder returns. We often move more slowly than fintechs would prefer because we’re focused on serving members well.

We also operate in a regulated environment with NCUA oversight. Compliance, privacy, and risk management are foundational. Fintechs that treat regulatory requirements as obstacles rather than design constraints will struggle to scale in our market.

The best fintech partners understand this and design their go-to-market accordingly. They engage early, build relationships before they need them, and respect the governance processes required to make sound institutional decisions.

What’s one piece of advice you’d give a fintech about how to partner with credit unions?

BL: Build for the long term, not to close the sale.

The fintechs that succeed treat partnership as the beginning of a relationship, not the end of a sales cycle. They understand how credit unions operate, account for the work required to implement new solutions, and help solve problems even when there’s no immediate revenue in it for them.

Aside from that, lead with member value, not technology features. We don’t get excited about AI or platform architecture. We get excited about how you help our members live better financial lives. Translate your value proposition accordingly.

Be transparent about your business model and financials. Credit unions evaluate partners based on long-term stability, not just innovation. If you’re growing fast but burning cash, explain your path. We can’t make good partnership decisions without understanding your trajectory.

Finally, engage the credit union ecosystem, not just individual institutions. The credit union movement is collaborative by nature. Build relationships through CUSOs, peer networks, and industry organizations.

This interview has been edited and condensed.

The post Fintech Grounded In Mission As Much As Market Opportunity appeared first on CreditUnions.com.

If the fintech has what appears to be a novel idea, we’ll bring it back to WSECU for consideration. We’re often surprised by ideas we hadn’t considered yet, meaning we didn’t realize a pain point even existed until we investigated it further.

Washington State Employees Credit Union ($5.1B, Olympia, WA) began its venture into fintech investing in classic financial cooperative fashion: standing up a new way for members to access responsibly priced and managed short-term loans.

Now the Evergreen State institution has evolved from building and operating its own CUSOs —  including the payday-loan alternative pioneer QCash Financial and a mortgage origination and servicing company — to investing through a dedicated CUSO holding company that backs innovative ventures focused on helping credit unions solve member and operational challenges.

Paul Kirkbride, chief operating officer for WSECU and CEO of its CUSO holding company, One Washington Financial (OWF), shares how the organization approaches fintech investment and partnership.

How does WSECU approach fintech innovation and investment?

Paul Kirkbride: WSECU got started in the CUSO/fintech space with QCash Financial, which offered a payday loan alternative product for credit unions. The solution started as a loan product built specifically for WSECU’s members, but we soon expanded it to dozens of other credit unions through a CUSO. We also owned a mortgage origination/servicing CUSO for several years.

We exited both of those in 2023 and stood up OWF our holding company, to make investments in CUSOs that solve credit union pain points in new and innovative ways.

How are credit unions approaching fintech investment? Future Bets explores how leaders balance immediate needs with longer-term bets, evaluate potential partners, and define success alongside mission and member value. Read the series today.

When choosing what to invest in, how do you balance your day-to-day business needs with longer-term strategic goals?

PK: Technically, OWF’s main charge is to extend WSECU’s current strategies through our CUSO investments, but we go beyond that now given today’s rapid pace of change and fluid expectations.

If the fintech has what appears to be a novel idea, we’ll bring it back to WSECU for consideration. We’re often surprised by ideas we hadn’t considered yet, meaning we didn’t realize a pain point even existed until we investigated it further.

We haven’t struggled finding a balance between “run the business” and “future bets,” and having a good balance helps to diversify our risk.

What does success look like for a fintech investment? How does purpose play a role in your definition of success?

PK: Success means you’re solving a credit union or member pain point — current or future — and the CUSO can achieve a strong financial return when compared to alternative investments. We’d call this direct value. We also look for indirect or intangible value, such as improved service scores, efficiency gains, new connections, and influence over product design.

Being a design partner is probably one of the greatest advantages to being a CUSO investor. We always seek win-win partnerships with our vendors, but being an owner gives us a chance to create added value for all parties.

Purpose is deeply important to us. We want to work with partners who are committed to working with credit unions and their members and align to our values and our industry’s values. It drives our decision-making.

What’s one lesson you’ve learned about bringing along internal teams?

PK: I could write an entire paper on this question. At a credit union, executable innovation can’t happen in a silo. You need the rest of the organization aligned to assess, approve, test, train, and launch all the great ideas you generate or discover. You also need the credit union’s leadership team, at all levels, supporting your efforts versus believing you’re competing with them for the same resources.

To help with this, we leverage the talent inside of the credit union from the start. For example, if OWF meets with a CUSO that’s solving a lending problem, we bring in our lenders. Do they think this product solves an industry problem? Will they use the product or service as a client? Does the pricing make sense? Will they champion its implementation?

It’s fun to see their faces light up over a solution that solves a real issue, and it’s also telling when they seem completely disinterested. OWF never forces a solution on WSECU. The team that owns that specific product or service lane always has the final say.

What’s one thing you’ve gotten wrong or would do differently if you started over today?

PK: Finding a way to reduce the duplication of investment due diligence and vendor onboarding requirements. Although WSECU wholly owns OWF, OWF must operate independently when it comes to decision-making, so we created our own investment due diligence process.

Throughout the review process, we’re gathering many of the same things the credit union will likely need to gather later. At first, we didn’t have a process to share that information, so our CUSOs were getting hit up with duplicate requests — first from OWF as an investor and then WSECU as a client. We wasted a lot of time.

The other thing I’d add is the need for dedicated resources, which we didn’t add until year two. If you’re hoping you can tap one of your current executives to do all this, in addition to their day job, you might be overestimating their capacity or underestimating the work. We currently have two full-time employees at OWF and are now adding a third.

Without this team, which includes Scott Daukas, our chief partnership officer, and Amy Schultz, our director of fintech engagement, I don’t think we would have made much progress. Their backgrounds — Scott having been a former credit union executive and CUSO board member and Amy having been a fintech founder — are complementary and give us added confidence in our decision-making, relationship-building, risk-taking, and performance-monitoring.

What’s one thing fintechs consistently misunderstand about working with credit unions?

PK: Credit unions can be quite slow at making decisions, working through contracts, and implementing new solutions. Some of this is risk aversion, some relates to being overloaded — trying to do too much — and some of this is simply a prioritization issue. Long sales cycles, followed by long implementations.

Founders, on the other hand, are accustomed to a faster pace, with rapid decision-making, higher risk tolerances, and fewer distractions. So, when just starting out in our industry, they’re often surprised and frustrated by what they encounter.

And if they need to show traction quickly — signed clients and revenue — that pressure can be rough on them, and in turn, they might begin to pressure the credit union to move faster. That rarely helps the situation, and it can damage the relationship.

Of course, credit unions do need to move faster — we’ve invested heavily in doing that at WSECU — but founders also need to understand credit unions are highly regulated, with lots of moving parts and several concurrent priorities. Both sides need to be realistic from day one about timelines.

By the way, credit unions often misunderstand fintechs, too. When I asked Scott for his thoughts on this, he said, “Credit unions need to have strategies, systems, and frameworks in place long before engaging with a fintech, as the absence of a fintech strategy and related preparation can lead to paralysis when a decision is actually needed.”

What’s one piece of advice you’d give a fintech about how to partner with credit unions?

PK: Be authentic, put your motivations on the table right away, and always start with your “why.” There’s a reason you do what do, and we’re investing in people as much as we’re investing in a solution. Oh, and be realistic with your projections.

This interview has been edited and condensed.

Solving the right problems requires the right strategic tools. The credit unions best positioned to act on fintech opportunity are the ones whose leadership teams share a common language for evaluating change. Disruptive Strategy for Organizations, offered by Callahan in collaboration with Harvard Business School Online, gives your team that shared framework. Learn more today.

The post WSECU Invests In Innovation To Solve Pain Points appeared first on CreditUnions.com.

It isn’t an either/or decision between solving today’s challenges and making longer-term bets. The strongest opportunities do both. We look for investments that can address immediate priorities, such as reducing fraud or improving the member experience, while also aligning with the broader strategic direction of the organization.

It’s fitting that the world’s largest university-based credit union is also a front-runner in fintech incubation and innovation. That’s the reputation Michigan State University FCU ($8.5B, East Lansing, MI) has built through The Lab at MSUFCU and its wholly owned CUSO Reseda Group.

The service organization partners with cutting-edge fintech solutions to develop an array of apps and products that include financial literacy and planning tools, sophisticated communication platforms that connect credit unions and their members, digital marketing solutions, and more.

Sara Dolan, CFO of both MSUFCU and Reseda Group, and Benjamin Maxim, the credit union’s chief technology officer, share how the organization approaches fintech investing, development, and partnerships.

How does MSUFCU approach fintech innovation and investment?

Sara Dolan: We formally launched our fintech investment efforts in 2021 with the creation of Reseda Group. Prior to that, the credit union had established an innovation team to support this work.

Ben Maxim: MSUFCU’s fintech journey began in the early 2000s with a focus on digital service, starting with a member-centric website and evolving into internally built online banking and mobile apps.

Over time, the approach shifted from primarily building in-house to partnering more intentionally with providers like Visa and Jack Henry, using those relationships to test and innovate. The Lab at MSUFCU formalized how we evaluate and pilot fintech solutions.

As those partnerships matured, many fintech companies required funding to scale, which led to the creation of Reseda Group.

Reseda was designed with a dual purpose: bring MSUFCU-built technology to market and invest in fintech partners. This model also supported diversification ahead of anticipated revenue changes tied to asset growth.

How are credit unions approaching fintech investment? Future Bets explores how leaders balance immediate needs with longer-term bets, evaluate potential partners, and define success alongside mission and member value. Read the series today.

When choosing what to invest in, how do you balance your day-to-day business needs with longer-term strategic goals?

SD: It isn’t an either/or decision between solving today’s challenges and making longer-term bets. The strongest opportunities do both. We look for investments that can address immediate priorities, such as reducing fraud or improving the member experience, while also aligning with the broader strategic direction of the organization.

BM: We built Reseda around a simple idea: we only invest in solutions we plan to use at MSUFCU. We’re not looking to make purely financial or speculative bets. We focus on partners that are directly relevant to our business and our members.

We start by partnering, not investing. Through The Lab at MSUFCU, we pilot solutions and scale what works. Continued investment depends on operational performance and adoption.

We also take an active role by holding board seats and working closely with these companies. That allows us to help shape their roadmaps and build solutions that are more practical and aligned with what our members actually need.

What does success look like for a fintech investment? How does purpose play a role in your definition of success?

SD: For us, progress is a strong indicator of success. Because we invest in solutions we actually use, success is not abstract. It shows up in how those products perform in our day-to-day operations.

We evaluate fintech partners much like any vendor: are they solving the problem and delivering the service and reliability we expect?

Where it differs is the level of engagement and alignment. With investment partners, we have a deeper role in shaping direction and success also includes their ability to grow, scale, and deliver value more broadly over time.

Financial return matters but is not the primary measure. We look at operational impact, member experience, and how well the solution advances our broader strategy. Purpose plays a key role in that. The partners we choose need to align with how we serve our members, not just what they can deliver financially.

BM: Financial return is a positive outcome, but it doesn’t drive decisions.

We focus on the value the solution brings to MSUFCU. That could be usage, contract savings, intercompany revenue, or overall impact on our members. Those things matter more to us than financial upside.

Mission alignment is also a big part of it. We want to make sure we’re investing in solutions that fit how we serve our members and where we’re going as an organization. In most cases, by the time we invest, we’ve already been a client and seen some level of traction.

If something isn’t working, we’ll step back and determine whether to adjust or unwind it. Generally, our goal is to help these companies succeed because when they do well, it directly benefits our members and the credit union.

What’s one lesson you’ve learned about bringing along internal teams?

SD: Our process has matured quite a bit over the past five years. We’ve learned to ask better questions and run stronger pilots.

BM: You can’t treat this as a side project. We’ve tried that and it only goes so far. There’s a level of commitment and focus required if you want to do this well.

At the same time, not every internal team is set up to operate in a startup fintech environment. The pace is different, the expectations are different, and even due diligence needs to reflect how early-stage companies actually operate.

Part of what we learned is that you have to be intentional about how you bring teams along. Creating Reseda as a separate structure allowed us to put the right mindset and operating model around this work so we could move faster and think more entrepreneurially without forcing that approach across the credit union.

What’s one thing you’ve gotten wrong or would do differently if you started over today?

SD: Financial services continue to evolve rapidly, creating new opportunities to serve members. If we were starting over, we would continue to focus on balancing member needs with disciplined investment decisions.

BM: I think we would be much more disciplined early on about what we chose to pursue. In the beginning, there was so much interest and so many opportunities coming our way that it was easy to say yes to too many things.

We learned not everything that looks interesting or promising fits where we need to go. Today, we spend more time making sure opportunities are aligned to our roadmap and that we have the capacity to make them successful.

What’s one thing fintechs consistently misunderstand about working with credit unions?

SD: The level of regulatory expectations and documentation required to work with a credit union. There’s a lot that goes into ensuring compliance, and it can be more complex than they initially expect.

At MSUFCU and Reseda, we try to help bridge that gap by sharing those expectations early and supporting fintechs as they navigate the process. Setting expectations early creates a stronger partnership and better long-term outcomes.

BM: How mission-driven credit unions are. A lot of fintechs come in thinking about growth, exits, and financial returns. That matters, but we’re looking for solutions that are going to be here and support our members over the long term. We’re not trying to implement something and then replace it a couple years later.

Another piece is the sales cycle. There’s often an assumption that it will move quickly, but credit unions take time. There’s a lot of diligence, a lot of alignment, and we’re going to ask a lot of questions before we move forward.

From the outside, that can feel slow. But from our perspective, it’s about making sure we get it right for our members and that we’re bringing in partners we can rely on.

What’s one piece of advice you’d give a fintech about how to partner with credit unions?

BM: Be thoughtful about how you engage and where you spend your time. Credit unions can take a while to make decisions, so it’s important to make sure you are working with people who have the ability to move something forward. If you’re not getting that signal, it’s OK to pause and come back later rather than overinvesting in a sales cycle that might not go anywhere.

Things like data, cost of acquisition, or even how value is measured can vary, and that can make it harder to tell your story if you’re expecting clean inputs.

The most effective fintechs adjust to that and speak to a few different perspectives at the same time. You’re usually addressing three mindsets: a finance lens around value and return, a member experience lens around how this improves service, and a technology lens around how it integrates and operates. Connecting across all three increases traction.

SD: Do your homework and take the time to understand your audience. That means learning how credit unions operate, including the regulatory environment, and being clear on how your product fits within those expectations.

When fintechs come in with that foundation, it makes the conversation much more productive and builds trust early on. It shows you’re serious about partnership, not just about making a sale.

Building a fintech strategy that lasts takes more than good instincts. MSUFCU’s structured, purpose-aligned investment model reflects the clear-eyed thinking Disruptive Strategy for Organizations develops. Offered by Callahan in collaboration with Harvard Business School Online, this executive team learning program gives leaders a shared framework for turning disruption into competitive advantage. Learn more today.

The post How MSUFCU Builds And Backs Fintech Solutions appeared first on CreditUnions.com.

We’re very aware we’re making these VC investments with our members’ deposits. If we can’t get a meaningful return, then the risk isn’t worth it. This means we have to do a lot more diligence on the company’s operating practices, tracking sales targets and attainment, and helping drive the company’s credit union industry strategy for success.

Service Federal Credit Union ($6.6B, Portsmouth, NH) has long served a membership that spans time zones and territories — from New England to Germany and beyond. That footprint, rooted in the credit union’s origins as Portsmouth Air Force Base Credit Union in 1957, has pushed it to invest early and often in digital capabilities that can keep pace with a far-flung field of members.

Through Service Ventures, its fintech holding company, the cooperative looks to back tools and partners that strengthen both operations and the bottom line.

Brian Regan, general partner of Service Ventures, shares how that approach takes shape in practice.

How does Service Credit Union approach fintech innovation and investment?

Brian Regan: Service Credit Union, specifically our CEO David Araujo, has a long history of working with fintech startups in the credit union industry. David was an early partner to names like Posh and Sandbox Banking.

When David and I started talking about a CUSO investment opportunity almost two years ago, his goal was to use investments in fintech companies to drive the strategy of Service forward: efficiency, best-in-class member experience, and opportunities for financial returns to fuel growth and returns for our members.

That’s where the idea of Service Ventures came from. The holding company was started to separate the financial aspects of running a venture capital fund from day-to-day operations of the credit union. To date, we’ve invested in eight early-stage CUSOs.

How are credit unions approaching fintech investment? Future Bets explores how leaders balance immediate needs with longer-term bets, evaluate potential partners, and define success alongside mission and member value. Read the series today.

When choosing what to invest in, how do you balance your day-to-day business needs with longer-term strategic goals?

BR: Service Ventures’ primary goal is to expedite the execution of Service’s strategy. This means internal buy-in to the solutions we invest in is a requirement. This buy-in can be around a current pain point like lending growth, fraud, and card services, or it can be around a future business need we see coming, such as blockchain for operational efficiency.

I don’t see any competition between these two points — we spent the majority of our first fund solving critical needs of the business. Now that a lot of those are in progress, we’re starting to shift focus to longer-term roadmap items we think are coming in the next five to 10 years. But we’re also constantly looking at internal operations and meeting with companies that solve current pain points.

Our internal C-suite is the Service Ventures board. This team helps prioritize business areas where we need to identify solutions. This partnership is critical for the business to be aligned on the fund’s direction and for me to know what types of problems need innovative solutions. Without strong internal support, this initiative would provide minimal value.

What does success look like for a fintech investment? How does purpose play a role in your definition of success?

BR: We measure success across a few different vectors of value. We look at internal efficiency and income generation — how is this partnership driving value to the credit union by solving critical problems? That could mean reducing the cost to acquire loans, increasing interchange income, or lower expenses by reducing fraud.

We also look at the direct value to membership — how is a solution providing value to our members? For example, ScribeUp is a subscription manager that helps members discover and cut unnecessary recurring charges.

And then there’s asset investment, where we measure the success of the company through a traditional asset lens.

The biggest difference between investment partners and normal vendor relationships is that Service Ventures’ goal is to make money through our investments, so this is a sustainable practice that drives meaningful returns on risky venture capital investments.

We’re very aware we’re making these VC investments with our members’ deposits. If we can’t get a meaningful return, then the risk isn’t worth it. This means we have to do a lot more diligence on the company’s operating practices, tracking sales targets and attainment, and helping drive the company’s credit union industry strategy for success.

What’s one lesson you’ve learned about bringing along internal teams?

BR: Everyone’s roadmap is full. Everyone is resource constrained. The best thing to do is to work with internal teams and portfolio companies to minimize the work to prove the value of a relationship.

How do you get started without an integration? Without marketing emails or member communications? Can we get feedback from members before doing any planned work? These steps seem simple, but I’m always trying to find ways to prove the value of a relationship before disrupting the roadmap.

What’s one thing you’ve gotten wrong or would do differently if you started over today?

BR: Playing off the last question, it’s not focusing on the time to value. If an investment takes X months of planned work before presenting value, that’s a big risk to the organization.

Partnering with the business to make sure “perfect” doesn’t get in the way of quick business value is a critical step we didn’t push on early enough. That’s important for Service Ventures’ investment but equally so for early-stage companies trying to find product market fit.

What’s one thing fintechs consistently misunderstand about working with credit unions?

BR: Credit unions are a collaborative group. If your company can solve a tier 1 credit union problem and prove the business value with a handful of customers, there is a high virality factor within the industry. Stay incredibly focused on the first two to three clients, prove value quickly, and the business case will drive substantial growth.

What’s one piece of advice you’d give a fintech about how to partner with credit unions?

BR: Do your research on the industry, the operating metrics, and the differences between banks and credit unions before putting together a credit union strategy. For example, understanding that the majority of credit unions have less than $250 million in assets, how does that change your sales strategy?

Strategic transformation is a team sport. Service Credit Union’s investment model works because leadership is aligned around a shared framework for evaluating risk and building for the long term. Disruptive Strategy for Organizations, offered by Callahan in collaboration with Harvard Business School Online, equips executive teams with the tools to do exactly that. Learn more today.

The post How A Holding Company Helps Service Credit Union Win At Fintech appeared first on CreditUnions.com.

It isn’t an either/or decision between solving today’s challenges and making longer-term bets. The strongest opportunities do both. We look for investments that can address immediate priorities, such as reducing fraud or improving the member experience, while also aligning with the broader strategic direction of the organization.

Sara Dolan, CFO, Michigan State University FCU

READ MORE FROM MSUFCU

We’re very aware we’re making these VC investments with our members’ deposits. If we can’t get a meaningful return, then the risk isn’t worth it. This means we have to do a lot more diligence on the company’s operating practices, tracking sales targets and attainment, and helping drive the company’s credit union industry strategy for success.

Brian Regan, General Partner, Service Ventures

READ MORE FROM SERVICE CREDIT UNION

If the fintech has what appears to be a novel idea, we’ll bring it back to WSECU for consideration. We’re often surprised by ideas we hadn’t considered yet, meaning we didn’t realize a pain point even existed until we investigated it further.

Paul Kirkbride, COO, Washington State Employees Credit Union

READ MORE FROM WSECU

The post Future Bets From Today’s Credit Unions appeared first on CreditUnions.com.

How AI contributes to productivity and its impact across industries are less certain. Employees who say AI is improving outcomes tend to hold leadership positions, and the benefits of AI are more apparent in individual tasks than in broader workflows. For credit unions, getting the AI balance right requires proper planning.

AI USE IN THE U.S. WORKFORCE
FOR 23,717 U.S. EMPLOYEES | DATA AS OF 02.19.26
SOURCE: Gallup

Strategic Insights

• In the Gallup survey, 65% of employees said AI improves productivity. However, these employees tended to hold leadership positions. Lower-ranking employees were less likely to report such benefits.
• BCU ($6.2B, Vernon Hills, IL) is empowering teams to safely use AI-driven features already available through its existing tools and partners. It’s approved dozens of efficiency-generating features that span HR, marketing, and software development. Read more in “How Does BCU Put AI Policy Into Practice?”
• According to Gallup, employees in AI-adopting organizations reported higher productivity and more workplace disruption, even as fundamental changes in how work gets done was limited.
• Hudson Valley Credit Union ($8.1B, Poughkeepsie, NY) has dedicated a C-suite role to AI strategy and adoption. Preetha Sekharan, chief AI officer, focuses on applying AI to transform the member experience, drive growth, improve efficiency, and enhance risk management. Read more in “What’s In A Name: Chief AI Officer.”
• AI tools are increasing in power and ease of use, but getting AI right requires clear practices and policies that support employee adoption and comfort with the new tools.
• Members Cooperative Credit Union ($1.2B, Duluth, MN) has a robust internal policy that provides guardrails for usage. Written documentation details for all users when, where, and how they can use AI, protecting the credit union, staff, and members alike. Read more in “Governance And Guardrails Help Credit Unions Navigate AI.”

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For decades, credit unions have built their value on trust, community relationships, and a commitment to serving the middle market. While that remains core, credit unions must also adapt. The way money moves is changing quickly, and stablecoins are emerging as one of the clearest signals of where financial infrastructure is headed.

Once viewed as niche or experimental, stablecoin is becoming a foundational layer of modern money movement. Because adoption is still in its early stages, credit unions and community banks have a meaningful window to help shape how these rails are designed, governed, and used.

This is critical because today, much of digital payments innovation is driven by large banks, fintech platforms, and wallet providers. If community-based institutions wait too long, they risk operating within standards set by others rather than helping define a system that reflects their own values, economics, and member relationships.

At its core, a stablecoin is simply a digital dollar pegged to a stable, real-world asset — usually the U.S. dollar — that can move instantly and at lower cost than traditional rails. But for credit unions, its importance goes beyond speed or efficiency. It’s also about access.

Growing Demand For Digital Dollars

Credit unions collectively serve tens of millions of Americans and represent more than $2 trillion in assets nationwide. Yet many of the consumers and small businesses they support, especially those in the middle market, still face friction when it comes to moving money or limited access to modern digital tools. Stablecoin has the potential to directly address those gaps.

By enabling near-instant settlement between parties and reducing the cost of transfers, stablecoin infrastructure can support faster loan funding, more efficient participation lending, and more seamless peer-to-peer, merchant, and cross-border payments. For members, that translates into real-world impact: quicker access to funds, lower fees, and greater financial flexibility. If credit unions can’t provide that, members will find someone else who can.

Stablecoin’s Ability To Improve Experience And Expand Access

When financial tools become faster, cheaper, and more programmable, they become more accessible to consumers and businesses that have historically been underserved or overlooked by larger institutions. The same dynamic applies for the adoption of digital payment models and aligns directly with the credit union mission: meeting people where they are and helping them achieve their financial goals.

But realizing this potential requires active participation from the credit union system itself. Stablecoin is still an emerging space, and key standards, governance models, and economic structures are being defined in real time. If credit unions aren’t at the table, they risk inheriting a system designed without their values, or their members, in mind.

A Credit Union-First Approach

At TruStage, we have relationships with 93% of credit unions nationwide, so we’ve seen firsthand where stablecoin solutions can help the industry as a whole. Earlier this year, we announced the development of TruStage Stablecoin (TSDA), a stablecoin tailor-made for community-based financial institutions. This isn’t about introducing a proprietary product. It’s about building a shared infrastructure that credit unions can trust, influence, and scale over time.

The strong engagement we’ve seen with our initial TSDA announcement makes clear that credit unions recognize that this moment matters, and they want to help define the next era of money movement.

That Work Is Just Beginning

For credit union leaders who want to better understand what stablecoin means for their institutions, and how to engage, the conversation continues at this year’s Discovery Conference, register today. I look forward to sharing more about what we’re learning, where we see the greatest opportunity, and how credit unions can take the next step forward.

The views expressed here are those of the author(s) and do not necessarily represent the views of TruStage. TruStage is the marketing name for TruStage Financial Group, Inc., its subsidiaries, and affiliates. Corporate headquarters are located in Madison, WI.

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Brian Kaas is senior vice president of corporate development at TruStage. He is responsible for sourcing, evaluating, and executing a broad range of strategic transactions for the organization. Additionally, Brian serves as the president and managing director of TruStage Ventures, LLC, and oversees all aspects of its venture capital program. He is a frequent speaker on fintech trends and routinely advises credit unions on best practices for leveraging partnerships with fintechs. He also serves as a board member for several banking technology, lending, and fintech companies.

Prior to joining the company in 2012, Brian was a law partner at Foley & Lardner. He has a broad range of legal and corporate experience in complex commercial transactions, including mergers, acquisitions, reinsurance, and corporate restructurings. Brian graduated from the University of Wisconsin Law School with a Juris Doctorate.

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A failed payment transaction is easy to dismiss as a service issue. Michigan State University Federal Credit Union ($8.5B, East Lansing, MI) treats it differently. It uses the moment to shape the member experience and turn payments into a point of leverage for loyalty.

In late 2024, the credit union introduced a service that automatically updates card details with major platforms like Amazon, Netflix, Venmo, and more. Members can take advantage when they open a new card or need to update an expiring or compromised card.

“People don’t need a loan every day,” says Benjamin Maxim, chief technology officer at MSUFCU. “They don’t need new deposit accounts every day, but what they’re paying with is daily brand engagement.”

The credit union’s innovation CUSO, The Reseda Group, joined forces with a fintech to offer the service, dubbed “Card Updater.” That fintech, Strivve, works with banks and credit unions to manage the relationships and connectivity with digital service providers, often using AI or low-tech robotic process automation.

According to Maxim, few things erode cardholder loyalty faster than a payment that doesn’t work. This service is essential in heading that off.

“Making sure our card stays in the stored payment areas was our main focus,” he says. “Interchange revenue is a focus of ours. We’re going to cut debit card interchange in half when we hit $10 billion in assets. The more transactions we can have on the credit card side, the stronger.”

MSUFCU has linked Card Updater with both its credit and debit portfolios and has built the service into its mobile banking and online platforms. As of year-end 2025, 891 unique cardholders used the service nearly 1,300 times, according to Maxim.

Beyond Interchange

Although Card Updater will help drive interchange revenue for the cooperative, Maxim says the service is more broadly about improving the member experience.

“We’re trying to add things to the digital experience and facilitate that embedded payment experience everyone’s moving toward,” the CTO says. “Think about all the places you store your card — your Starbucks wallet, Venmo, Uber, Airbnb. When the card breaks, all those payment methods break. Is it MSUFCU’s fault you can no longer book your car or do X, Y, and Z? We want to make sure we’re not to blame, but we’re also resolving whatever you can’t do in the moment. This helps make sure all those embedded payments are working.”

Card Updater is a relatively new feature for MSUFCU, but Maxim says it has already provided a strong ROI and leadership is confident the service has prevented attrition to other plastic providers like Capital One. And, says Maxim, plenty of members have been vocal about their positive experiences with it.

“The loyalty we’ve built is probably worth its weight in gold,” he says. “It helps retain members, and if you’re new to the credit union, it helps you adopt the credit union as one that you trust and use versus needing to do a lot of work to update stored payments. If we can make it easier, you’re more likely to use this card that you chose for a reason.”

Lessons Learned

Card Updater is situational, Maxim says, and credit unions need to build it into their workflows so members have it when they need it rather than seeking it out as an extra service.

“They need it in a certain moment and you need to deliver it in that certain moment,” he says. “If you were to run ROI calculations, you need to look at how many people you issue new cards to and how many members or new cards you issue every month because of fraud or new memberships or whatever reason. That’s going to be your value. Then compare that for an ROI but also consider the lift and the loyalty.”

Loyalty isn’t accidental. MSUFCU’s Card Updater shows how removing friction at the right moment builds the kind of trust that keeps members from drifting to other providers. Gallup research shows emotionally engaged members are 5.4x more likely to stay and 5.6x more likely to trust their credit union as a financial advisor. The Member Engagement & Financial Wellbeing Consortium helps credit unions build that trust intentionally, across every touchpoint. Learn more.

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St. Cloud Financial Credit Union ($430.0M, Sartell, MN) has quickly evolved from early adopter to advocate when it comes to digital assts.

The Minnesota-based cooperative has built a core-integrated digital asset vault, connected to multiple blockchain networks, and even launched its own stablecoin. But CEO Jed Meyer is quick to clarify this isn’t about chasing crypto because it’s new and buzzy.

“We never set out to be a trailblazer,” he says. “We always start with our member and work outward.”

This time, it started with a market penetration problem.

In 2019, the credit union had roughly 23,000 members in a market of 200,000 people and nearly 40 competing financial institutions. Through strategic planning sessions, two priorities emerged: to better serve underserved populations through customized products, and to understand where member money might be going next.

That second priority led the credit union to digital assets.

“We were seeing some deposit outflows,” Meyer says. “Not a ton, but enough to ask, ‘what are we going to do?’”

In 2023, approximately $1 million in deposits flowed from St. Cloud Financial to exchanges. In 2024, that number jumped to $15 million.

“That’s a 15x trend of liquidity outflows,” Meyer says.

Across the industry, the CEO estimates roughly 3% of deposits might already be leaving for digital asset platforms with no guarantee of return.

“With every innovation in the past 100 years, we were still needed at some point in the lifecycle of the dollar,” Meyer says. “This is the first time that might not be true. When a dollar leaves me for the DeFi space, there’s never a need for a centralized ledger ever again.”

According to Gallup, one in seven Americans reported owning cryptocurrency in 2025. For St. Cloud Financial specifically, Meyer says 16% to 25% of its members either already have or are showing interest in digital assets.

“Relevancy always equals ROI,” he says. “I’m more interested in plugging the hole in the bottom of the income boat than I am worrying about future dollars.”

Education Before Execution

Before building anything, St. Cloud focused on understanding the space.

The CEO says it’s difficult to find education materials, so the credit union helped foster the Minnesota Crypto Council, a nonprofit focused on education for members, staff, and the broader community. For four years, the organization has hosted quarterly sessions, developed training materials, and brought in subject matter experts.

That education-first approach proved critical not just for adoption but also for addressing skepticism.

“When you launch something like this, you have to speak to the 50% of your membership that doesn’t want it,” Meyer says. “This is optional. We’re not forcing anything.”

Industry peers might be even harder to convince. A fall 2025 report from American Banker found the majority of the banks, credit unions, and payments companies it surveyed remain in the discussions and learning phase. The uncertainty around regulations has slowed adoption, and one of the most common arguments against digital assets is its association with volatility and fraud.

Meyer flips that framing.

“What risk have I actually taken?” he asks. “Other than human capacity and time spent, what risk have I taken?”

In his view, the greater risk lies in waiting.

“I actually think people who say, ‘I’ll get to this in five years,’ are taking the risky position,” he says.

What Came First — The Vault Or The Coin?

Although much of the industry conversation has centered on stablecoins, St. Cloud Financial took a different path with the launch of its CU-Digital Asset Vault in March. Initially envisioned as a digital version of a safe deposit box, it quickly evolved into foundational, core-integrated infrastructure. Rather than building a single product, the cooperative deployed a core-integrated digital asset framework developed by DaLand CUSO – Coin-2-Core – capable of operating across multiple financial rails, from traditional payment networks to blockchain-based systems.

“The vault acts as a vault, but really it’s a switch,” Meyer says. “It turns my core into the wallet. It turns my core into the node. It allows me to plug into any DLT [distributed ledger technology] money network.”

At a structural level, the credit union designed the vault around member ownership, employing a self-custody model where members retain control of their digital assets while the credit union facilitates storage and movement. This is in line with the current regulatory environment, where full custody authority remains an area of ongoing clarification. Rather than push ahead in a gray area, Meyer says St. Cloud Financial has spent years engaging regulators at both the federal and state levels, including ongoing dialogue with the NCUA and the Minnesota Department of Commerce. In the meantime, the vault serves as both a practical member tool and a strategic bridge, connecting digital assets back to the cooperative’s core system without overstepping regulatory boundaries.

With the infrastructure in place, launching a proprietary stablecoin became possible. Although that was not originally a main objective of the strategy, a use case convinced the credit union to proceed. Two national food co-ops approached St. Cloud Financial looking for a settlement solution aligned with cooperative principles.

“We offered them USDC,” Meyer says. “They said, ‘We’re a cooperative, you’re a cooperative. We want a cooperative stablecoin.’”

Thus, St. Cloud Financial introduced the Cloud Dollar ($CLDUSD) in late 2025, making it the nation’s first credit union-issued stablecoin.

Still, Meyer cautions against overemphasizing this aspect of the technology.

“In five years, we’ll look back and say that was a small sliver of what we were actually talking about,” he says.

Don’t Stop Here. Stablecoins and digital assets have moved beyond “wait and see” into active development. For a look at both the risks and the opportunities in this next phase of financial services, read “What Should Credit Unions Know About Stablecoins?” only on CreditUnions.com.

Slow Rollout, Strong Signals

St. Cloud Financial has taken a measured approach to rollout.

Following an NCUA audit in late 2025, the credit union launched a friends-and-family pilot in December and expanded to full membership in March. Today, the credit union holds approximately 15 Bitcoin in its system and between 50 and 75 vaults in progress.

So far the most notable insight isn’t volume, Mayer says, but member behavior, especially among younger demographics.

“When they open a vault, they bring everything with them,” he says, indicating it’s been a way to deepen relationships and increase products per member. “We’ve been told, ‘Finally someone is listening to our generation and what we believe our wealth will be.’”

Consumers are already in the cryptocurrency space, and Meyer urges industry peers not to outsource those members.

“You worked hard for those relationships,” he says. “You cannot continue to give your relationships away to third parties.”

An Uncertain Timeline

Crypto is only the beginning for St. Cloud Financial. The same infrastructure that supports digital assets today could eventually handle tokenized financial instruments, identities, and other forms of value.

“This is going to be bigger than a product,” Meyer says. “It’s going to be bigger than one innovation.”

The CEO expects the traditional finance and digital asset ecosystems will coexist and, ultimately, St. Cloud’s strategy is less about predicting the future and more about preparing for it.

“If this takes another seven to 10 years, I’m okay with that,” Meyer says. “If this happens tomorrow, I’m okay with that.”

For credit unions, the question isn’t whether to launch a stablecoin or offer crypto trading. According to Meyer, it’s whether they will have a role in a financial system where money can move, store, and grow entirely outside of them.

“Our only play is to establish ourselves as the access point, the aggregator point, and the trusted advisor point,” he says.

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