Name: Credit union solutions: What’s different about this landscape?
Uploaded: 2024-07-12T10:54:58.762Z
Duration: 508.98
Description: Sam Das, Managing Director at TruStage Ventures, talks about credit unions’ unique situation and challenges in liquidity, member retention, and cybersecurity. Sam emphasizes credit unions’ need for tailored fintech solutions and explains why fintechs need to come prepared if they want to partner with credit unions.

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English

{{00:00:05}}
Hi, I'm David Penn, Research
Analyst with Finovate.

{{00:00:07}}
We're here at FinovateSpring
in San Francisco.

{{00:00:09}}
And joining me is Sam Das.

{{00:00:10}}
He is the Managing Director
with TruStage Ventures.

{{00:00:13}}
Sam, thanks for joining us today.

{{00:00:14}}
My pleasure.

{{00:00:15}}
I thought before we got started with
our questions, maybe you could tell

{{00:00:17}}
us a little bit about yourself and
the work that you do at TruStage.

{{00:00:19}}
Sure.

{{00:00:20}}
As you mentioned, I'm Managing
Director at TruStage Ventures.

{{00:00:23}}
We're the venture capital arm of TruStage,
which is  an older insurance company, but

{{00:00:29}}
trying to do things on the cutting edge.

{{00:00:31}}
TruStage has a legacy of working
very closely with credit unions, and

{{00:00:35}}
so even though we are  a corporate
venture capital firm, because we have

{{00:00:41}}
such a close affiliation with our
credit union partners, we actually

{{00:00:45}}
make investments that are gonna
help credit unions modernize their

{{00:00:48}}
business and stay on the cutting edge.

{{00:00:50}}
And if it helps the parent
company, that's great.

{{00:00:53}}
But we're really focused on
helping our credit union partners

{{00:00:57}}
just navigate  the ever changing
financial services landscape.

{{00:01:01}}
Yeah, very interesting.

{{00:01:01}}
Quite the innovation or
the evolution for TruStage.

{{00:01:04}}
let's talk a little bit about credit
unions while we're, talking about it here.

{{00:01:07}}
What would you say are some of
the major challenges that credit

{{00:01:10}}
unions are facing right now?

{{00:01:11}}
Yeah, it's not that different from what
you're seeing across the entire landscape.

{{00:01:17}}
I would say over the last couple
of years There has been certainly

{{00:01:20}}
pressures around liquidity.

{{00:01:22}}
We've seen that with banks and credit
unions alike, but, I think it, the

{{00:01:26}}
liquidity, particularly for credit
unions, is synonymous with maintaining

{{00:01:34}}
credit union member relevance.

{{00:01:35}}
How can they retain those members?

{{00:01:37}}
How do they attract new members?

{{00:01:39}}
And so then it, it really spills
into how they increase more wallet

{{00:01:42}}
share with their member base.

{{00:01:44}}
Are they providing the right
solutions that are meeting the

{{00:01:47}}
credit union members' needs?

{{00:01:49}}
I think that's  a topic for every
credit union across the country

{{00:01:53}}
right now, of how do we really
maintain  that relevancy going forward.

{{00:01:59}}
And then, I would say probably the
one topic that I hear most, across

{{00:02:04}}
different credit unions, is the
prevalence of fraud and how much

{{00:02:09}}
fraud is really impacting every
decision they're making going forward.

{{00:02:14}}
Cybersecurity is a major priority and
one trend that we're seeing over the next

{{00:02:20}}
three to five years is something that
every cranium is going to be focusing on.

{{00:02:24}}
The big difference though, just
some of the research that TruStage

{{00:02:28}}
has done, is that, while, liquidity
and, new technologies and realizing

{{00:02:36}}
what the member experience is.

{{00:02:37}}
Those are all things that the
credit unions have a real good

{{00:02:40}}
fundamental understanding of.

{{00:02:42}}
The cyber security threats, that, there's
still a bit of a knowledge gap with

{{00:02:47}}
many credit union management teams.

{{00:02:48}}
And, they're looking to close that gap.

{{00:02:52}}
But the problem is, the bad actors
in out there right now are attacking

{{00:02:58}}
credit unions, attacking everybody
right now, quite frankly, at such an

{{00:03:01}}
alarming rate with new techniques.

{{00:03:04}}
Quite frankly, we're here at
Finovate, we hear everything

{{00:03:08}}
AI related, which is great.

{{00:03:09}}
AI is providing a lot of benefit  for
banks, credit unions, consumers alike,

{{00:03:18}}
but it's also being utilized by those
people that we don't want, right?

{{00:03:24}}
And so they're using those
same technologies to automate

{{00:03:27}}
these cyber threats, these
cyber attacks on credit unions.

{{00:03:31}}
And  we're getting caught behind.

{{00:03:35}}
And there is, quite frankly, an
AI arms race out there right now.

{{00:03:39}}
And credit unions just need to, level
the playing field by adopting some

{{00:03:44}}
of these new technologies, these new
solutions to combat the numerous types

{{00:03:49}}
of fraud that, are attacking them today.

{{00:03:50}}
So those are, just a small handful of
things that, that credit unions are,

{{00:03:55}}
thinking of right now on top of mind.

{{00:03:57}}
Sure.

{{00:03:57}}
Some important things.

{{00:03:58}}
You mentioned fraud, and maybe
that's a great way to take off, to

{{00:04:01}}
the next question I wanted to talk
with you about, which has to do with

{{00:04:03}}
specific solutions for credit unions.

{{00:04:06}}
Is the fraud challenge that credit
unions are facing right now, something

{{00:04:10}}
that they're going to need specifically
tailored tools for them to fix?

{{00:04:13}}
Or are some of the tools that are being
developed that work for larger banks,

{{00:04:15}}
whatever, also working for credit unions?

{{00:04:17}}
Do they need their own
tools to better fight fraud?

{{00:04:20}}
I would say that every tool, whether
it's fraud or any solution that

{{00:04:25}}
is really targeting credit union,
has to understand what, is unique

{{00:04:30}}
about the credit union space.

{{00:04:31}}
Credit unions, they're a non profit
and they are very much focused on that

{{00:04:37}}
credit union mission of helping their
members, better their financial lives.

{{00:04:41}}
And, that is the foundation of every
credit union across the country.

{{00:04:47}}
And, with that, when credit
unions look to fintechs to partner

{{00:04:53}}
with, they want fintechs that are
understand who they are, right?

{{00:04:57}}
Like everyone as an individual, they
just want to understand that there

{{00:05:01}}
is  a common vocabulary and a common
mission that we're all trying to achieve.

{{00:05:06}}
And because of that, and because credit
unions are so consumer focused, the

{{00:05:12}}
solutions that they need,  need to be
tailored to getting at that granularity

{{00:05:16}}
of knowing who their member base is,
knowing how, those members are interacting

{{00:05:22}}
with their broader financial lives.

{{00:05:24}}
And it's imperative that the
providers that are trying to partner

{{00:05:30}}
with credit unions just understand

{{00:05:34}}
the fundamental tenets, because there
is a different tech stack that's

{{00:05:38}}
going to be unique to credit unions.

{{00:05:40}}
There's  a unique regulatory
and compliance landscape that

{{00:05:44}}
they have to really understand.

{{00:05:48}}
I always say these partnerships
are like marriages.

{{00:05:50}}
You have to live and grow
alongside your partner.

{{00:05:53}}
And the best fintech partners out
there for credit unions are ones that

{{00:05:57}}
understand that fundamental need.

{{00:06:00}}
That's where I wanted to take,
take the conversation next.

{{00:06:02}}
Maybe a way of wrapping up.

{{00:06:03}}
We talked a little bit about the
credit unions from their side.

{{00:06:05}}
Do you have a sense that fintechs
understand that if they're going to,

{{00:06:08}}
we're doing a lot of work here with
credit unions here at FinovateSpring,

{{00:06:10}}
and talking with them and trying
to find out what they need, trying

{{00:06:13}}
to connect them with fintechs.

{{00:06:14}}
Do you have a sense that the, on
the fintechs side, that they have an

{{00:06:16}}
understanding that they really have
to treat credit unions as a unique

{{00:06:19}}
type of experience compared to maybe
some other, financial institutions

{{00:06:21}}
they might want to partner with?

{{00:06:22}}
Do you think they get it?

{{00:06:25}}
I would say this.

{{00:06:26}}
Because we're making investments in
these fintechs that are part of the

{{00:06:30}}
credit unions, it's part of the,
one of the criteria that we have

{{00:06:34}}
in the types of companies, do you
understand who a credit union is?

{{00:06:39}}
We've come across many fintechs that, use
the term credit union bank interchangeably

{{00:06:45}}
and we advise them like that.

{{00:06:49}}
If, you go into a credit union and
start, talking about oh, you know

{{00:06:53}}
what are you doing in your bank?

{{00:06:56}}
that's a deal stopper right there.

{{00:06:57}}
So just understanding like how to approach
credit unions and how to talk to credit

{{00:07:01}}
unions because credit unions,  you
talk about individual credit unions,

{{00:07:06}}
but what you really need to understand
is credit unions are an ecosystem.

{{00:07:11}}
They are a collective.

{{00:07:13}}
Because everyone is really
on the same mission.

{{00:07:16}}
They're all trying to help the, those
primarily middle income consumers

{{00:07:21}}
across the country find  the financial
services that they may not be able

{{00:07:26}}
to get at their community bank
or, larger, bulge bracket bank.

{{00:07:32}}
And so it's, imperative for
those fintechs to just understand

{{00:07:37}}
who they're dealing with.

{{00:07:39}}
The great news is, credit unions
are very open to innovation.

{{00:07:42}}
They're looking to adopt new technologies
and new solutions, at an alarming rate.

{{00:07:49}}
It's fantastic.

{{00:07:50}}
And they're willing to
test and learn into it.

{{00:07:52}}
And many have developed partnership models
and, innovation centers to absorb the

{{00:07:59}}
fintechs that they're working with because
they fundamentally understand that.

{{00:08:02}}
Working with fintechs is going
to be the differentiator that's

{{00:08:06}}
going to give them that competitive
advantage, in the long term.

{{00:08:10}}
Makes a lot of sense.

{{00:08:11}}
It's really fantastic.

{{00:08:12}}
Like I said, we're doing a lot
of special things with credit

{{00:08:13}}
unions here at Finnovate Spring.

{{00:08:14}}
It's great to have someone like yourself
on board to talk to us, talk to some of

{{00:08:17}}
our watchers and listeners about what's
going on with credit unions and fintechs.

{{00:08:20}}
So thank you very much for stopping by.

{{00:08:22}}
My pleasure.

{{00:08:22}}
Great.

{{00:08:22}}
And thank you.

Hi, I'm David Penn, Research
Analyst with Finovate.

We're here at FinovateSpring
in San Francisco.

He is the Managing Director
with TruStage Ventures.

I thought before we got started with
our questions, maybe you could tell

us a little bit about yourself and
the work that you do at TruStage.

As you mentioned, I'm Managing
Director at TruStage Ventures.

We're the venture capital arm of TruStage,
which is  an older insurance company, but

TruStage has a legacy of working
very closely with credit unions, and

so even though we are  a corporate
venture capital firm, because we have

such a close affiliation with our
credit union partners, we actually

make investments that are gonna
help credit unions modernize their

And if it helps the parent
company, that's great.

But we're really focused on
helping our credit union partners

just navigate  the ever changing
financial services landscape.

Quite the innovation or
the evolution for TruStage.

let's talk a little bit about credit
unions while we're, talking about it here.

What would you say are some of
the major challenges that credit

Yeah, it's not that different from what
you're seeing across the entire landscape.

I would say over the last couple
of years There has been certainly

We've seen that with banks and credit
unions alike, but, I think it, the

liquidity, particularly for credit
unions, is synonymous with maintaining

And so then it, it really spills
into how they increase more wallet

Are they providing the right
solutions that are meeting the

I think that's  a topic for every
credit union across the country

right now, of how do we really
maintain  that relevancy going forward.

And then, I would say probably the
one topic that I hear most, across

different credit unions, is the
prevalence of fraud and how much

fraud is really impacting every
decision they're making going forward.

Cybersecurity is a major priority and
one trend that we're seeing over the next

three to five years is something that
every cranium is going to be focusing on.

The big difference though, just
some of the research that TruStage

has done, is that, while, liquidity
and, new technologies and realizing

Those are all things that the
credit unions have a real good

The cyber security threats, that, there's
still a bit of a knowledge gap with

But the problem is, the bad actors
in out there right now are attacking

credit unions, attacking everybody
right now, quite frankly, at such an

Quite frankly, we're here at
Finovate, we hear everything

AI is providing a lot of benefit  for
banks, credit unions, consumers alike,

but it's also being utilized by those
people that we don't want, right?

And so they're using those
same technologies to automate

these cyber threats, these
cyber attacks on credit unions.

And there is, quite frankly, an
AI arms race out there right now.

And credit unions just need to, level
the playing field by adopting some

of these new technologies, these new
solutions to combat the numerous types

So those are, just a small handful of
things that, that credit unions are,

You mentioned fraud, and maybe
that's a great way to take off, to

the next question I wanted to talk
with you about, which has to do with

Is the fraud challenge that credit
unions are facing right now, something

that they're going to need specifically
tailored tools for them to fix?

Or are some of the tools that are being
developed that work for larger banks,

whatever, also working for credit unions?

Do they need their own
tools to better fight fraud?

I would say that every tool, whether
it's fraud or any solution that

is really targeting credit union,
has to understand what, is unique

Credit unions, they're a non profit
and they are very much focused on that

credit union mission of helping their
members, better their financial lives.

And, that is the foundation of every
credit union across the country.

And, with that, when credit
unions look to fintechs to partner

with, they want fintechs that are
understand who they are, right?

Like everyone as an individual, they
just want to understand that there

is  a common vocabulary and a common
mission that we're all trying to achieve.

And because of that, and because credit
unions are so consumer focused, the

solutions that they need,  need to be
tailored to getting at that granularity

of knowing who their member base is,
knowing how, those members are interacting

And it's imperative that the
providers that are trying to partner

the fundamental tenets, because there
is a different tech stack that's

There's  a unique regulatory
and compliance landscape that

I always say these partnerships
are like marriages.

You have to live and grow
alongside your partner.

FinovateSpring

Expert Insight

Sam Das, Managing Director at TruStage Ventures, talks about credit unions’ unique situation and challenges in liquidity, member retention, and cybersecurity. Sam emphasizes credit unions’ need for tailored fintech solutions and explains why fintechs need to come prepared if they want to partner with credit unions.