Discover the benefits and features that Union Credit offers in its marketplace to help credit unions compete with larger financial institutions and fintechs in their local communities.
Dave, can you share the inspiration behind founding Union Credit and what led you to focus on providing firm, one-click credit offers embedded within daily activities?
Union Credit is an extension of the journey we started at CuneXus, a fintech I c0-founded in 2007, now known as TruStage Digital Storefront, a wholly-owned technology subsidiary of TruStage. While CuneXus offers a digital storefront for financial institutions’ existing account holders to cross-sell customers and boost retention, Union Credit offers the first digital loan marketplace embedded in everyday retail and financial experiences to attract and acquire new members.
The decision to start Union Credit was driven by two factors: fulfilling a vision and paying it forward. CuneXus’ one-click perpetual approval and lending model has proven to help hundreds of financial institutions of all sizes improve retention rates and boost loan volume. So, the natural next step was to bring this lending model outside the credit union’s digital walls and into the open market, enabling credit unions to attract new, credit-worthy members that will breathe new life into their business. A bonus is that I am excited to be able to help the industry evolve while also giving back to many of those who supported our initial journey.
How does Union Credit’s marketplace help credit unions elevate their brands nationwide and break into new markets digitally?
Credit unions thrive on their long-lasting member relationships but acquiring new relationships, especially outside of their local markets, is a challenge. This challenge ends with Union Credit.
Union Credit’s embedded fintech strategy and partnerships with various digital merchants places credit unions in front of consumers nationwide as they shop. Merchants that embed Union Credit’s solution into their online services benefit from providing their customers with local, competitive, and advantageous offers at the point-of-sale. This enables credit unions to reach new audiences and extend their supreme customer service and wide array of consumer-centric products to potential members outside of their traditional markets.
In what ways can credit unions appeal to younger generations through the offerings provided by Union Credit?
Credit unions often struggle to reach younger demographics, largely because they rely on less modern tactics to acquire new members across the demographic spectrum. Despite the median age of U.S. consumers being 38, the average age of credit union members is 53.
Embedded finance is second nature to younger, digitally minded consumers. By partnering with Union Credit, credit unions can get in front of younger generations throughout their digital day, while they shop for big ticket items at the point of sale. For example, a young consumer that’s browsing Angi as they begin a home improvement project would benefit from seeing competitive HELOC offers they are already pre-approved for from credit unions in their local area, helping them budget for their project, and making the financing experience faster, more seamless, and more personal.
Can you elaborate on the features and advantages of Union Credit’s marketplace that enable credit unions to compete with fintechs and larger financial institutions in their communities?
Placing credit unions in front of new, credit-worthy consumers from outside their ecosystem and enabling them to make convenient and firm one-click credit offers allows credit unions to compete on new levels. Accessibility is key in the competition for consumers. By offering fast, local, and healthy financial options, they will be able to compete with fintechs as well as large institutions like JP Morgan Chase and Wells Fargo, who have traditionally dominated the digital space.
Once credit unions get a seat at the table, their superior customer service will take them a step further and differentiate them from the rest. They will now reach a broader audience through a carefully crafted digital experience while still providing the local, personalized service that makes community-based financial institutions so appealing.
How does Union Credit ensure that the credit offers provided to consumers are in their best interest and offer competitive advantages?
Union Credit aggregates consumer data from a number of sources, and matches it with credit unions’ field of membership, product, decisioning and underwriting details to generate highly-personalized and 100% approved firm offers of credit. With the loan application step completely eliminated, consumers are able to see exactly how much credit is available to them and at what rate. This puts the consumer in charge of the relationship and their data. If they choose to move forward with an offer, it only takes one-click to engage.
The future of open finance lies in giving consumers easy access to information and opportunities. Union Credit empowers this movement by providing consumers with full transparency into their buying power while shopping and at the point of sale. Responsibly granting relevant and competitive product options that consumers need and are pre-approved for enables them to make sound financial decisions while knowing their options.
How does Union Credit collaborate with merchants to provide local and advantageous offers to customers? Can you provide some examples?
Merchants that plug and play into the Union Credit marketplace will be able to provide their customers with competitive and advantageous loan rates at the point of sale. Union Credit will also be able to profile users by leveraging the information about user behavior inside merchant sites. Since the company’s seed funding in January, Union Credit has already formed significant partnerships with TransUnion, Way.com, Bankrate and others.
Union Credit’s partnership with Way.com allows the nation’s largest auto-super app to provide its 6.5 million drivers with competitive, pre-approved auto-financing and refinancing options from local credit unions at the point of purchase.
Bankrate is the nation’s trusted research source for consumer loans and financial information, guiding savers and spenders through the next steps of their financial journey. Through Union Credit’s marketplace, Bankrate’s 25 million users are able to easily shop and compare offers and rates – spanning across home equity, purchasing and refinancing, personal loans, credit cards, new and used auto loans, and more – with more knowledge into their buying power than ever before.
Can you discuss the technological infrastructure and integration required for credit unions to leverage Union Credit’s marketplace effectively?
It’s easy for credit unions to become part of the Union Credit ecosystem. All they have to do is opt in on a month-to-month basis, without any significant implementation project or long-term commitments. Implementation is simple and straightforward, and we can have a new lender up and running in just a couple weeks, without the need for a large project team or IT lift.
Every consumer is then cross-referenced for eligibility across our network of lenders. We identify what lenders can serve them, and then we generate the offers on behalf of those lenders using that lender’s unique underwriting pricing criteria. Lenders get to use their own pricing and underwriting criteria for the creation of these offers. They can also present offers with their own branding to consumers who are eligible to join their institution.
To provide pre-approval, we work with TransUnion as our data provider. We use TransUnion’s trending credit attributes, algorithms, and fraud tools to help our participating lenders intelligently evaluate creditworthiness. This allows the rates offered to consumers to be tailored to their needs and financial situation and keeps them in a state of “perpetual approval”.
Credit unions also have the ability to define what third party merchants they want their offers to be presented in. So, if they want visibility in Bankrate but not Way.com, they can opt in or out. Ultimately this model gives credit unions the reach they need to offer the services that consumers truly want.
How does Union Credit help credit unions cut costs and save time in acquiring new members?
Acquiring new members through traditional marketing channels is expensive for credit unions, the industry average being $700 per member. IT development to gain new market share is also costly and requires skilled talent. With Union Credit, credit unions pay a small implementation fee to get on the marketplace and then only pay Union Credit when a consumer accepts a loan offer and automatically becomes a member. What normally takes months to years in both time and marketing & IT dollars can be accomplished with Union Credit in a few clicks of a button.
Can you share any insights or trends you’ve observed regarding the impact of Union Credit’s marketplace on the growth and competitiveness of credit unions?
We announced the strategy for the marketplace in January 2023, followed by the official launch in mid-July. Since the beginning, we’ve seen a great outpour of support and collaboration from forward-thinking credit unions like Jovia Financial Credit Union, America’s Credit Union, Teachers Federal Credit Union and many more. We have noticed that credit unions come to us because they want to acquire new and often younger members, stay current in terms of technological advancements and level the national playing field.
In your opinion, what is the future of credit unions in the digital age, and how does Union Credit contribute to shaping that future?
While it’s been a bumpy ride, what Buy Now, Pay Later (BNPL) has done over the last few years, is prove that consumers want access to the financial tools they need to complete a transaction embedded within the context of that transaction. Unfortunately, credit unions have been left out of this movement and most BNPL services are isolated to smaller items – and are not responsibly targeted to creditworthy borrowers.
But credit unions have an array of consumer lending products to offer with competitive rates and services that they should be able to share with the world. This is where Union Credit steps in. We embed credit unions’ products, be it auto loans, credit cards, home equities, personal loans etc., within consumers’ everyday retail and financial experiences, giving them a seat at a table and helping them compete in the digital age and acquire new members.
Lastly, what excites you the most about the potential of Union Credit’s marketplace and the impact it can have on credit unions and their communities?
Union Credit’s co-founder, Barry Kirby, and I have each spent more than 20 years in the credit union space and are strong credit union advocates. This idea is very near and dear to us and we think it will strengthen the credit union movement and bring new members into the system. We also believe that the embedded marketplace model can be a game-changing product for all Americans in need of affordable credit. With the rapid rise in interest rates over the past year and the economic uncertainty we are currently experiencing, every basis point matters.
Stay Ahead of the Financial Curve with Our Latest Fintech News Updates!
