In an effort to ensure credit unions are as competitive as possible with technology and support services, the Credit Union National Association has partnered with the Association for Financial Technology.

“Credit unions outsource a lot of their technology, so I felt it was important that CUNA become involved in this organization [AFT], not only to keep abreast of who is operating in the space, but also to educate them on credit unions,” said Julie Esser, vice president of CUNA Strategic Services and former AFT board member (2011-2014).

“It is important for them to know what issues credit unions are facing, so they understand what the opportunities and challenges are in hopes they can formulate their products and services around our industry a little bit better,” added Esser.

Founded in 1972, AFT has deep roots in the financial services industry. The organization currently has 115 members, including FIS, Jack Henry & Associates, PSCU, QCash Financial and D3 Banking, among others.

Zach Duke, president of the Association for Financial Technology
Zach Duke, president of the Association for Financial Technology

“There is a heavy involvement of senior leadership of some of the big companies that kind of run the ecosystem,” said Zach Duke, president of AFT and executive vice president of business development of Safe Systems. “By working with CUNA Strategic Services, AFT member companies have a direct connection to CUNA and will benefit from their network as well.”

Collaboration required

Every fall and spring, explained Duke, AFT hosts a biannual summit where C-level executives gather to discuss the latest technology trends, regulatory issues and other time sensitive topics, such as cybersecurity.

While many of these companies are competitors, Duke said there is a collaborative spirit among vendors akin to the credit union ethos of “people helping people.”

“As vendors, we leave our boxing gloves and brass knuckles at the door and we talk through common challenges,” he said.

Russ Bernthal, president of ProfitStars, reflected after a recent summit that the conferences provide a variety of trustworthy avenues for insights into a rapidly changing industry.

“The greatest thing I have done in my career, and enjoyed the most, is being on AFT’s board of directors,” he said. “The relationships I have built there have been phenomenal. I call many of those people today – and they are competitors. I ask them for advice and they help me, which is really beneficial.”

Esser said CUNA has also benefited from these conferences and the relationships that have been forged.

“If there is a piece of legislation that is coming about that could negatively impact credit unions from a cost standpoint and implementation, we have reached out to several of the AFT members to try and understand what that cost impact might be so we can better represent credit unions on Capitol Hill.”

CUFX quandary

AFT’s mission is similar to that of the Credit Union Financial Exchange, founded in 2011 to develop a free vendor agnostic standard. While both organizations agree on the need for industry collaboration, the paths taken aren’t necessarily the same.

David LaCroix, standards manager for the Credit Union Financial Exchange
David LaCroix, standards manager for the Credit Union Financial Exchange

“The biggest barrier for the fintechs is their current need to integrate across all of the core platforms, which creates a tremendous barrier in terms of cost and complexity restricting best in class products and services from being available to credit unions,” said David LaCroix, CUFX’s standards manager. “We need to adopt a common standard to open the door to cost-effective products and services so that the credit union industry can compete effectively in the financial services marketplace.”

Duke, who remains positive that forward motion will be realized on all fronts, said there are “many pieces to this puzzle” adding that core providers have invested significant monies into infrastructure, which complicates the issue.

In Esser’s estimation, whether or not CUFX will be adopted boils down to the proverbial “chicken and egg” scenario.

“One of the biggest challenges for CUFX is just awareness and adoption,” said Esser. “Credit unions have to drive the adoption and tell the core providers this is what they want before those organizations start listening.”