FinTech Catalyst Incubator is testing new products for credit unions

'The rapidly changing market means the credit union system of the future will not look the same as it does today'

Credit unions in the USA will be able to test fintech solutions through a new catalyst incubator.

The initiative comes from CMFG, a venture capital arm of sector service organisation Cuna Mutual Group and industry thinktank  Filene Research Institute.

The FinTech Catalyst Incubator will test fintech and insurtech products and services aimed at helping credit unions innovate, grow and better serve their members. Credit unions can sign up to participate in testing the new solutions.

“Tomorrow’s financial products and services are being funded, supported, and validated by CMFG Ventures today to improve the financial stability of credit union members in the future,” said Brian Kaas, managing director at CMFG.

“We are committed to the success of our entrepreneur partners and that commitment goes beyond funding, which is why we’re so pleased to partner with one of the country’s leading research organisations, Filene Research Institute, to test companies and ideas for desirability, viability, and feasibility.”

“We have a long and successful track record of executing incubators that test and scale solutions in the marketplace,” said Ryan Foss, senior director at Filene.

“Over the last five years with Filene, more than 100 credit unions have been involved in the creation, launch, testing and adoption of more than 15 products and service innovations across the US and Canada. We’re excited to help position credit unions as drivers of innovation in the financial services industry.”

A group of 12 credit unions will test each fintech product or service, with Filene providing tools and support and eventually publishing the research findings, including next steps and launch recommendations.

“Right now, our first research test is underway with Align, offering members with low- or fluctuating-income levels a loan alternative through an income share agreement to give them an affordable way to borrow,” said Mr Kaas. “Look for test results later this summer.

“We’re also excited to announce our next research test will begin soon with two different companies – Finhabits, exploring how different demographics approach saving for retirement and Steady, exploring the future of work – and we’re looking for credit unions to get involved today.”

The second round of testing began this month July and runs to the end of December.

“The rapidly changing market means the credit union system of the future will not look the same as it does today,” said Mr Foss, “and we believe that this type of incubation testing eliminates the front end risk of testing new products and ideas for credit union members while accelerating decision-making and credit union growth.

“Testing credit unions will have the opportunity to share feedback and insights that could impact the future of a particular product or service, or even the broader credit union space.”

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