By Cassie Schock
Partner
de Risk Partners
The New Reality for Credit Unions
Credit unions are under pressure to keep pace with digital transformation. Members now expect seamless digital payments, faster lending decisions, and personalized financial tools. Fintech partnerships have emerged as the fastest way to deliver these innovations without building everything in-house.
While fintechs bring speed and creativity, they also bring new categories of risk. Vendor oversight, data security, regulatory compliance, and member trust are all on the line. For credit unions, the challenge is clear: how to innovate without compromise.
Managing Compliance in Partnerships
Every fintech collaboration introduces responsibilities. Even when a fintech provides the technology, the credit union remains accountable to regulators. That means:
- Vendor due diligence: verifying a fintech’s compliance controls, financial stability, and track record.
- Data privacy and security: ensuring sensitive member information is safeguarded.
- Regulatory alignment: meeting expectations of the NCUA, CFPB, and state regulators across products that may blur the lines between traditional and emerging financial services.
- Operational resilience: preparing contingency plans if a fintech experiences downtime, legal issues, or reputational harm.
Without a structured framework, these risks can outweigh the benefits of innovation.
Best Practices for Risk-Ready Innovation
1. Strong governance
Policies for evaluating, approving, and monitoring fintech partnerships should live at the board and senior management level. This ensures fintech collaboration is part of the credit union’s risk appetite framework.
2. Layered due diligence
Go beyond standard vendor questionnaires. Review the fintech’s compliance culture, sanctions screening, fraud monitoring, and incident response plan. This depth of review protects members.
3. Ongoing oversight
Partnerships cannot be “set it and forget it.” Credit unions should review fintech partners annually, test controls, and escalate concerns. Tools for compliance automation and third-party monitoring can reduce effort while increasing transparency.
4. Align with member trust
Communicating the steps your credit union takes to vet fintech partners reinforces that innovation is being delivered responsibly.
Turning Risk into Advantage
When managed well, fintech partnerships can become a competitive differentiator. Credit unions that demonstrate both innovation and discipline stand out to regulators, fintechs, and members.
Some fintechs prefer working with credit unions that show strong compliance leadership, because it gives their products credibility. This is where collaboration becomes a true advantage, credit unions provide trust, and fintechs provide tools.
Final Thoughts
Innovation does not require choosing between speed and safety. With the right governance, due diligence, and oversight, credit unions can build fintech partnerships that expand possibilities without compromising compliance.
The future of credit unions will be defined not just by what services they offer, but by how responsibly they deliver them.
To learn more or connect with de Risk Partners, visit their website.
About the Author:
Cassie Schock
Partner
de Risk Partners
Cassie Schock is a fractional Chief Compliance Officer and Partner at de Risk Partners, where she helps credit unions and community banks design exam-ready compliance programs that scale with innovation.