BOSTON–A new analysis suggests fintechs “may be talking themselves out of credit union deals.”
According to the just-issued PYMNTS Intelligence report “Credit Union Innovation Readiness: How Fintechs Are Shifting Their Partnership Strategies, developed in collaboration withVelera, half of fintechs sell to credit unions, and 42% say they encounter no real obstacles—even as non-sellers point to compliance and product-fit concerns.
PYMNTS Intelligence said that “gap between perception and reality” runs throughout its survey of 100 fintech executives in the United States whose firms serve banks, credit unions, and individual consumers.
Increase Found
The organizations said the report found that 48% of fintechs that distribute end-user products via partners now work with credit unions, up from 40% in 2024—a 19% increase.
“However, just 16% of fintechs do so with national banks, a 56% year-over-year drop. Large institutions with deep pockets are increasingly building in-house, nudging fintechs toward member-owned lenders and platform businesses,” PYMNTS Intelligence said.
Among fintechs that already sell to credit unions, 42% report no impediments at all. PYMNTS Intelligence said it further found that among the remainder, the challenge fintechs encounter most often is credit unions’ slow decision-making processes, at 38%, followed by complex rules and regulations, at 34%.
Additional Findings
The survey also found:
• Among fintechs that do not sell to credit unions, the biggest reason cited is not having products and services that credit unions like, at 20%, followed by compliance and regulatory burden, at 18%, and long implementation timelines, at 12%.
• Fintechs that sell to credit unions are more than twice as likely as peers to frame their edge as helping financial institutions compete, 34% versus 14%, suggesting the strongest pitch is strategic, not technical.
Convenience Helps Drive Demand
According to PYMNTS, other findings “map where attention and budgets are moving. Fintechs say end-user safety and convenience drive demand.”
The findings show that artificial intelligence-operated customer support chat leads at 38%, with call center or customer service tools at 30%.
Security features are next, PYMNTS Intelligence stated, finding card transaction management and alerts lead at 31%, followed by biometric authentication or digital identity at 26%, as well as loyalty and rewards at 26%.
Partnerships are also broadening beyond financial institutions, as 80% of fintechs now work with software platforms, up 24% from 2024, and 73% partner with merchants or marketplaces, up 17%.
The Takeaway
“The takeaway for vendors is less about inventing a breakthrough than about being regulation-ready and packaging existing capabilities, like fraud controls, authentication, alerts, and customer support, so they map to credit unions’ governance and decision cadence,” PYMNTS Intelligence stated. “Framed that way, the data suggests fintechs should emphasize measurable competitiveness gains for the institution, demonstrate how compliance is embedded, and price solutions for constrained budgets without skimping on risk controls.”
The report’s figures also suggest partnership appetite on the other side, as credit unions want embedded tools that upgrade member experience without entirely overhauling core systems, PYMNTS added.
