Revamping credit union ops through partnerships

What

Alloy Labs is a consortium for banks and credit unions, which lets its members leverage network effects to co-create products and solutions offering them an edge over competitors. Its members also form partnerships with startups through The Concept Lab, and invest in burgeoning fintechs through the Alloy Alchemist Fund. 

Founded in 2018, Alloy Labs’s more than 70 institutional members hold over $250B in assets, which, it believes, helps it operate in aggregate as a Top 20 bank. Alloy Labs hosted its first credit union-focused event last week in Chicago, digging into the ways Alloy Labs can solve problem sets for credit unions’ unique client segments.

Why

According to Jason Henrichs, Alloy Labs’s Founder and CEO, while credit unions and community banks exist and serve their members well, the needs of their members are changing. Identifying the right product and servicing partners to overhaul those parts of the business is key to pulling off those operational revisions.

And, what’s more, since the collapse of Silicon Valley Bank and First Republic, “the biggest banks in the country are sucking up their deposits,” Henrichs said, shaking up the playing field between large incumbents, smaller established FIs, and neobanks.

“For credit unions and banks, the realization is that if we are going to be able to solve those needs for our customers, we need to rethink our delivery model,” he said. “That means working together” such as through a consortium like Alloy Labs.

How

Alloy Labs handpicked the credit unions it’s working with in order to optimize for constructive working feedback. This is an inherently operational question, as certain credit unions are structured in such a way that furnishes more granular and expert-driven insights. In particular, the credit unions it’s working with tend to feature an executive or leader in charge of member experience, which bolsters product feedback, since product and experience overlap significantly in a digital era. “Their feedback will absolutely help us move faster,” Henrichs said.

The interfacing meetings between Alloy Labs’s member banks and the credit unions centered around the theme of “Family Matters,” a suite of use cases through which Alloy Labs’s products and partners can solve unique pain points for credit union members. Discussing aging populations, generational transitions, and almost 80 different areas, their conversation dove into specific ways the consortium and CUs can work together.

For example, the Alloy Labs team identified financial safety solution Carefull as a potential partner for family- and aging-concerned credit unions. The Postage, an online platform for storing family plans and other sensitive documents, is another viable partner Henrichs named. Interest in these partnerships proves that credit unions are looking beyond holding deposits and making loans, and instead are “embracing this idea of… improving the lives of members,” Henrichs said.

Through these early-stage partnerships, Alloy Labs members and credit unions are helping deepen the kinds of partnerships Alloy Labs’s partners serve, while also helping credit unions scale successfully. Henrichs anticipates continued interfacing between these stakeholders in the coming year, leveraging their entrenchment within communities as an opportunity to scale. “The beauty of having an existing business is how to deepen and extend relationships, as opposed to build entirely new ones,” he said.