Navigating Economic Challenges With Fintech Partnerships

In the current economic landscape, financial institutions face a minefield of challenges like market volatility, shifting consumer behaviors and the increasing need for digital transformation. Though these challenges have created a complex environment for FIs, including credit unions, these factors also present opportunities for improvements and valuable partnerships.

One FI taking advantage of these opportunities is $2.8 bilion Credit Union of Southern California, based in Whittier, California. To optimize services and enhance member experiences, CU SoCal established a partnership with SavvyMoney in December 2020 that benefited members and the credit union.

CU SoCal leveraged SavvyMoney’s solution to launch a pre-approval auto finance marketing campaign—a strategic choice. Running from Aug. 23 to Oct. 16, 2022, the campaign personalized experiences, boosted offer visibility, maximized engagement and simplified user access.

Astounding Success in a Challenging Environment

Fintech partnerships with traditional FIs are on the rise. According to recent Economist Impact research, almost half of banks have forged a fintech partnership in the last few years. FI/fintech partnerships bring together the best of both worlds: the established trust of the conventional institution and the cutting-edge tech tools developed by the fintech. Credit unions that enter such partnerships save time and money because they don’t have to build solutions in-house, and the fintech can scale its operations because of the credit union’s member base and infrastructure.

CU SoCal capitalized on the benefits of a fintech partnership with SavvyMoney. Key results of the pre-approval auto loan campaign collaboration include:

• A significant 74% increase in application volume from digital channels. As consumers increasingly prefer digital-first options for their banking needs, CU SoCal's ability to adapt to shifting demands and attract members in a changing economic landscape drove campaign success.
• A 53% increase in total funded loans from digital channels, representing $2.4 million of incremental auto loan volume. This growth showcases CU SoCal's capacity to capitalize on market opportunities and its resilience amidst uncertain economic conditions.
• A nearly 50% offer click-to-application completion rate, surpassing the industry average of 20% for processes that require extensive authentication. CU SoCal's commitment to simplifying the member experience and reducing friction played a crucial role in achieving this outstanding conversion rate.
• Immense success with retargeting email efforts, boasting a 70% open rate and a 16% click-through rate. These rates are much higher than the average open and click-through rates across industries (38% and 8%, respectively, according to Hubspot.) These numbers demonstrate CU SoCal's ability to effectively engage current members and nurture their interest even during economic uncertainty. Retargeting established customers is especially advantageous because acquiring new customers can cost five to seven times more than customer retention.

By using SavvyMoney’s technology, CU SoCal was able to better serve its members while driving revenue and growth for the institution.

Benefits and Achievements

Despite industry challenges, CU SoCal’s record-breaking performance during the campaign period showed organizations that adapt to meet consumer needs are more resilient during difficult times. The campaign enhanced member experiences and improved CU SoCal’s marketing and lending processes—a win-win.

Another CU SoCal win? Data. SavvyMoney’s solution used robust campaign tracking that gave the team insights into what aspects of the campaign worked well and what the team could optimize in the future. Access to this data also enabled the CU SoCal team to make informed decisions about how to effectively derive value from their pre-approval marketing strategy and improve customer experiences.

Future Outlook

As consumers’ digital appetites continue to increase (almost 80% now prefer to bank digitally!), the ongoing partnerships between FIs and fintechs will remain important. The smartest FIs will leverage the data gathered through fintech solutions to proactively determine what consumers crave.

Suppose such data indicates members want credit score solutions. In that case, credit unions can partner with a fintech that offers a tool to directly access their credit scores. In the face of changing economic conditions, fintechs’ continued commitment to empowering FIs and fostering educational initiatives will strengthen customer relationships.

The achievements and benefits CU SoCal derived from its partnership with SavvyMoney prove the merit of FI/fintech partnerships: improved resilience, adaptability and member engagement. To meet the evolving needs of both consumers and financial institutions in today’s economy, credit unions must prioritize continued collaboration and innovation.

JB Orecchia is president/CEO of SavvyMoney. Since 2011, JB and his team have built SavvyMoney into an industry-leading credit and lending tool that today integrates with 40 digital banking platforms and supports over 1,100 financial institutions with their goal of providing financial education and personalized lending. JB has more than 34 years of experience in consumer finance, fintech and interactive media. He started his finance career in 1988 with 10 years in various senior roles at Household International in lending and marketing. In 1998, he saw an opportunity to make credit reports accessible over the internet and joined the original senior team at FreeCreditReport.com/Experian Consumer Direct. As EVP of Partnership Marketing, he led the team responsible for business development and online marketing of the direct-to-consumer credit report and score product for 10 years. To expand on his digital marketing experience post-Experian and pre-SavvyMoney, JB had the opportunity to be Vice President of Marketing for Disney Online, where he directed online marketing, CRM, research and analytics initiatives.