• Dan Micale

Credit Unions, Ethics and Technology


There’s been some discussion lately about whether fintech startups are more “ethical” than traditional financial institutions. Ron Shevlin of Cornerstone Advisors does a pretty good job of summing up the situation here on the Forbes website. Of course, Shevlin is talking about traditional financial institutions as a whole. He doesn’t account for the uniqueness of credit unions. And credit unions are unique, to be sure.

Let me start by acknowledging that there are a few bad apples in every basket – the fintech startup basket, the bank basket and the credit union basket. That’s because all of these organizations are made up of live people, and sometimes people stray off the straight and narrow. There are crooks in every industry.

I believe that one thing that may make fintechs appear to be more ethical is their ability to create customized user experiences using the latest technology. This makes it look like they have the best interests of the consumer in mind when in reality, all they’re doing is intelligently applying the technology tools they have at their disposal.

This all comes down to mindset. Allow me to explain.

To really understand what’s going on, I think we need to go all the way back to the dawn of the Industrial Revolution. Mass production changed the way goods were manufactured. But it also changed the way goods were consumed. Ford was able to roll thousands of identical Model Ts off the assembly line, which made them more affordable. But if you wanted a Model T, you were stuck with one that was just like every other Model T on the road. So began the era of “one size fits all.”

This mass-production way of thinking eventually crept into financial services. If you were a bank or credit union, you offered a menu of products – the same menu to everybody – and hoped that menu would meet the needs of enough consumers. And for consumers, this was a “take it or leave it” proposition. Financial services became just like the Model T.

Fast forward to 2019 and now the technology exists that makes it easier than ever to tailor a very customized user experience – in virtually every industry, including financial services. Fintech startups have seized this moment, while most traditional financial institutions are still stuck with their mass-production mindsets.

It’s understandable to a point. When you do something the same way for a hundred years, it can be difficult to even realize you need to change, much less actually institute those changes. But change, credit unions must. Change or perish.

I can use my company, DaLand CUSO, as a good example. We’re a fintech and we’re a CUSO and we don’t sell any “products.” What I mean by that is that we don’t throw an off-the-shelf software product at you and expect you to make do with however we decided to build it.

Instead, we engage each credit union client on a very intimate level. We want to be sure we understand the unique needs of the credit union and, by extension, the unique needs of its members. Then we set out to build a very customized solution to meet those specific needs.

Sure, we use some common building blocks as we create these solutions. But each client’s implementation of DaLand solutions looks very different from the next.

This is the approach credit unions need to mirror. You’re not in charge anymore; the members are in charge. And if you don’t give each one what they want, they’ll find a more progressive financial institution (or fintech startup) that does.

The age of advanced customization and personalization is finally here. Credit unions can’t afford to be left behind.


Dan Micale is the Chief Relationship Officer at DaLand CUSO.

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