MADISON, Wis. – CMFG Ventures, the venture capital arm of CUNA Mutual Group, and the Filene Research Institute said they have launched the FinTech Catalyst Incubator to test new fintech products and services at credit unions.
The FinTech Catalyst Incubator will test fintech and insurtech products and services that could fill credit union system gaps and create new opportunities for credit unions to innovate, grow, and better serve their members, according to the organizations. CMFG Ventures and Filene said credit unions interested in testing these solutions can sign up to participate in testing an innovative program or idea to help meet a member need.
“Tomorrow’s financial products and services are being funded, supported, and validated by CMFG Ventures today to improve the financial stability of credit union members in the future,” said Brian Kaas, managing director, CMFG Ventures. “We are committed to the success of our entrepreneur partners and that commitment goes beyond funding, which is why we’re so pleased to partner with one of the country’s leading research organizations, Filene Research Institute, to test companies and ideas for desirability, viability, and feasibility.”
‘Successful Track Record’
Added Ryan Foss, senior director with the Filene Research Institute, “We have a long and successful track record of executing incubators that test and scale solutions in the marketplace. Over the last five years with Filene, more than 100 credit unions have been involved in the creation, launch, testing and adoption of more than 15 products and service innovations across the U.S. and Canada. We’re excited to help position credit unions as drivers of innovation in the financial services industry.”
Product & Service Testing
According to the organizations, each fintech product or service will be tested by a group of up to 12 credit unions of varying asset sizes, locations, and consumer demographics for six months. During this time, participating credit unions will offer their members the new fintech product or service while receiving tools and support from Filene Research Institute to test a unique hypothesis. According to CMFG Ventures and Filene, these credit unions get a head start on bringing needed solutions to their communities and can shape final outcomes by sharing feedback and insights throughout the testing period. Research findings, including next steps and launch recommendations for viable products, will be published by Filene Research Institute upon completion of the testing period.
“Right now, our first research test is underway with Align, offering members with low- or fluctuating-income levels a loan alternative through an income share agreement to give them an affordable way to borrow. Look for test results later this summer,” said Kaas. “We’re also excited to announce our next research test will begin soon with two different companies – Finhabits, exploring how different demographics approach saving for retirement and Steady, exploring the future of work – and we’re looking for credit unions to get involved today.”
Eliminating Front-End Risk
According to the organizations, the second round of testing will begin in July and run through December.
“The rapidly changing market means the credit union system of the future will not look the same as it does today, and we believe that this type of incubation testing eliminates the front-end risk of testing new products and ideas for credit union members while accelerating decision-making and credit union growth,” said Foss. “Testing credit unions will have the opportunity to share feedback and insights that could impact the future of a particular product or service, or even the broader credit union space.”