In this premier episode of Finopotamus Unscripted, host John San Filippo interviews three experts in credit union fintech investing: Nick Evens from Curql, Ben Maxim from Reseda Group, and Brian Kaas from TruStage Ventures. The discussion centers around the investment process, emerging technologies, and predictions for the future of credit unions.
Each guest introduces their organization. Curql is a family of strategic investment funds by credit unions for credit unions, focusing on transformative technologies. Reseda Group, a CUSO owned by MSU Federal Credit Union, invests in and builds fintech products implemented within their own credit union. TruStage Ventures is the venture capital arm of TruStage (formerly CUNA Mutual Group), concentrating on fintech solutions that benefit credit unions and their members.
The conversation turns to the vetting process for potential investments. All three emphasize the importance of not just a good idea, but also a strong founding team that understands and is a good fit for the credit union industry. Red flags include founders misrepresenting their traction within credit unions and existing investors declining further investment.
While the guests see many impractical pitches, they also acknowledge the difficulty of monetizing some good ideas. Due diligence includes evaluating financials, technology, and total addressable market (TAM), with inflated TAMs being another common red flag. They suggest credit unions consider adopting an investor mindset even when simply evaluating vendor solutions, especially regarding the often-opaque financial health of fintechs.
The discussion then shifts to member engagement, with all guests agreeing that the term lacks clear definition. They advise credit unions to ask vendors what they specifically do and how their solutions demonstrably improve member engagement rather than relying on the buzzword itself.
Similarly, artificial intelligence (AI) is deemed ubiquitous, with the guests cautioning credit unions to understand how AI is used within vendor solutions to avoid future complications. They foresee AI becoming a standard underlying technology similar to mobile access today. Concerning big data, the guests highlight the challenge credit unions face in normalizing data from their legacy systems. While AI can help, strong partnerships with specialized companies are crucial.
Regarding open banking and Rule 1033, Maxim expresses hope that core system providers can help credit unions handle the compliance burden and create opportunities by facilitating data exchange. Evens notes the uncertainty around the rule’s current status and implementation.
The hype around blockchain, particularly associated with cryptocurrency, has cooled down. While all believe blockchain still holds potential for credit unions, especially for identity management, they don’t foresee it disrupting the industry immediately. They compare its adoption to that of relational databases—important underlying technologies that don’t dominate everyday discussions.
Embedded finance, despite being less discussed recently, is considered a significant opportunity, especially for lending, by all three guests. They emphasize the need for credit unions to integrate with embedded finance platforms to remain competitive as members increasingly conduct financial transactions within non-financial apps like Amazon and Walmart’s automobile marketplaces.
Finally, the guests offer their predictions for the future. Maxim sees the current environment as an opportunity for credit unions to invest in innovation. Evens foresees fewer but more technologically advanced credit unions surviving. Kaas encourages credit unions to seek out partnerships and look beyond credit union-specific conferences to understand broader industry trends, advocating for attendance at fintech events like Fintech Meetup. The three groups are planning a collaborative networking event at Fintech Meetup 2025 for credit union participants.