The NAFCU Journal March-April 2020 - 38

INSIDE NAFCU SERVICES

What Is Your Response to the
Rise of Platform Banking?
By Jeff Chesky

A

s credit unions nationally are
concluding strategic planning
for 2020 and beyond, one of
the common themes we have
heard is whether, and how, they can shift
toward positioning themselves with their
members as a "platform banking" model.

The platform-based business model has
enabled the displacement or disruption
of traditional incumbents in dozens of
industries over the last several years by
connecting users to services they need
through a platform that creates more
value, reduces friction or offers lower
prices. Platform-based businesses have
driven transformational change in areas
of personal transportation (Uber), retail
(Amazon) and hospitality (Airbnb), to
name just a few.
In other sectors, while new digital-first
platforms have displaced or disrupted
incumbents, access to traditional banking products domestically continues to
be dominated by traditional institutions.
This can be explained in part by the fact
that the barriers to entry in banking are
relatively high, evidenced by aspiring
platform banking businesses repeatedly
running into regulatory and compliance
barriers over the last few years.
Over the last year, though, more digital
disruptors circumvented the exercise
of "being" a bank and opted to partner
with depository institutions that enable
them to become a platform banking
business. For example, the high-profile
launches of traditional banking products
such as high-yield savings and checking
38

accounts at Credit Karma, Betterment
and Wealthfront are enabled by partnerships with regional banks such as MVB
and nbkc, and they deepen the financial
relationships these platforms have established with their users.

Why is this relevant to credit unions?
The addressable market these platforms
serve is huge, and growing. Credit Karma
alone serves nearly 100 million members,
including - according to its figures -
almost half of all U.S. millennials.

''

Over the last year, more digital disruptors
circumvented the exercise of 'being' a
bank and opted to partner with depository
institutions that enable them to become a
platform banking business.

''

THE NAFCU JOURNAL  MARCH-APRIL 2020



The NAFCU Journal March-April 2020

Table of Contents for the Digital Edition of The NAFCU Journal March-April 2020

The NAFCU Journal March-April 2020 - Cover1
The NAFCU Journal March-April 2020 - Cover2
The NAFCU Journal March-April 2020 - 1
The NAFCU Journal March-April 2020 - 2
The NAFCU Journal March-April 2020 - 3
The NAFCU Journal March-April 2020 - 4
The NAFCU Journal March-April 2020 - 5
The NAFCU Journal March-April 2020 - 6
The NAFCU Journal March-April 2020 - 7
The NAFCU Journal March-April 2020 - 8
The NAFCU Journal March-April 2020 - 9
The NAFCU Journal March-April 2020 - 10
The NAFCU Journal March-April 2020 - 11
The NAFCU Journal March-April 2020 - 12
The NAFCU Journal March-April 2020 - 13
The NAFCU Journal March-April 2020 - 14
The NAFCU Journal March-April 2020 - 15
The NAFCU Journal March-April 2020 - 16
The NAFCU Journal March-April 2020 - 17
The NAFCU Journal March-April 2020 - 18
The NAFCU Journal March-April 2020 - 19
The NAFCU Journal March-April 2020 - 20
The NAFCU Journal March-April 2020 - 21
The NAFCU Journal March-April 2020 - 22
The NAFCU Journal March-April 2020 - 23
The NAFCU Journal March-April 2020 - 24
The NAFCU Journal March-April 2020 - 25
The NAFCU Journal March-April 2020 - 26
The NAFCU Journal March-April 2020 - 27
The NAFCU Journal March-April 2020 - 28
The NAFCU Journal March-April 2020 - 29
The NAFCU Journal March-April 2020 - 30
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The NAFCU Journal March-April 2020 - 40
The NAFCU Journal March-April 2020 - Cover3
The NAFCU Journal March-April 2020 - Cover4
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