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Digital and automated banking has had many in traditional banking hearing footsteps these days. The personal credit lending industry is gaining momentum once again, and with fintech accounting for over a third of the personal loan balances in the U.S. (TransUnion), digital disruptors have had credit unions on the defensive. 

If you think digitization of the U.S. banking system is underway, well, you’re right. Since 2013, banks have lost over 12% of market share to fintech lenders while credit unions have given up 10%.  Consumer access to quick credit has grown quickly thanks to the “app and tap” lifestyle of today’s mobile devices, and credit unions are finding themselves playing catch-up to a new way of doing business. 

According to payment solutions provider Harland Clarke, new financial upstarts and tech entrepreneurs were able to fill the void by innovating and filling the emerging consumer need for easy and convenient access. “We’re witnessing the creative destruction of financial services, and rearranging around the consumer,” said Arvind Sankaran, venture partner at Jungle. “Who does this in the most relevant way using data and digital wins!”

According to TransUnion, banks’ share of personal loans stood at 40% in 2013, dominating the market, with credit unions standing at a 31% share. Within six years, both banks and credit unions’ shares dropped hard to 31% and 21%, respectively.

Now, does anyone wish to guess how that six-year journey went for personal loan fintechs? In those six years, fintech’s market share in personal loans went from a miniscule 5% to 38%, with no slowdown in sight. 

So here’s where the darkness retreats from the coming dawn for traditional lenders. It’s a new decade, a new era, and a different country in which new opportunities arise out of such uncertainty. TransUnion claims 19 million Americans have personal loans as of March 2019, the highest the company has ever recorded. The consumer market itself has grown bigger with unsecured personal loans increasing 150%, an all-time high, for a total of $138 billion. 

That’s a lot of money in a market that’s only getting bigger, and more than enough for credit unions to expand. And that’s where we’re headed. While yes, their market share shrank, credit unions still saw overall growth in total loan balances. Personal loan originations rose 22% in third quarter 2018, according to TransUnion records, with a 20%+ annual origination increase for the fourth consecutive quarter. 

With numbers like that, it can’t be a surprise credit union insiders are beginning to see a spirit of innovation. Many of whom are historically averse to the notion of incorporating fintech have begun to renovate and reload their personal loan departments to adopt many of the alternative credit options offered by fintechs. 

If the phrase “If you can’t beat ‘em, join ‘em” has crossed your mind, you wouldn’t be the only one. Digital and fintech banking is the future. It has arrived and will continue to evolve as the months and years go by. Ease of access, qualifications, use, and speed of service are standards customers have come to expect in this new world, and credit unions will need to deliver. The benefits for credit unions are not small. From a brand perspective, participating institutions will be seen as making the effort to stay up-to-date on what customers want, not to mention a more convenient and attractive alternative for those on the lookout for a new home to hang their financial hat. 

Fortunately, fintech like QCash Financial’s “6 Clicks in 60 Seconds” proprietary mobile app is ready to partner with credit unions to offer platform integration into your mobile banking system, instant underwriting through our proprietary algorithm, and virtually instant approval or denial within one minute and funds, if approved, immediately deposited in your customer’s bank account. 

Jason Laky, Senior Vice President and Line of Business Leader at TransUnion, said, “Consumers have been trained to look online for a fintech lender before they will look for a traditional lender.” On behalf of potential credit union partners, our answer to that would be “Why not partner with that fintech lender, join those ahead of the digital [small dollar] lending game, and enjoy the best of all worlds?”

With that in mind, we invite you to go to website at and request an opportunity to witness firsthand how our mobile app can change your financial institution’s short term lending program.