Build versus buy versus partner. That’s a decision frequently arising in business.
Many start, with a “build or buy” mentality, missing out on the intrinsic value of partnerships. Partnerships come with many advantages, including lower capital outlay, leveraging your partner’s expertise, increasing your marketing potential with joint sales, and lowering overall risk deploying the solution.
Many credit unions are taking a partnership approach for technology solutions. Fintech is a big animal. Why not leverage a partner’s expertise in these fields? The community bank or credit union gets to offer a new, attractive service without the cost of buying software or developing a new solution (Fintech talent does not come cheap!); the partner grows its customer base, and profits can be split, creating new revenue streams and opportunities for both parties.
Redwood CU sets a great example for strategic partnerships. It works with one of its state senators and a local media outlet to create and publicize support for members and others in the community affected by wildfires. Digital CU created an innovation center to help local fintech startups and is learning as much as it’s helping to create. Tennessee Valley Federal CU partnered with Growth Foundation to create crowd-sourced loans for local small businesses. Other Fintechs have created partner plans to work with legacy financial firms for mutual benefit. Platforms like Kabbage and Fundation have offerings specifically tailored to help community banks and credit unions compete using the latest technology.
Allegro Lending Suite utilizes strategic partners to generate passthrough value or time savings to its end users. “As Allegro Lending Suite grows, so do our partnerships. We connect to most of the major credit union and bank core systems, so we have lots of partnerships in that area,” Pete Vehko, Vice President of Business Development for Integrated Lending Technologies, Allegro Lending Suite’s parent company.
Two that have been particularly integral to Allegro’s success have been RouteOne and Dealertrack. Vehko continued, “All franchise car dealers nationally use one or both of the systems to submit applications to lenders, so we are able to bring community banks and credit unions on a level playing field with the large banks and captive finance companies.”
Previously, ILT’s sole focus was on indirect lending, but as the company moved into direct lending and web-based unsecured lending, data partners, like DMS, Carlton Calcs, LSCI, and Open Lending have enhanced the user experience, so Allegro clients gain true efficiencies in their processes.
“The strategic partnership list will grow as we add clients and add modules for existing clients,” Vehko concluded. “Each lender has a unique situation, and they want to streamline the process. We can add those access points in Allegro to save the lender a step, and then we can offer those services to existing lenders if they want it in their process.”