Launch underway in Latin America with innovation-as-a-service, digital lending programs
February 07, 2024
MADISON, Wis.—In the boldest step put forth yet to achieve its Challenge 2025 goals, World Council of Credit Unions (WOCCU) today launched a new initiative that allows credit unions in emerging markets to test innovative digital products and solutions that could benefit members and attract new customers.
Introduced in Latin America, “Hub C” will offer a space for credit unions to connect and collaborate on data-driven Proofs-of-Concept (POCs) aimed at providing customer-centered solutions that increase financial inclusion among underserved populations, including women and youth.
In partnership with FinConecta, Hub C is launching an “innovation-as-a-service” marketplace. Starting with Asociación de Instituciones Rurales de Ahorro y Crédito, Inc. (AIRAC), WOCCU’s Direct Member in the Dominican Republic, the marketplace gives AIRAC member credit unions the ability to explore, evaluate and collaborate with fintech vendors to access cutting-edge technologies and solutions that enhance operational efficiencies, member experiences and overall competitiveness.
The sandbox environment allows the credit unions to experiment and test those solutions. As part of the marketplace, there are solutions addressing digital lending, identity, savings, fraud prevention, digital banking, payments and customer engagement. These solutions are provided by multiple fintechs from around the world.
“Millions of credit union members and potential new customers lack access to the digitally-forward financial products and services that define the way we live and conduct business. While it is not realistic to have a single, standardized design for data, digital products, credit scores and other enablers, reducing the barriers to innovation by creating a sandbox environment is imperative for credit unions to test and replicate innovative solutions for specific member segments, such as women-owned businesses or small farmers,” explained Angelina Tracy, WOCCU Vice President of Strategic Growth and Partnerships.
Hub C is also partnering with CB Cooperativa, a credit union in Ecuador, on piloting the development of a credit scoring algorithm to automate lending and create customer profiles that could drastically expand loan offerings to specific segments of both new and repeat customers through the use of machine-learning technology. The vision is to offer this solution to all credit unions in Ecuador, with the potential to expand to credit unions in other Latin American countries.
“There has never been a more compelling need for credit unions to adapt and innovate faster and better to serve their members. World Council of Credit Unions cannot accomplish its Challenge 2025 goal of advancing the digitalization of the global credit union market without taking some bold steps forward. We want Hub C to spur innovation at a faster pace–especially for small and medium credit unions in developing markets—who reach over half of all credit union members worldwide. We often talk about innovative and ‘fail-fast’ approaches to drive greater financial inclusion, but we are slow to act. Credit unions must keep up with rapidly evolving digital ecosystems and offer relevant products to their members, or risk falling further behind. There is so much unrealized potential in our model. But this requires greater co-investment, co-learning and real cooperation among cooperatives, true to our principles,” said Elissa McCarter LaBorde, WOCCU President and CEO.
To learn more about Hub C, visit our page on the new initiative at woccu.org/hubc.
