The moment that stuck with me came early when Dan Hanks, senior vice president of product at i2c, described how quickly a member can drift away from their credit union today. Not out of frustration or dissatisfaction, but because a new card, a new app or a financial tool can be activated and used within minutes with your competitors. One click, and the relationship that used to anchor everything starts to slip. It was a small comment in the conversation, but it framed the entire discussion in a surprisingly human way.
Sarah Snell Cooke leaned into that tension, asking what this splintering of financial relationships really means for credit unions now navigating members who use Chime for one thing, Apple Pay for another, and a credit union for something else entirely. Dan’s response set the tone for the rest of their talk, highlighting the growing gap between what members expect and what many institutions can deliver.
What followed was a realistic look at the space credit unions occupy today. Dan pointed out that experience has become the new battleground, and younger members, especially, will not wait seven to 10 days for a card to arrive when they can tap to pay within minutes elsewhere. Yet the conversation did not focus on limitations. Dan shared how even smaller institutions are modernizing through flexible partners and modular services, giving them access to capabilities they once assumed were out of reach.
Sarah pushed the discussion to the challenges leaders face daily: legacy processors, rigid contracts, and outdated systems that were once considered good deals but now slow growth. Dan’s take was refreshingly straightforward. Credit unions do not need to beat the biggest banks at tech. They just need to stay competitive enough for their core advantage, the member relationship, to matter.
Their exchange landed on a clear truth. The future favors credit unions willing to choose the right partners, shed what no longer serves their members, and lean into the experience that has always set them apart.
NOTE: AI is human, so it ain’t perfect. This transcript will have errors; it will receive its punishment later.
Sarah Cooke
Hello and welcome everybody. My name is Sarah Snell Cooke. I’m your host here at The Credit Union Connection. I’m here today with the i2c Global Product Director and credit union specialist, Dan Hanks. Welcome.
Dan Hanks
Thank you. Nice to be here as well.
Sarah Cooke
Awesome to meet you, especially, a credit union specialist. So why don’t you come with a little more about yourself and what i2c does.
Dan Hanks
Sure. My name is Dan Hanks. I’m a senior vice president here at i2c for product. i2c is a global issuer processor, so we’re headquartered in Silicon Valley, about 25 years old now, and we provide the technology infrastructure to drive products for various banks, credit unions and fintechs around the world. So think credit products, debit, prepaid, core banking, money movement and the like. We’re a modern processor. So all cloud based on a modern, global tech stack.
Sarah Cooke
Yeah, yeah, awesome. We got to have modern. Gotta be cloud. And so one of the things, obviously around credit unions and those other Financial Institutions are, you know, the idea of a primary financial institution just doesn’t exist anymore. The entire it’s just, it’s just splintered, because there are so many fintechs and Neo–banks that offer just different things. And I know my kids have five different payment systems they pay me back with when they borrow money, you know, so, so with that splintering, talk about how that evolution has been affecting credit unions?
Dan Hanks
No, it’s absolutely the case. It’s, you know, the idea of having one financial institution, maybe your local one you do everything with that’s just long gone, right? Whether it’s obviously credit cards you have from everywhere you know, could be other fintechs, You know, maybe you have your primary account as a member at a credit union, but you could also have a Chime account or something along those lines. The real impact on credit unions has been that they have to be much more competitive on products, right? The idea of just being local, having the member relationship, that’s still a strength, don’t get me wrong, but you really need to be more competitive because it’s so easy to apply and receive products from anyone else around the world. And I think that’s something we’ve seen some credit unions struggling with to try to be competitive on products, on features, on technology, where, you know, they were really, really focusing more on the relationship before.
Sarah Cooke
Yeah, and the thing is that relationship is still there, and it’s still important as the relationship, and it’s even sometimes more about the experience than the APR APY and so. But you know, liquidity, of course, has been an issue for at least a few years now, more or less. But what does this mean for the war for deposits?
Dan Hanks
Yeah, I mean, you know, the liquidity thing is really downstream of the competitive elements, right? Think about it. You know, if you have, if you’re retaining all of your members, if you’re growing your member base, then liquidity is much less of an issue, right? You have your deposits, and from that, you not only have your security, but then you can be doing lending and all the other things off the back of it. So, it’s really downstream of that competitive process. And you know, I think that’s we’re seeing, especially for younger consumers, that they’re looking for the cutting-edge features, which are becoming table stakes, and sometimes they’re not finding with the credit unions, and especially some of the small to mid-sized ones. And that’s really been a challenge, because, you know, you have your natural attrition, and if you’re not bringing in that new stream of younger members, that really leads to some downstream problems.
Sarah Cooke
And so talk about the role of technology in all this.
Dan Hanks
Yeah, I mean, a lot of it are things that really were cutting edge a few years ago, but are becoming table stakes. I’ll give an example from the i2c platform. So we have what we call instant issuance and push provisioning, which means when you get a card, a debit card, a credit card, we can instantly send you via email, the card number. You can use it for online transactions. One button push on the app. You can push it into the wallets, Apple, Google, Samsung, literally five minutes after you’re approved, you could have the card in your apple, watch be making a purchase at the point of sale. That’s the kind of technology that, especially younger customers and members are really expecting. I mean, think about the old fashioned way, right? You apply for the card, let’s say a credit card. Great. You’re approved. It’ll show up in the mail in seven to 10 days, right? But we live in a world where everybody is I can get on my app. I can have DoorDash here in 20 minutes. I can order something on Amazon and have it before I wake up in the morning, sitting on my front porch. That’s just the expectation. So those are the kind of things where, hey, I wanted the card and I applied for it, I want to use it now. And I think those are the kind of examples that you know that was a cool feature five years ago. Now it’s almost expected. And if you know the credit union member, can go online to Citi to Chase to Cap One and get that immediately. And even in some cases, maybe some other credit unions or banks in their area, even smaller ones, are starting to roll that out. So that’s an example where it’s what’s becoming a more basic technology, but you find a number of credit unions stuck on really old legacy processes, your old mainframe types, and they either don’t have those features, or they’re getting in sort of a cookie cutter approach, where they don’t have flexibility to build it with the right member experience that they want.
Sarah Cooke
Yeah, absolutely interesting talking about tied to legacy programs. Going to go heading to Money2020, in a couple of days. But, yeah, I mean, we’re talking about credit unions getting stuck in some of those processor contracts, and you know, the add ons that they can get there that maybe, you know, they got a good deal to start with, but is it a good deal for the members? And then it’s not for the credit unions either. And so how can credit unions adapt their way of thinking about this? Because instead of taking those package deals and really like, think about how to integrate the best technology they can possibly get.
Dan Hanks
Yeah, I think one of the things they really need to find the right technology partners who have flexibility to work with them. And I think that’s one of the big things, that even when you find the legacies have some technology, it tends to be very rigid. It tends to be more cookie cutter. And, you know, the credit unions really want to be able, the ones we’ve been working with, really want to be able to customize it in some ways for their own members, right? That member experience is so important. Not just do you have the feature, but what does that experience look like? How does it fit into everything else that the credit union does? And that’s really the type of flexibility that we tried to offer. But you don’t always find, you know, one issue with the legacies also is that, you know, they tend to be very large, so some of them aren’t even interested in working with the smaller credit unions. And if it is, it’s more, take it or leave it. And if you didn’t want it, then that’s fine. You’re not large enough for me to matter, right? To matter to me, I should say, yeah. And I think that’s really one of the things you know, to have that flexibility, to be able to build it out the way you want it.
Sarah Cooke
And that technology that they’re forcing on the smaller credit unions, too, it’s got to be 50 years old. I mean, we’re going to have, like, I know the comparison A while back I heard was to the FAA, when those planes, when the FAA system went down, and the planes were just like, what do we do? It could be very well. The same thing for the credit unions and other banking institutions as well. So how far are credit unions on their way to have a fighting chance to remain relevant for their new, current and up and coming memberships.
Dan Hanks
You know, I think we’re seeing more and more that are starting on that journey. You know, it can be intimidating, because, you know, the issue for the credit unions are, they don’t really have scale, right? They can’t build it in house. They don’t have technology teams and all that. So you need to find the right partner to be able to do that. And I think the fact you know that it looks so intimidating kept some slow going slow, more slowly than they probably should have. But we’re seeing an increasing number right now we’re working with that are realizing, hey, we have to get we have to start going down that road. You know, we have to get there. We’re already falling behind, and five years from now, it’ll be a disaster if we don’t have it. So we’re seeing that. The other thing we’re seeing is, and we work with them, is they need partners who can also provide them scale. So part of that is technology, right? Who has the existing technology they can leverage without having to build? But in some cases, it’s also other managed services, like, you know, do you need a call center? Is it fraud services, for example? Is it other type of outsourced technology services to be able to be competitive? I mean, the other piece we’re seeing is you still have some credit unions who are in agent bank relationships, right, where they’re somebody else is completely managing the relationship, usually on the credit card side, and they’ll get a certain commission for every card they do and so forth. Obviously, you’re giving up a lot of money to the agent bank that’s doing that, but you completely lose control over the experience and the underwriting. So, that’s another one where we’ve had a number of credit unions felt like they’re too small to self issue. But we’ve been able to work with them to say no. By outsourcing services, by doing these sort of things, you can actually self issue without needing to add 20 new people at the credit union to be able to do it. And again, much better from a P and L point of view, but even better from a member experience point of view, right?
Sarah Cooke
And you touched on. My next question was, how can credit smaller credit unions afford this? I mean, I have a lot of credit union or potential credit union business partners come to me and say they only want to work with the mid size credit unions, and those are between 1 billion and 5 billion, because that’s, you know, kind of the people think of the banking industry. But credit unions aren’t that size, at least not many of them. So how can smaller credit unions afford I think it’s really interesting. You’re working with the smaller credit unions to make this happen?
Dan Hanks
Yeah, the small and even some of the mid-size too. You know, we have what we call modular services. So we work with some larger credit unions where they say, like, you know what, I already have my own fraud team. I already have my own call center, and that’s fine. They can keep it all in-house, but then we have the ability to do everything end-to-end. For some of the smaller ones, like on the fraud side, we have a full experience fraud team, leveraging a lot of AI in that space. We can either advise banks and credit unions on their fraud strategies. We have some who just outsource it to us, and we just run it for them. But that’s the type of scale, right? You probably, as a small credit union, you can’t afford to hire a couple of experienced fraud people. Frankly, you can’t afford to have them working 24/7, so, you know, things like that. Even in our call center, we charge per minute, not per seat, for example. So that gives a lot of scale advantage, where you’re not paying for people to sit around all day, not taking calls, right? So things like that. And then we have a very flexible technology platform, self-service. You don’t need a huge team to do it; things like that help it become much more cost-effective. Now, maybe at the very smallest, it’s still probably, you know, it’s a little too large, but it lets you get even potentially below that billion-dollar size, where credit unions realize, hey, I can actually run my own business here.
Sarah Cooke
Yeah, and that’s something that’s so essential. For smaller credit unions to survive. And they’re so important, I mean, but dollar-wise, they aren’t important to the economy necessarily, on a larger scale, but to their local economies. They may be the only institution there, other than, you know, paid, you know, payday lenders and check cashers and stuff like that. So where so for those who haven’t really started this transformation yet, where should credit unions start so they can remain attractive for the future consumers?
Dan Hanks
Yeah, I think it’s two things. First, you know, internally, you have to make the decision at the at the board level, at the strategic level, like, you know, what products would we want to be able to manage ourselves? What do we want to be able to do ourselves? What are we okay with completely outsourcing or maybe not even issuing and then it’s really the question of finding that, finding those partners, right, finding a flexible, more modern partner who’s willing to work with some of you at with someone at that size. And then you really start working together to figure out, how do I build this business? Right? You might need to add a little bit. Might need to add a person or two, or a couple of people, but not 20, not 50, right? And really, the payoff is there. So, I think it’s, you know, making that decision internally that, you know, we need to step up to the next level with this and then really finding the right partner.
Sarah Cooke
Yeah, the right partner is so important because, as you mentioned earlier, credit unions don’t have that internal tech team in general to build these things. So I can’t believe we’re already wrapping up here, but I always allow my guests the final thoughts. What would you like to leave our credit union audience with today?
Dan Hanks
No, I think one thing is to realize that you know you are in a much more competitive fight than you were a few years ago in terms of products and services. So I think, you know, you’re each credit union really needs to decide how it’s going to win when all of your members are just one click away from taking a competitor’s service. And that could be a local competitor, that could be JP Morgan Chase, and you know, there are, we said at the beginning, there are still tremendous advantages from credit unions, right? You’re local, you have the member relationship. You have so many members who really prefer that idea of, you know, I want to be a credit union member. I don’t just want to be a bank customer. So I think that’s the advantage. And at least, you know, getting yourself to at least be competitive on the product and technology side is what you need. You don’t need to have better products than Chase, but you need to be at least in the ballpark so that therefore that local relationship, that’s what will win the deal and keep that customer and keep that person as a member for you.
Sarah Cooke
Well, thank you so much for your time and expertise today. Dan, appreciate it.
Sarah Cooke
Well, thank you so much for your time and expertise today. Dan, appreciate it.