The old playbook won’t cut it anymore. Credit unions that once relied on steady membership and local loyalty now find themselves in a high-speed chase with fintechs and digital-first banks. On this episode of The Credit Union Connection, host Sarah Snell Cooke sits down with Pierre Cardenas of Capitol Credit Union and Philip Paul of Cotribute to talk about what it really takes to keep pace and why standing still isn’t an option.
“It doesn’t matter that credit unions are smaller anymore, they’re struggling to compete with the Chimes, the Daves, the PayPals of the world.” Sarah doesn’t mince words, and neither do her guests. From costly member acquisition to the lure of slick fintech experiences, the conversation goes straight at the biggest obstacles facing credit unions today and the surprising ways some are fighting back.
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Pierre leans into the David vs. Goliath metaphor with gusto. For him, branches used to be the slingshot, but in today’s market the real weapon is digital access that works flawlessly every time. Convenience isn’t about how close your nearest branch is, it’s about opening an account on your phone at midnight and having it feel effortless.
Philip makes it clear that technology alone won’t save anyone. Growth is a mindset, he argues, and the credit unions willing to think big, even when they’re small, are the ones outpacing the rest. He points out that when strategy and tools actually click, digital channels don’t just compete with branches, they surpass them.
And then there’s the heart of the story. Pierre describes how the same digital workflows that attract new members also make it possible to serve foster kids opening their very first accounts. It’s a reminder that innovation isn’t just about catching up to fintech giants, it’s about making the credit union difference matter in new ways.
By the end, the conversation feels less like a warning and more like a rallying cry. Credit unions don’t need to become Goliath to win, they just need the right stones, the right aim, and the courage to step onto the field.
NOTE: The following transcript was created by our robot overlords. It could have a boo-boo here and there.
Sarah Cooke
Welcome everybody. I am Sarah Snell cook your host here at the credit union connection. I am here today with two wonderful gentlemen who I will introduce. We have Pierre from Capitol Credit Union. And we also have Philip from CEO, excuse me, from Cotribute. Uh, CEO, contribute Cotribute. Thank you. Okay, so I’ll just take a second and let you all go. You know, do a little deeper dive on your introductions of yourself and your organizations. Pierre, why don’t you get it kicked off?
Pierre Cardenas
Sure, been here at Capitol Credit Union for about 10 years. We’re in the Austin market, highly competitive, and we are looking to grow and have market share in being a part of the continued growth in the Austin market, so very challenging.
Sarah Cooke
Yeah, definitely, up and coming city. Excuse me and Philip, why don’t you go ahead and do your intros.
Philip Paul
Sarah, I get the privilege of leading code tribute, and our goal with code tribute is to power the fastest growing financial institutions. It’s as simple as that. So we do that through software technology. We have a cloud, first digital account origination platform that’s integrated with all the legacy systems. And then we also have some agentic AI that we use. But that’s our goal, is to really power the fastest growing financial institutions.
Sarah Cooke
Excellent, excellent. So I’m going to start off with you, Philip, it, you know, it doesn’t matter anymore that Koreans are smaller. You know, they have to be able to compete with the PayPals and the chimes of the world. So, I mean, shoot, am I just going to cut right there? It doesn’t matter that credits are smaller anymore. They’re struggling to compete with the chimes, the Daves, the PayPals of the world. So first, why is it so important for credit unions to get their technology in general, but also just especially account opening up to speed?
Philip Paul
You know, Sarah, you hit the nail on the head. Really Digital First, banks have completely rewritten the rules, right? And traditional financial institutions are under attack. You know, you look at some of the stats, you know, traditional financial institutions spend anywhere from $400 to $700 to acquire a member. And the lifetime value might be, you know, 3000 to $5,000 but ABA had an interesting stat. 74% of them are ready to leave the bank at any time, leave the credit union at any time. So you can imagine that, right? You’ve spent so much time acquiring them, and they’re ready to leave. And so that’s the big issue that traditional financial institutions, credit unions in particular, have, is, how do I reduce the cost of member acquisition? How do I retain them and keep them engaged? And so that’s why I think part of it is making it seamless, frictionless, you’ve got to be able to compete with the experiences that SoFi and money, Lion and chime provide. So I think that’s why we think it’s really, really important to have the same experience that those guys provide. You look at chime, they’ve grown to 7 million members in such a short time, you have to be able to compete. And that’s why we think it’s an important piece of that whole experience.
Sarah Cooke
Yeah, absolutely, I totally agree. And now Pierre you, you’ve decided on code tribute for your account opening so But why was that strategically important for you to upgrade your digital account opening, specifically your credit union?
Pierre Cardenas
Great question, Sarah, you know, here in in Austin market, we’re about a $220 million credit union, and we only have three branches. And consequently, this city continues to grow. People are moving into Austin, you know, where they say 120 families a day, or some crazy number like that, right? We’ll never going to be conveniently located for anyone at this point. And you’ve got a lot of large players in the Austin market. Everybody all over the country is moving. And you have branches all over the place. We don’t have the pockets for that. Sarah, so we have to be really strategic in saying, how do we capture market share without a branch structure. The only way to do that is to find best of breed in making it a seamless process. FinTech type of solution to open up new membership through digital channels, absolutely critical. Even if we wanted to do branches, we couldn’t, so we had to go out into the market. And believe me, we had one of the top systems, I’m not going to name them, that we’ve had for the past seven, eight years, and it was not doing the trick. Our branches, with only three, were consistently opening more membership than our online channel, which, which, to me, was very scary, because the only way we’re going to be able to advance and grow is when our online channel exceeds even if I had 20 branches, I still want to see our online channel getting new membership, new customer base, as the primary means of growth. Now I say that because Philip just mentioned SoFi and chime and so forth. The whole next generation of banking consumers are going online, right? It’s not that branch. I always say that convenience is no longer a branch. Nearby. Convenience is access to your accounts when you want them, right? That’s convenient. And the next generation of consumers figure that out, and the fintechs are absolutely just dominating that next generation. If we’re not careful, Sarah, our current clientele base is going to die off, and there’s going to be nothing to replace it. So this is, to me, really critical, especially for the crediting industry to be able to provide that level of seamless FinTech type of solution in a digital channel, especially for new membership to be able to join.
Sarah Cooke
Mm, hmm, 100% agree with that. Especially, I would think in the Austin area has got to be a lot more techie than many, for sure. And so Pierre, how did you decide? I guess you kind of already answered my next question, though, if maybe you can expand a little bit more on, is, how did you decide between branches versus digital account opening career?
Pierre Cardenas
Obviously, the industry is giving us trends on what’s happening. And I wasn’t only looking at my current membership base, sir, because you know, the worst thing we can do is survey our current members. They already love us. So you’re going to fool yourself and lure you into believing a lie, because they’re saying, Oh, you guys are great. You guys are great, yeah, but you’ve been with me 20 years. Of course, it’s everybody who’s not doing business with me that’s choosing other financial institutions. Those are the ones that I want them to see me as being great, and because I’m never going to put branches, they’re not going to see my presence, I need to deliver a really cool experience through an online channel. That’s what I was looking for. I was looking for FinTech, seamless, sort of Sofi, kind of make it simple. Don’t make this complicated. And the big piece so for every financial institution is the amount of fraud that’s taking place through online channels. It’s a double edged sword. I want to make it simple, but we’ve got so many fraudsters that I complicate it. And so the people that are real, 98 99% of the people that really want to open an account, it’s actually higher than that. They get penalized because of all of the handful of fraudsters. So we need it. We need to sift through that and identify a solution that’s going to cover both bases. And that’s what I was looking for. The other piece that I think is incredibly important. Remember, I said I’m a $220 million credit seminar is my mainframe, my host system. I need something that interfaces into that, but I need to be able to afford it. Sarah, I’m not a billion dollar guy. I can’t pay crazy money, so I need a FinTech with that level of technology that’s not gonna, you know, empty my pockets out. And so you’re asking for the world, right? Every finance institutions look at what I’m looking for. Yeah, boom. We found it with code tribute. So, you know, immediately we began to see, uh. Uh, lift in our online channel. We hadn’t seen it before, but once we deployed and we set up the systems, these guys have done a great job. Man, immediately my online channel and new membership grew exceeded my branch, branches, I mean, within the first couple of months, and since then, it’s continued to dominate and allowed me to grow at levels that I never thought possible without a branch structure. Even today, Sarah, the strategy for many of the regional and national and even local are putting more branches out. That’s how they’re putting branches in new markets. And if I could, I would too, but I can’t, right? So what’s the next best option? And right now, we’re growing at better than our peers here locally in the market, so we’re doing a really good job, and it didn’t start until we partnered with contribute and saw the enhancements that could be made.
Sarah Cooke
Yeah, that really emphasizes that small credit, smaller cranes, are still relevant. You just got to make it, make, make the decisions that you got to make to remain relevant.
Pierre Cardenas
Sarah, I tell everybody, we’re David, right? I’d rather be David than Goliath, yeah, I just need five smooth stones. Sarah, five smooth stones, and contribute is one of them.
Sarah Cooke
Cool, great analogy. Yeah. Um, so Philip, are you seeing this trend among credit unions across the board, where you’re, you’re the excuse me that you’re working with?
Philip Paul
Sarah, it’s so interesting. If you look at, you know what Pierre said, there are a lot of things to unpack there, but, the first thing is about his strategy, and about, you know, what they did to actually accomplish their strategy? So we see this across the board. But the key component, I think, is almost a growth mentality. So it doesn’t matter how big the credit union is, whether it’s small or whether it’s large, if you have a focus on growth, then we can actually help you. And that’s what, you know, you look at pure you know, the strategy is geared towards growth. The technology choices are geared towards growth. You know, the personnel in all their, you know, tactics are all geared towards growth. And I think that’s the key thing. We could be an enabler. But that’s what’s, you know, needed. And we see that, you know, across the board, regardless of the size.
Sarah Cooke
It’s not the tools, it’s the strategy, and then you bring the tools in to accomplish that. And so I was going to ask you to Pierre, how did you decide to go with code tribute? What were your like? Couple of points that really made them stand out for you?
Pierre Cardenas
Well, you know, obviously the system that we had that was very popular, and credit unions across the country had this one wasn’t cutting the mustard, and so I looked at some other solutions, but they were outside of my price range. I had to find something that was going to work. They would build an interface into our host system and be seamless in the process, make it easier for my employees. I don’t want to spend the kind of time we’re spending trying to shuffle through these applications. But to Philip’s point, which I think is really critical, checking accounts are key for any financial institution. You know, it comes with the relationship. And I guess we really shouldn’t call them checking accounts. They’re transaction accounts. That’s why Venmo is so popular with the next generation. You know, Venmo Robinhood, they’re all offering checking accounts now to their customer base, which already has the next generation. And they’re not only checking accounts, but debit cards are being sent. They don’t even need us anymore. They can bypass a traditional finance institution. I got to give them a reason to come with me. So that means that I needed to find a solution that was going to give that very simple process for someone to open an account with us, be able to mitigate the fraud and not bog down my employees. And that’s what I was looking for. Then the interface into our host system absolutely critical, and I can’t the worst thing I can do Sarah is grow and have to hire people at the rate of my growth, and I’m I’m defeating the purpose. Scalability and efficiency are absolutely critical. So what systems are going to make me scalable and efficient as I grow? And those are key points in identifying a solution in the market that’s going to help me compete in the market environment, especially I think that Austin is probably one of the most competitive markets in the nation.
Sarah Cooke
I bet Philip, do you have anything you want to add to that, as far as like, maybe feature functions, a couple top ones that might be different from what others are offering, as well as how it fits into their strategy.
Philip Paul
Yeah, I think a couple of things that, you know, Pierre touched on, Sarah. One is, it’s product innovation, right? Product Innovation on the financial products. You know, a checking account is not the same as other checking accounts. And I think, you know, they’ve done a lot of innovation there. The second thing that he touched on, you know, we talk a lot about. Active member experience, the prospective member experience. And that’s key, you know, being able to support a ton of different products. You know, start on mobile, finish at a branch, or start at the branch, finish on desktop, you know, whatever it is, all of that. But then the ability for you to be able to make changes to the flows based on the product, I think that’s key. So I think one of the key areas where pure cmav really innovated is different kinds of flows based on different products. So the ability to do almost no code or low code configuration is important. But also have the ability to have a developer portal where you could customize it to your hard consent, that’s also important. So you look at the member experience. And how can you make it simple? The second piece that Pierre touched on was the employee experience, right? You know, if you have a large volume coming in through digital you want to be able to provide the tools to your employees, encouraging your employees where, you know, 85% of it is taking care of the system, right, and it’s putting it into an approved bucket, or, or, you know, deny bucket with the appropriated was actions or a review bucket, but you want to give them tools. I think that’s the key thing in Pierce cases, you know, they’ve reduced by 70% the amount of time that’s required by employees to be able to do things in the back end, right on the other side, you look at the growth that they have, you know, they’ve the Digital’s become the number one channel within the first 90 days. So you look at the growth, and then you also look at the effort that you know, the employees you know don’t have to do, then that’s a winning combination. That’s why, you know, we’re so excited about Pierre and his team and what they’re doing. It’s because of that combination growth and operational efficiency, right?
Pierre Cardenas
So, so critical. And just on that point, to give some of the listeners an idea of what that looks like. From the product side, as Philip was saying, we probably have one of the best checking accounts in the state, from my view, 6% checking up to 15,004% on a savings account up to 100,000 buy now, pay later tied into the debit card, and then, of course, the fractional, self directed investing that’s actually within the app and all tied into one, obviously, with the credit scoring, free credit scoring. I mean, it’s sweet package right now. Think about this, Sarah, how difficult would it be to have such a wonderful product and unable to deliver it through these digital channels. That’s the problem. That’s a problem that we had. We knew we had a good product and we had worked hard on it, but we couldn’t deliver it through the digital channels because they were too clunky. And once we found a solution through co tribute man, the consumers are just eating this up because it is a very good problem. We’ve worked on it for years, but without the right technology, I don’t care how good it is, and they’re not going to be able to access it. So now, word of mouth and the marketing that we’re doing, and they’re finding it and, man, it’s just opening they’re saying, I never knew this. Give me give you an example. The way they set up their program is their workflows for every type of account. So we go from these really high income kind of 4% on saving 6% to checking all the way down to foster kids that are under the foster program and open an account at the credit union to teach them about financial institutions. Each of these are set up on separate workflows. Contribute is able to set up a workflow so that we can go way up here, or we can get foster kids in the in foster care and set up a workflow for them to be able to open an account with us, with all the protections associated with it, and our process internally is seamless. So think about the, you know, the breadth of difference between what I’m talking about and these foster kids that are 1415, and 16 years old. They can quickly open an account and we can vet them out through the same workflow, and it doesn’t matter whether they go online or they walk into a branch, it’s the same process. Man, it’s brilliant.
Sarah Cooke
And you’re making a members for life because, I mean, first of all, helping out. I already thought about that. Foster kids. You don’t have parents to co sign or anything like that.
Pierre Cardenas
Exactly. Sarah, so you can imagine how complicated to open those but by setting up in the workflows that code tribute has developed. Man, it made what would normally be a very complicated process for our employees to try to figure this out. And now they it streamlines them and walks them through the process, and we have all these checks and balances to make sure everything’s set up and part of the process, I mean, phenomenal.
Sarah Cooke
It’s all the pieces that have to come together. Can you talk you touched on some of the data, as far as the results, more memberships coming in through the digital account opening versus the branches. But can you put any other numbers to some of the successful results you’ve had?
Pierre Cardenas
Well liquid deposits are up. New membership is up. 60 to 70% of our new members are now coming through online channels. That was never the case always. So the numbers are pretty phenomenal at this point. And so we’re growing at at paces that we have not been before. But part of our strategy is, Philip was saying we want to double our size in the next five years, so we we’ve got a really strong growth strategy in place, and we found that it’s just not the products and not just the process, but the technology all have to fit nicely in order for us to have some of the success that we’re seeing at this point. So yeah, all critical steps, but right now we’re looking at some of the some of our peers in the local market, and they’re actually losing market share and losing membership and losing deposits while we’re in the middle of this growing so something is moving in the right direction, and it’s all the pieces working together as as a strategic, focused initiative for growth.
Sarah Cooke
Yeah, yeah, for sure. And Philip, are you seeing, like, what are some of the results your clients are seeing? Can you aggregate or provide samples, something like that?
Philip Paul
You know, it’s hard to aggregate, just because, you know, some are really large clients there, and some are smaller, but I think on the average, they’re all outperforming the average. If you look at credit union growth on the average, they say it’s about 2.3 and some are actually losing market share. But, you know, ours are typically north of 5% and this is, you know, just organic growth, right, not through mergers or acquisitions. So, and that’s, that’s, that’s what we’ve seen.
Pierre Cardenas
Yeah, such a good point. Philip, I think it’s important, Sarah, to know that we don’t do indirect the way most credits do. Everything we’re doing is organic. So the growth that you’re seeing is not just these people financing a car through a dealership. We don’t play that and everything organic. So that makes our numbers even more impressive, to be honest with you, because many times, many credit unions see their growth coming 30, 40% from the indirect market
Sarah Cooke
That’s a danger, honestly. I mean, it seems like a decent tool for certain things, as far as indirect but it’s also a dangerous game to play too. So anyway, we’re, as we’re finding out the current economy. But I’m going to wrap this up here, gentlemen, I always offer my guests the final thoughts to share with the our credit union audience. I’m going to start with you, Philip, you give your final thoughts, then we’ll go to Pierre.
Philip Paul
You know, it’s interesting. Sarah, on the one hand, you know, there’s a lot of questions about, you know, how if credit unions going to compete in this space. But in the other hand, I feel, you know, the opportunity couldn’t be greater, right? Because, you know, you have credit unions who use the right technology, you know, they could just compete really, really well with the digital first banks, because they also have the trust component that a lot of the digital first banks, you know, may not have yet, right? So that’s why I look at even, you know, somebody like pure they’re going after the younger population, and they’re hitting it out of the park because they’ve got the right products, the right messaging, the right way to engage with them, you know, with convenience and all of that is great. The other thing is, you know, you hear so much about AI, and it’s such an overused expression, but I think, you know, we’re pretty excited, you know, Pierre, you know our team, you know we’re actually working on it right now and implementing it for them, but there’s some really good opportunities to use AI appropriately on the acquisition side, on the member acquisition side, Cornerstone just did an amazing report Ron Shevlin did about how you could take your existing products, but How do you find the new segments, the new markets for your existing products? Right? So that’s one where we think, you know, our AI agents, can, you know, help, you know, very, very well. So we’re super excited about what purest team is doing with that, and we’re all in, and we want to see how they could hit that, you know, doubling their growth goal in a much shorter time frame. We’re committed to that.
Sarah Cooke
Yeah. Nice. And for you, close us out. Sorry. Oh say, close us out.
Pierre Cardenas
Well, Sarah, I was mentioning it to people when I talk about the financial industry. I’ve been in this game for many years, longer than I’d care to admit, and it’s never been as competitive and as difficult as it is today, there are players in this space that never existed before. Sarah and us looking backwards at how we did things is the worst thing we can do, especially as a credit if credit unions, which I believe they are highly focused on looking after the best interest of the consumer, which is what they do the consumers to haven’t figured that out, because we continue to see the industry shrinking, even the larger ones are having trouble growing, right? That’s why you see so many mergers. We’re down to 4500 credit unions, if I’m not. Stake in I remember there were 9000 of them. Yeah. So there’s got to be a change. We’ve got to be able to compete regardless of our size. To be honest with you. I think the smaller you are, the faster you can move, little more agile you find best of breed. Some of these leaders that are the market partner up with them and allow them to bring their knowledge, their technology, their expertise, into your organization, and use that as a springboard to get to the next level. But economies of scale is key. You got to grow or you’re going to die. You cannot afford to compete without growth. You got to have economies of scale. Revenue streams have to be built off that growth, and if you’re not in that place, and many financial institutions are just treading water, you know, they’re keeping their capital position up, but they’re not growing. They’re actually shrinking membership. But their numbers look good, and so they get a pat on the head by the board saying, Hey, look at you. Look at your numbers. Yeah, but everything else is terrible. You got technology is 10 years old, and you haven’t spent any money on it because you kept your expenses down. That’s not going to help the industry. So, man, there’s got to be some changes.
Sarah Cooke
Yeah, totally, totally agree with that one. Well, thank you, gentlemen, so much for your time today. I appreciate it, and have a great rest of your days.