"Isn't there an algorithm that can do that?" Defending the need for additional compliance staff is a skill at which most credit union compliance managers have become particularly adept. "No, we can't completely outsource it. No, we can't completely automate it." A new breed of fintech, dubbed "regtech," aims to make those defenses less true.

Regtech is being heralded as the next big opportunity for financial institutions to leverage technology, this time against compliance burdens. The Institute of International Finance defines regtech as "the use of new technologies to solve regulatory and compliance requirements more effectively and efficiently" with the goal of making compliance less complex, thus freeing up capital to put to more productive uses. Regtech distinguishes itself from current solutions because of its marriage of new technology, advanced analytics and real time capabilities, plus cutting edge algorithms and models.

Among the potential opportunities for regtech solutions, those geared toward identity verification, AML, fraud and enterprise risk management have strong use cases for credit unions.