Beyond the Contract: The Keys to Forging Winning Tech Partnerships

Billionaire investor Warren Buffett once remarked that a partnership is not a legal contract but “an emotional alliance between two people who are committed to each other’s success.” But when it comes to financial institutions and their technology vendors, such partnerships are rare.

Sadly, the typical relationship between a credit union and its software provider is transactional in nature, often to the detriment of both parties. While tech vendors may offer help deploying their products and troubleshooting issues, such efforts typically involve only a bare minimum of effort. As a result, credit unions often fail to see the results they hoped for from new technology, particularly when it involves the mortgage process, which is inherently complex.

In reality, the relationship between a credit union and its technology vendor is often more important than the actual technology being used. And in order to create a stronger, more beneficial relationship, both sides must be committed to teamwork, trust and accountability. The question is how.

Taking the Right Approach

From a credit union’s point of view, achieving the sort of “emotional alliance” that Buffett described requires a shift in mindset. It’s important to view tech vendors, like all business partners, not just as suppliers of products and services. Rather, they should be seen as strategic partners who ought to be committed to continued innovation and invested in the credit union’s success.

This means finding a technology partner that doesn’t think it already has the answer to what a credit union is looking for, or what the credit union thinks it needs. A sound partner will actively engage the credit union’s leadership team and department heads to understand the organization’s challenges and goals, and be able to adapt its solutions accordingly.

Last year, for example, a $5 billion credit union that primarily serves military service members was looking for a new mortgage technology platform that could be tailored to its unique needs. The credit union found a technology vendor with cloud-built technologies that was willing to customize its loan origination and point-of-sale solutions. They also were able to work closely with the vendor to go live on their new platform in less than 120 days.

Of course, any good technology provider should take the time to understand the nuances of a credit union’s unique value proposition and member base, and be able to tailor their offerings to enhance both member service and internal efficiencies. But partnerships only yield great results when they are built in the spirit of collaboration, and the technology provider is viewed as an integral part of a credit union’s journey.

Honesty Builds Trust

Trust is the cornerstone of any successful relationship, but it’s particularly important when it comes to credit unions and their technology providers. A partnership built on openness and mutual respect is crucial for navigating the complexities of financial services, which include staying compliant with federal regulations and protecting the personal data of credit union members.

Establishing trust begins with transparency. When engaging a technology partner, a credit union’s leaders should clearly articulate their challenges and goals and hold nothing back. That includes divulging vulnerabilities and areas where the credit union feels improvement is needed. When credit unions are upfront about both their strategic objectives and weaknesses, their technology partners are better able to modify their solutions and their approach in ways that drive real value.

When interest rates shot up two years ago, for instance, a large New England credit union found itself struggling with its loan origination and point-of-sale software. Both were built on outdated technology and could not be easily integrated with their other systems. By being open about these challenges, their new technology vendor was able to help the credit union centralize all its mortgage related technology, resulting in an 85% boost in productivity.

A word about confidentiality – credit unions ought to feel secure that the information they share with their technology partners won’t be shared with outside parties or competitors. A good technology partner will detail how they handle sensitive information, so the credit union’s leadership and staff can candidly express their obstacles and ambitions, without fear of compromising the “secret sauce” that makes them unique.

Mapping Out Success

Once a credit union has deployed new software, both parties need to establish a robust support model to ensure the partnership’s success. This model should go beyond providing basic troubleshooting and regular security patches. It needs to include a structured framework for continuous improvement and the achievement of shared objectives.

One of the most effective ways to do this is through quarterly business reviews (QBRs) or, at a minimum, biannual business reviews. These strategic assessments serve as critical touchpoints that foster transparency, accountability and strategic alignment between credit unions and their technology partners. A QBR is a structured process in which both parties review the progress toward previously set goals and discuss strategic adjustments, if necessary. These reviews should not simply be an administrative check-in. They are meant to continually evaluate the health of the partnership and the impact of the vendor’s technology.

Credit unions can gain a more holistic view of their partnership’s effectiveness by performing both quantitative and qualitative assessments. Quantitative assessments may include metrics such as system uptime, error rates, user adoption rates and cost savings. A qualitative assessment, on the other hand, would focus on less tangible yet equally important benchmarks, such as feedback from loan officers about the credit union’s mortgage platform or surveying members on their borrowing experience.

Together, these reviews help ensure that the technology a credit union chooses is not only effective, but also enriches the user experience and supports the credit union’s broader strategic goals. Moreover, a strong support model emphasizes proactive communication and the technology provider’s commitment to the credit union’s success.

Obviously, the biggest factor behind successful tech partnerships is selecting the right technology provider. At the end of the day, credit unions should seek out providers that are not only capable of delivering advanced, flexible technology, but are also willing to invest in a genuinely collaborative and supportive relationship. When you have that shared commitment to success that Warren Buffett spoke of, there are few things you won’t be able to accomplish together.

Joey McDuffee is Vice President, Sales & Marketing at Blue Sage Solutions, an Englewood Cliffs, N.J.-based digital lending platform provider.