How Does QCash Partner with Fintechs?

In the world of financial technology, it’s important to know that companies can form partnerships to better serve their clients. So how does QCash partner with other fintech companies?

Imagine a world where fintech companies received report cards. Not just the usual A, B-, C+, or D nonsense, but a report card with healthy evaluative comments on it. Both in preschools and in elite academic institutions, we know such methods of evaluation are still alive and well. While it’s certainly easy to take comfort in the knowledge that it’s possible to receive a passing grade by keeping your nose down, working hard, and offering consistent, dependable work, there’s always that last area: group projects. Group projects demonstrate the ability to communicate effectively, manage shared goals, and build something larger and more comprehensive, in a shorter timeline, than would be feasible by a lone wolf.

Most people don’t like group projects in school because students are notorious for bringing different levels of energy and care to a job. Fortunately, the professional level at which we operate is replete with dedicated professionals with skin in the game. We at QCash believe that the ability to work closely—and partner—with others in the financial industry is paramount to providing seamless, integrated solutions to credit unions members nationwide. We’re certain that, were we to receive a written grade, it would say that we have a strong ability to facilitate effective, mutually beneficial group work (or, in preschool terms, that QCash “plays well with others”).

What Do Fintech Partnerships Accomplish?

We understand that other fintech Credit Union Service Organizations (CUSOs) can partner for various reasons. We see synergies in the solutions that different companies provide. In areas where companies dovetail, the may be able to work together to offer a new service that would have taken too many resources to do in-house.

For example, we look to provide small-dollar and payday lending that benefits both credit unions and their members. This requires that we minimize the amount of overhead required to evaluate and approve loans. We’ve talked with several alternate data providers about how to tweak operations for underwriting loans, which will allow us to better service new members and streamline the loan process. We’ve found that working with other fintech companies allows us to identify new ways we can serve our clients.

Ideally, strong partnerships among fintech CUSOs result in complementary products and services: one picks up where the other leaves off. QCash is poised to utilize the work of many other fintechs and, in return, make their products more actionable.

Examples of Working Partnerships

 We’ve already mentioned our relationship with data companies and how they help us better underwrite small-dollar loans, but our partnerships don’t end there. We also talk with international financial companies—with Canadian fintechs, for example—to see how we can expand our service. Another organization we’ve worked with is OnApproach. By connecting with their data lake, and through leveraging their newly released app store, we’ve looked into creating a QCash app that’s accessible to their clients.

We appreciate working with other fintech companies because, although we know we provide a good service on our own, we know that we can often build something stronger together. Through mutually-beneficial, complementary capabilities, we can provide solutions that do more and reach further. An A+ isn’t enough. We also want “plays well with others.” It’s better for everyone.

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What is a Digital Lending Platform?

When I tell people that QCash is a digital lending platform, they often ask what I mean by that. Here are a few highlights:

In short, a digital lending platform like QCash leverages social, mobile, data analytics and the cloud to create a lending process that’s efficient for the financial institution and easy for the borrower.

When we first started developing the QCash small dollar lending platform, there was a lot of paper involved. We knew we had to do better because all around us, mobile was exploding and so-called fintech companies were focusing on new ways to harness data analytics and the cloud.

These fintechs were focused on tapping into social capabilities. We looked at that and said, “That’s something we need to emulate. We need to bring that into our product if we’re going to make it affordable, scalable and be able to adapt and evolve in a way driven by the future needs of our members.” Because of this, we chose to prioritize the cloud and mobile financial technology.

For the first few years, this product lost money. Not very many of our members at WSECU used it. It was too much of a hassle in its earlier iterations. There were two primary causes of this:

1. A lot of people were involved. This overloaded the process and made us realize we needed a more automated system.
2. It was a long process that required quite a bit of back and forth between the member and our staff.

Because of this long process, we began to evolve the platform to be much more streamlined. We did this through the establishment of Digital Lending Platformfurther automated underwriting processes. This, in turn, cut out the need for so much employee involvement.

Essentially, that’s how I characterize a digital lending platform. Its focuses are social, mobile analytics and the cloud. When you get all of these working in concert, you can create a system that truly benefits both the credit union and its members.

May 3, 2018
by Ben Morales, QCash CEO

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The Importance of Promoting Small-Dollar Lending and Employee Wellness.

By Ben Morales, CEO of QCash Financial

In a recent Prudential survey regarding consumers’ perspectives on financial wellness, only 22 percent of individuals in the United States described themselves as feeling financially secure. Employers such as credit unions have a stake in this because the impact of employee financial instability does not stop at the company door. Many credit unions were and continue to be founded to serve groups of people who had a common interest or bond, such as an employer. These were called select employer groups (SEGS). Promoting employees’ and SEGs’ financial wellness should be an important business objective for credit unions, since it has a negative impact on employee productivity in the short-term, and eventually employees’ retirement preparedness. Employees without sufficient financial stability often turn to expensive payday loans to manage their cash flow issues, which eventually creates a cycle of debt that adversely impacts their productivity, morale and financial wellness.

Benefits to credit unions as employers

Many credit unions and employers in general are unaware of the potential benefits of promoting employees’ financial wellness. According to Prudential, studies have shown that better financial wellness equates to increased productivity in the workplace. Roughly 44 percent of employees worry about finances at work, and 46 percent spend between two and three hours a week on personal financial matters; see “Power of the Wellness Effect” . Financial instability also impacts employees’ potential for retirement.  In 2012, employees withdrew $70 billion in from retirement accounts before reaching retirement age. This equates to 59 percent of employers’ matching dollars contributed to those accounts that same year; “Power of the Wellness Effect“. Even a one-year increase in retirement age costs employers about as much as sick and personal leave days combined. When credit unions promote employees’ short-term financial stability, it translates to cost savings when employees get closer to retirement.

What can credit unions do?

As providers of employee benefits, credit unions are viewed by their employees as trusted partners who can help employees achieve financial wellness.  Traditional workplace benefits programs are expanding to include new, complementary financial wellness approaches.  These programs focus on foundational financial issues, such as budgeting, debt management, saving and investing, and protecting against key financial risks. Credit unions may be familiar with offering SEGs paycheck advance programs, but many organizations are unable to support them. Alliances with trusted partners to offer employee small-dollar lending programs that provide an alternative to traditional payday lending can fill this need. According to PEW Charitable Trusts, more than 12 million Americans turn to payday loans annually, demonstrating a strong need for better solutions to these expensive products.  Employees with access to instant liquidity solutions, such as inexpensive small-dollar loan products are often able to budget and manage debt more effectively.

 

Defining these goals

In order to reach financial wellness, consumers must first be in control of their day-to-day financial needs. This often involves creating monthly and annual budgets based on income and expenses, then limiting their expenditures to remain within the budget. Controlling day-to-day needs also means consumers are financially prepared to cover an unexpected expense on short notice. Many times, a one-time unexpected expense of even a few hundred dollars can completely derail this financial stability, causing consumers to turn to payday lenders for their financial needs. Achieving important financial goals of saving or making the move from renting to owning a home can often get sidetracked by these unexpected expenses, which can be compounded by the cost of payday loans. This frequently causes the next unexpected expense to have an even more profound impact. The final element of financial wellness is protecting against key financial risks, such as an economic downturn, the loss of a job or a serious illness, which is extremely difficult when consumers are living hand-to-mouth.

Short-term stability is an important element of an employees’ overall financial wellness. Employees with access to small-dollar lending solutions through their trusted credit unions have better opportunities to manage their short-term financial goals, which enables them to achieve long-term financial goals. As financially stable individuals, employees are better equipped to focus on work and can retire on time. Small-dollar lending is an important part of this equation and can have a profound impact on employees’ financial health.

 

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Ben Morales is the CEO of QCash Financial. QCash Financial is a CUSO providing automated, cloud-based, omni-channel small-dollar lending technology that enables financial institutions to provide short-term loans quickly to the people they serve. QCash Financial, a wholly owned subsidiary of WSECU in Olympia, Wash., started as a short-term loan solution for the credit union’s members in 2004.

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