The Trust Paradox: How Outdated Tech is Undermining Credit Unions

Originally broadcast live at APIX 2025, this exclusive discussion reveals why outdated legacy systems and lack of transparency are destroying member trust.

Credit unions were built on a simple promise: to serve their communities with transparency, trust, and genuine care. Yet in 2025, many of these member-owned institutions are failing to deliver on that promise…not because they've lost their values, but because their technology is stuck in the past.

At the tenth edition of APIX, industry experts Lisa Arthur (SVP of Sensedia U.S.), Paolo Malinverno (Chief Strategy Officer at Sensedia), and Filipe Torqueto (Head of U.S. Solutions at Sensedia) tackled this critical issue head-on. Their session, "The Trust Paradox—How Outdated Tech is Undermining Credit Unions," exposed uncomfortable truths about how legacy systems are eroding the very foundation credit unions were built upon.

When Good Intentions Meet Bad Technology

Lisa Arthur's personal experience perfectly illustrates the disconnect between credit union values and their technological reality. After growing frustrated with a Big Four bank, she and her husband decided to join a well-known credit union, expecting the community-focused experience they'd heard about.

“Take my own experience. My husband and I were disenchanted with a Big Four bank and decided to open an account with a well-known credit union. But what should have been a smooth transition turned into a frustrating experience that exposed the trust breaches in the system.”

The Hidden Third-Party Trap: The credit union required a third-party privacy agreement that wasn't disclosed upfront. For members already concerned about data security, this felt like a betrayal of transparency.

Digital Dark Ages: In 2025, there was no digital way to transfer money. This isn't just inconvenient. It's embarrassing. Especially for institutions that claim to serve their members' best interests.

The Impossible Mission: Even after weeks of effort, Lisa couldn't successfully move her funds from the Big Four bank to the credit union. The process that should have been seamless became a nightmare.

The Real Problem, Exposed

While outdated technology creates obvious friction, Paolo Malinverno identified the deeper issue: communication and transparency failures. "Why didn't the credit union tell Lisa about the third party upfront? That's where the real breach begins…before any technical failure."

This insight reveals a fundamental misunderstanding many credit unions have about member expectations. In an age where consumers expect radical transparency from financial institutions, hidden dependencies and undisclosed partnerships feel like deception, even when they're not intended that way.

Filipe Torqueto expanded on this point, explaining how third-party relationships often create two distinct outcomes: they either trap credit unions in dependency cycles that harm member experience, or they empower institutions through strategic partnerships. "When a credit union owns its open banking strategy, it removes friction and owns the member experience. That means data, relationships, and trust stay where they belong, within the credit union."

Open Banking: The Path Forward

The solution isn't to abandon technology, but to embrace the right technology. Open banking offers credit unions a practical roadmap to reclaim their competitive edge while staying true to their community-focused mission.

Paolo emphasized how simple API implementations could solve critical problems like digital transfers: "With just two or three well-built APIs, members can move money effortlessly. Without this, credit unions risk losing members to more agile competitors."

Open banking delivers benefits far beyond basic functionality. When credit unions own their open banking strategy, they eliminate friction, reduce third-party dependencies, and maintain direct control over their ecosystem and member data. This technological independence allows them to focus on their mission statement: to serve their communities.

Sicredi Success Story: Proof That It Works

Theory becomes powerful when backed by real-world results. Lisa highlighted Sicredi, Brazil’s largest credit union, embraced Open Finance early and saw transformational results: 

• Stronger member loyalty through personalized experiences
• Zero member churn by addressing needs proactively
• Increased deposits through better financial products
• Expanded credit offerings tailored to member needs

Filipe noted that Sicredi's success came from focusing on underserved communities, using open banking data to offer the right products to the right people at the right time. "Open banking is how credit unions can beat the Big Four, by staying true to their community roots while adopting competitive, member-first technology."

This approach strengthens credit unions' role in their communities while building trust across generations. Instead of competing on marketing budgets or branch locations, they can compete on what matters most: improving member service.

The Hidden Danger of Screen Scraping

One of the session's most eye-opening discussions centered on screen scraping, a practice that poses enormous risks to both privacy and trust. From the member perspective, if you're not explicitly sharing data through secure channels, it's likely being scraped without your knowledge or control.

Paolo offered a vivid analogy: screen scraping is like giving someone unrestricted access to your mailbox, even when you're not home. The member has no visibility into how their data is being used, shared, or stored.

For credit unions, screen scraping often becomes a crutch due to limited resources and over-reliance on third parties. But this dependency is both costly and unsustainable. "The solution is simple," Filipe explained. "Start with aggregators if needed, but build your own APIs. Gradually phase out what doesn't work and take control of your data strategy."

The Future Outlook for Credit Unions 

The session concluded with powerful insights from each speaker about the path forward:

Paolo's Challenge: "Closed banking is a myth. If you give away your credentials, anyone can access your data. Is open banking a bad word? Let's call it safer banking, or member-first banking."

Filipe's Mission: "Don't build your entire strategy on third parties. Choose partners that empower your mission. The Big Four aren't here to serve communities—but you are."

These messages underscore a crucial truth: credit unions have a unique opportunity to differentiate themselves not despite their community focus, but because of it. By embracing modern technology while maintaining their member-first values, they can offer something the big banks simply cannot: a genuine partnership and involvement with their communities.

Community Banking, Reinvented

Open banking isn't just about APIs, compliance, or keeping up with fintech trends. It's about redefining trust, reclaiming data ownership, and leveraging the community banking model that has served members for centuries.

Credit unions have always been about more than profits, they exist to serve their communities, build relationships, and create financial opportunities based on those relationships and communities. But to continue this mission, they need to embrace modern technology thoughtfully and strategically, otherwise they risk becoming obsolete.

The trust paradox has a solution. The question isn't whether credit unions can compete with big banks, but whether they'll choose to leverage their unique advantages with the technology their members deserve.

Watch the full APIX Experience Talks discussion on Sensedia's YouTube channel. Subscribe now for exclusive insights from APIX 2025 and discover how open banking is transforming financial services.

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