Investments in Innovation Shape Credit Union Roadmaps

Watch more: Investments in Innovation, Not Macro Panic, Shape Credit Union Roadmaps

It may be tempting for many financial institutions to retreat into a defensive crouch in the face of an unstable economic and regulatory climate.

But for small lenders and credit unions, today’s changing seas could also provide opportunities.

Velera Chief Administrative Officer Brian Caldarelli told PYMNTS during a discussion for the July “What’s Next In Payments: Trade Offs” series that instead of pulling back, credit unions should double down on strategy, stay true to purpose and invest in innovation.

He didn’t sugarcoat the difficulties facing credit unions, though. Inflation, geopolitical instability, regulatory shifts and supply chain disruptions are creating constant headwinds.

“There are things like tariffs, increasing budget deficits and migration patterns,” Caldarelli said. “All of those things potentially affect the supply chain, as we’ve seen over the past five years with inflation.”

For Caldarelli and the Velera team, navigating this volatility starts with a steady internal compass.

“We’ve spent a lot of time figuring out our purpose statement, what we’re really here for,” he said. “Whenever we hit a crossroads, we go back to that. That, combined with our culture, are our goalposts.”

That purpose is more than a branding exercise. It’s an operational North Star that helps Velera filter priorities, align investments and avoid knee-jerk reactions to short-term uncertainty.

The urgency around digital transformation is no longer theoretical for credit unions. With the demographic makeup of members shifting rapidly, staying digitally competitive has become existential, Caldarelli said.

“Those new members demand digital technologies,” he said. “They demand things that, right now, are [already] in the hands of the largest banks.”

Credit unions are structurally different from commercial banks, but digital expectations don’t make that distinction.

“There’s certainly a risk generationally that [credit unions] could be left behind,” Caldarelli said. “And we’re just not going to let that happen.”

To close the gap, Velera has invested in a dedicated Emerging Services group focused on exploring new technologies and developing offerings that help credit unions leapfrog outdated systems.

“We’re not just trying to be a fast follower,” Caldarelli said. “We want to be really upfront when it comes to what’s next from the technology side.”

This proactive stance is grounded in deep listening.

“There are hundreds, if not thousands, of inputs,” he said, adding that Velera conducts extensive client surveys and advisory sessions, combing through every verbatim response to shape its offerings. “Those roll into our strategic plan and into operational budgets. That’s where you find the outcomes.”

In a sector under pressure, Velera’s message is to build, not retreat. Risk smartly. Stay bold. Ground every decision in mission. And above all, never forget who you’re building for.

It’s a playbook that has helped credit unions punch above their weight class for decades.

Credit unions may not have the deep pockets of JPMorgan Chase or Bank of America, but that doesn’t mean they can’t compete. The key is collaboration through the cooperative model, Caldarelli said.

“That’s the benefit we have,” he said. “We can drive the scale that [smaller credit unions] need to compete with JPMorgan. They can’t do that individually. The math is just not in their favor.”

But Velera can. With pooled resources, shared infrastructure and no pressure to deliver short-term shareholder returns, Velera and its clients can afford to take the long view.

“We’re not beholden to quarterly earnings,” Caldarelli said. “We have the luxury to look years out on paybacks for big digital investments. In some ways, I think it’s driven us to become the largest FinTech in the credit union space.”

The organization commits between 5% and 7% of top-line revenue back into capital investments — more than many private-sector tech firms. That reinvestment fuels the launch of new products, enhanced cybersecurity defense and member experiences.

When it comes to investment decisions, some areas are simply off-limits for compromise.

“Client experience? Non-negotiable. Fraud protection? Non-negotiable. Cybersecurity? Non-negotiable,” Caldarelli said.

These pillars guide not just Velera’s strategy, but its culture.

“When there are client issues, we all want to help solve them right away,” Caldarelli said. “And I don’t think that’ll change anytime soon.”

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