Beyond Capital: A New Alliance to Reshape CU-Fintech Innovation

SACRAMENTO, CA – January 08, 2026 – In a strategic move poised to reshape the landscape of cooperative banking, One Washington Financial (OWF) and Papilio Collective today announced a first-of-its-kind partnership. The alliance aims to move beyond traditional venture capital by embedding deep, operational expertise into early-stage financial technology companies, seeking to bridge the persistent gap between credit unions and the fintech innovators they increasingly need.

This new initiative, led by OWF, a subsidiary of WSECU, and human-centered consultancy Papilio Collective, will not only provide funding but also deliver a suite of fractional services. By offering startups access to seasoned experts in finance, marketing, product development, and member experience, the partnership intends to accelerate the delivery of cutting-edge solutions to credit union members.

"Our mission is to enhance the lives of credit union members by investing in innovative solutions that move cooperative banking forward," said Scott Daukas, principal at OWF, in the official announcement. "Partnering with Papilio Collective allows us to expand support for fintechs beyond funding...With these additional services, we can accelerate the pace of new offerings to credit unions, bringing more meaningful value to members and the cooperatives themselves."

Bridging a Persistent Divide

The collaboration arrives at a critical juncture for the financial industry. For years, a chasm has existed between the worlds of agile fintech startups and member-owned credit unions. Despite a shared interest in serving consumers, their operational realities have often been at odds. Credit unions, navigating a complex web of regulations and often reliant on legacy technology, can be slow to adopt new systems. Their risk-averse nature, while essential for protecting member assets, can create a challenging environment for unproven technologies.

Conversely, fintech startups, built for speed and disruption, frequently struggle to understand and navigate the unique compliance, security, and cultural demands of the credit union market. This misalignment has historically slowed the adoption of innovation, leaving many credit unions playing catch-up to the digital experiences offered by large banks and neobanks.

The OWF-Papilio partnership is designed to act as a specialized bridge across this divide. By curating promising fintechs and wrapping them in a layer of targeted support, the alliance aims to de-risk the innovation process for credit unions and provide startups with a clear, guided path to market.

A New Blueprint for Incubation: Beyond Capital

At the heart of this new model is the concept of "fractional services." While venture capital and accelerator programs traditionally offer mentorship and networking, this alliance goes a step further by embedding part-time, C-suite-level talent directly into the startups it supports. This addresses a critical pain point for early-stage companies: the need for specialized expertise that they cannot yet afford to hire full-time.

Early-stage fintechs often face a gauntlet of non-financial challenges. These include navigating complex regulatory requirements, building a scalable and secure tech infrastructure, developing a coherent go-to-market strategy, and designing a user experience that can win the trust of financial consumers. A lack of expertise in any of these areas can be fatal, regardless of how much initial funding a company has raised.

The fractional services provided by Papilio Collective are tailored to solve these exact problems. Startups will gain access to experienced advisors who can help refine pricing models, craft effective marketing campaigns, steer product roadmaps, and ensure the member experience is central to their design. This hands-on approach is intended to reduce common startup failures and dramatically shorten the time it takes to bring a viable, credit-union-ready product to market.

Human-Centered Tech Meets Cooperative Finance

Driving the execution of this model is Papilio Collective, a consultancy that blends data science with a deep focus on human behavior. The firm's unique value proposition lies in its proprietary technology, which combines AI and data analytics with human insight to develop what it calls a "sharper member understanding through an emotional lens."

This methodology ensures that the strategic guidance provided to fintechs is not based on abstract market trends but on a data-driven foundation of what credit union members actually need and want. By understanding the emotional drivers behind financial decisions, the partnership aims to help fintechs build products that are not just technologically advanced but also genuinely empathetic and useful.

"Our shared goal is to help fintechs succeed by offering expert guidance and fostering a member-first approach to solving problems," explained Tarrah Palomino, founder and CEO of Papilio Collective. "Financial services are at a crossroads. Partnerships between fintechs and credit unions are key to opening a new chapter in banking—one that engages and empowers the next generation of members."

The Future of Member-Centric Innovation

While models like fintech accelerators and corporate venture arms exist across the financial sector, the OWF-Papilio alliance distinguishes itself through its deep operational integration. Unlike a typical 12-week accelerator program or a simple capital check, this partnership represents a commitment to sustained, hands-on support designed to build resilient companies specifically for the cooperative finance ecosystem.

Ultimately, the success of this initiative will be measured by its impact on the end-user: the credit union member. By fostering a more robust and responsive innovation pipeline, the alliance hopes to equip credit unions with the tools they need to compete effectively in a digital-first world. This could manifest as more intuitive mobile banking apps, more equitable access to affordable loan products, and more personalized financial wellness tools.

For an industry built on the principle of people helping people, this partnership represents a significant evolution. It is a calculated bet that the best way to secure the future of cooperative banking is not just to fund innovation, but to actively nurture it with the expertise, data, and member-centric focus required to make it succeed.