The Solution Centre hosts two Webinars showcasing Digital solutions to improve member engagement – don’t miss the next one on 30th June at 3pm read more here
The Solution Centre is pleased to invite you to a webinar that will focus on the digital shared services and platforms we have developed and how they can help your credit union grow lending, reduce costs and better engage with Members. You will also see how they are being used with great success by some of your fellow credit unions.
The webinar will take place on Tuesday 30th June from 3 pm to 4 pm. If you would like to attend please complete the short registration form below. Registration is open to everyone so please do feel free to share this link with any colleagues who may be interested.
The webinar will cover;
Hive Platform – a bespoke Member engagement platform built collaboratively by a group of credit unions to manage digital marketing and Member communication more effectively. To date it has helped originate €120 million in lending while reducing IT costs.
Digital Marketing Shared Services – cost effective shared services available to improve the performance of digital marketing.
Digital Processes – How to improve Member experience with online loan application and member onboarding processes that integrate seamlessly from digital marketing to the Hive platform.
FinTech Enablers – The FinTech plug-ins that integrate throughout the Member’s digital journey to give them an exceptional online experience that makes it really easy for them to do business with your credit union, while improving credit union performance.
We do hope you can make the webinar, but if you are not available please do contact us at firstname.lastname@example.org to discuss digital solutions at any time.
On 15th June 2020, a proposed merger between St Anthony’s & Claddagh Credit Union & St Jarlath’s Credit Union was announced. Combining the resources of the two successful credit unions will create one of Ireland’s most significant credit unions, which will be hugely beneficial for members, local communities and Galway in general. The two credit unions have successfully collaborated on a number of initiatives over the past number of years, and have also been to the forefront of many major projects which have benefited them and indeed other credit unions throughout the country. In particular these have included digital-marketing and member engagement roll-outs. The two credit unions are strong both financially and reputationally, and with the advances they have made in digitising their services, they have significantly improved member experiences by making it easier for people to do business with their credit union.
CUDA, particularly through its collaborate digital development hub, the Solution Centre, is hugely impressed with the innovation and sector leadership shown by St Anthony’s & Claddagh and St Jarlath’s Credit Unions over the last few years and wish them well with this initiative.
Credit unions are here to support the Irish people in these unprecedented times – that is the message from Ireland’s most trusted financial services brand. Ireland’s Credit Unions have in excess of 3 million members, and are the sole provider of credit for many of these members and account for approximately 34% of the consumer lending market.
CUDA, and our Member Credit Unions, are following the COVID-19 developments very closely. We continue to monitor the latest advice from the Government and from the HSE, and want you to know that we have plans in place to ensure members continue to be able to access the services they need.
Survey – 3 out of 4 (77%) Consumers believe Credit Unions should compete more aggressively with Banks
- Some credit unions poised to double or triple loan book size as a result of rule changes to longer-term loans
- Credit unions disappointed at limited permission to become a key business loan provider and to support Government Housing Schemes
CUDA believes that the new rules which aligns the volume of loans a credit union can issue to their asset size is fundamental, and could enable many credit unions to double or treble their lending in certain loan classes.
Credit unions can and should ‘take on the banks’, according to more than 70% of Irish adults in a recent survey, commissioned by CUDA and conducted by iReach. The majority (74%) of adults believe that credit unions could make a bigger impact and should collaborate to compete with the banks.
Kevin Johnson, CEO of the Credit Union Development Association (CUDA), commenting on the new rules issued by the Central Bank of Ireland today, said “Up until now the level of loans the credit union should give out was based on the percentage of loans already issued. This was holding credit unions back from providing more loans to support their members and their communities. Now the volume of loans will be based on a percentage of assets of the credit union. With an average of just 28% of assets currently lent out, the Regulations will allow many credit unions to do more loans for more people.
CUDA has persistently lobbied for these changes since 2015 and are delighted that these changes will bring much needed competition to the market for mortgages, home renovations and business loans”.
“We look forward to providing the wider range and higher volume of loans now permitted under the new rules and welcome the Regulator’s commitment to re-evaluating these limits as the sector evolves in these areas of lending. In particular CUDA believes credit unions are ready and willing to help do more in filling the void for business loans left by the banks”.
Kevin Johnson went on to express disappointment that credit unions will be prohibited from supporting aspects of Government Housing Policy such as the Repair and Leasing Scheme. There is no logic, he said, to prohibiting credit unions from providing much needed loans to their members who want to help rebuild Ireland through the Repair and Leasing Scheme. Kevin further expressed disappointment with the limit on the number of business loans a credit union can do in a time when many credit union members who are small businesses are crying out for funding.
CUDA is committed to getting solutions to these issues and will speak directly with the Department of Finance, Department of Housing and the CBI on these matters.
Kevin concluded, “It’s very encouraging to find that 59% of people aged between 18-34 either agreed or strongly agreed with the perception of credit unions being ‘dynamic and innovative’. We have made huge effort and investment in recent years to develop our work in line with advances in technology through our innovation hub, the Solution Centre. In the past three years we have introduced new lending products and these new limit rules from the Central Bank will allow us help credit unions further develop. Our Digital Marketing adverts reached 2.74m people so far in 2019, creating over 18,000 loan leads with a value of €102m. We are committed to broadening the appeal and relevance of the credit union movement among younger generations, and to making our services as accessible as possible, to as many members as we can, both old and new.”
CUDA was delighted to be invited to attend the launch of the a new full-service Current Account for Credit Union members. It includes a globally accepted Mastercard Debit Card with contactless payments, standing orders, direct debits, and an overdraft facility. Credit Union members will be able to open an account online or in person at a Credit Union branch.
The roll-out of the new service commenced 17th October ’19 and sees 30 Credit Unions, with 115 branches throughout the country, offering this new service over the coming weeks. Further Credit Unions are expected to provide the service in 2020.
The Current Account offers simple and transparent pricing including a low monthly (standard) fee of €4, which covers unlimited (euro) point of sale and contactless transactions, unlimited mobile and online banking, unlimited standing orders and direct debits, and up to five ATM withdrawals (euro) per month.
CUDA wishes the participating credit unions, and their owned shared services company Payac Services who have colloborated successfully to bring currentaccount.ie to market, every success
with this initiative. At CUDA we understand the benefits of collaboration to enable credit unions to engage in beneficial activities which would not have proved possible to do as single stand-alone entities. CUDA, through the Solution Centre, enjoys managing a variety of solutions within its network to their mutual benefit.
Hundreds of thousands of credit union members throughout Ireland will have access to a new home improvement funding scheme from early May, as the Solution Centre* in conjunction with the SEAI** and REIL*** roll-out its ‘Pro Energy Homes Scheme’
“Rapid growth in Credit Union lending expected to continue as Solution Centre rolls out enhanced Credit Union Business Model”
Responding to today’s launch of the Joint Committee on Business, Enterprise and Innovation’s Report entitled “ The Cost of doing Business ” and last week’s decision by the Department of Rural and Community Development and the Department of Finance, not to support the establishment of a new local public banking system, CUDA (Credit Union Development Association), the representative and lobby group for Ireland’s largest credit unions, said that its 48 strong network of the more progressive credit unions can fill this void and provide the much needed competition to the banks.
Speaking at the launch today, Kevin Johnson, CEO of CUDA, which is also behind the Solution Centre – a collaborative initiative that supplies product development and business supports to the Credit Union sector to enable them to lend to non-core sectors,
“We welcome the excellent work of both Joint Committees and their recognition that the cost of doing business, particularly the cost of borrowing needs be brought down, and that priority should be given to working with the existing framework provided by credit unions and An Post networks nationwide. Credit unions are already playing an increasing role in the Irish retail financial sector and CUDA anticipates working closely with the Central Bank of Ireland to expand the product and services that credit union branches throughout the country can offer individual and business members.
While having enjoyed strong lending growth in 2017, our 48 member credit unions are forecasting rapid growth in 2018 & 2019.”
CUDA say that it has taken a leadership role in lobbying for and developing the changes that are essential for credit unions to meet the demands of the current financial landscape. Through the Solution Centre, they have introduced new products, and implemented new processes and systems that will deliver the benefits that the advocates for public community banking are seeking.”
Mr. Johnson continued,
“Credit Unions have the lending capacity and are developing the expertise to take an enhanced role in relation to lending to SMEs. In tandem with the accompanying management and advisory support structures offered by the Solution Centre, numerous credit unions throughout the country could provide loans to SME’s, say up to €75,000.”
Mr. Johnson concluded,
“Credit unions can be at the financial heartbeat of our indigenous economy and can create a platform for rural revival, and indeed urban stimulation. With 268 credit unions and billions of euro currently available to lend, credit unions are very well positioned to deliver this service.”
Note to the Editor
The Solution Centre
A group of the country’s strongest credit unions established the Solutions Centre, a FinTech facilitated by CUDA, which supplies product development and business supports to the Credit Union sector and has embarked on an ambitious business transformation programme for the sector, of which mortgages is just one milestone.
Rather than simply replicating the actions of banks, the Solution Centre believes that credit unions have the flexibility and adaptability to quickly adopt new ways of doing business that will see a re-building of their market share. Credit Unions participating in our digital loan marketing programme have seen loan growth of 10-20% in a relatively short space of time, with minimal investment. It’s clear the movement’s leading credit unions have embarked on a transformative digital journey.
With 48 of the larger and more progressive credit unions, representing one third of credit unions members, coming together under the Solution Centre umbrella – we now have a structure to facilitate credit unions to achieve their goal of continuing as consumer-owned co-operatives, while delivering much needed new products and services to their members.
CUDA, the Credit Union Development Association, was legally incorporated in 2003. In its early days it was the representative voice, on behalf of its owner member credit unions, with legislators and regulators. It has since evolved and now, as well as providing a ‘voice’, it is increasingly providing support facilities in the areas of regulatory compliance, risk management, shared services and competency development.
Ireland’s credit unions must try to meet the needs of borrowers and savers by evolving
What’s uniquely interesting about credit unions is that the ‘problem’ is how to deal with, and build on, success. Credit Unions have approximately 3 million members, who continue to shrewdly save and have now amassed in excess of €12bn in savings. The challenge for credit unions is how to help their members who continue to build their ‘safety net’ through savings with a fair reward without putting these funds at risk – the latter of which is a shared objective with the regulator. Consistent with the objectives of the credit union, as enshrined in legislation, they also want to meet the borrowing needs of their members with a range of loans. This will ensure mutual benefit for savers and borrowers, by charging a fair rate to borrowers and paying a fair rate to savers.
Credit unions have embraced the enhanced governance framework, introduced in the Credit Union Act 2012 and subsequent regulations, at significant additional costs, but, as intended in the report by the Commission on Credit Unions, the quid pro quo of a more enabling tiered regulatory approach has not yet been delivered. It is worth noting that credit unions are more restricted now than prior to 2012 as a result of these new regulations – that’s not good for consumers, communities or their credit unions.
So what’s the way forward? There are several actions that can be taken to ensure the uniqueness of the credit union model is recognised by decision makers, while credit unions themselves can continue to evolve their capabilities;
- Establish a ‘Select Sub-Committee on Credit Unions’ from the Committee on Finance, Public Expenditure and Reform, and Taoiseach to play a key role in scrutinising the ongoing relevance of legislation, policy and related credit union matters;
- Introduce proportionate regulations, which will allow some credit unions to continue offering basic savings and loans only, while allowing other credit unions to develop and offer a greater range of services, provided they have what is necessary to manage the additional inherent risks.
- Amend the Credit Union Act ‘97 to allow credit unions lend directly to Housing Bodies for Social & Affordable Housing. This will let them meet their social objectives which will help counter balance any perceived loss of cohesion and identity as they get bigger;
- Reflect the importance of credit unions to the people of Ireland by having their regulator, the Registrar of Credit Unions, report directly to the Governor of the Central Bank of Ireland.
- Build on the successes of 2016, probably the biggest year of change in the credit union sector for decades, with considerable consolidation through mergers and the establishment of non-partisan collaboration groups such as the Solution Centre.
While CUDA will relentlessly continue to seek actions 1 to 4 above, action 5 means that credit unions offering a full range of financial services, from personal loans, mortgages, payments, investments, insurance and pensions, is now closer than ever before. We are seeing a rapidly increasing level of cooperation between credit unions, which initially focused on shared management service arrangements such as regulatory compliance and risk management, but has now expanded to significant projects supported with full risk analysis to enable a more expedient regulatory approval process facilitated through the formation of the Solution Centre, a hothouse unit developing specialist products, supports and solutions for credit unions and now has membership of credit unions who manage over one third of the assets of the sector.
Credit Unions who share the desire to develop their business model are collaborating through the Solution Centre and are starting to deliver a stronger and more forthright sector. This is good for consumers on so many levels – apart from ensuring fair interest rates and fees in the market, it allows people to be part of a highly-networked community focused on economic, social and environmental change.
It’s already working because initiatives are fully thought through; for example, in the case of the new mortgage support offering, a full assessment of all the steps in the process was completed and those credit unions utilising this resource will have ongoing access to specialist expertise. This should give confidence to regulators to extend the limits under which all credit unions currently operate.
Credit unions working together have the desire and the skill-set to develop and to become a real alternative to banks and other finance houses. Credit unions have approximately €4billion out in loans, which is less than 30% of their assets, ideally this should be closer to 70%. This means they have a staggering €6bn available to lend.
So, what does all this development mean for credit union members? Anyone who joins will get improved, better tailored financial services in terms of mortgages, personal lending and savings, while also participating in a unique relationship with their credit union. While members are often aware of how dependent they are on their credit union, it is actually an interdependent relationship. In practical terms, credit unions will improve their communications to ensure that members appreciate the co-dependent benefits of doing business with their credit union, and will not want or need to go elsewhere for their financial services.
Chief Executive Officer
Credit Union Development Association