FT. WALTON BEACH, Fla. - Technology CUSOs gained ground this year as credit unions continue to band together to share systems-and power.
Take Eglin FCU, a CUSO shareholder, which took turns at the wheel in the development of its new data processing system, said Phipps McGee, CEO at the $950-million CU here.
"Having a say in the system as a shareholder is a big plus, as opposed to the input we could give if we were strictly a customer," Phipps said. "When it was time to convert, we didn't even go out and look at other systems."
Credit-union owned technology seems to be a compelling concept for many credit unions. For example, the client base at Share One of Memphis, Tenn., grew by 10% this year to 40 clients, one of which is Eglin FCU.
And eCU Technologies, the CUSO owned by Pennsylvania State Employees CU in Harrisburg, Penn., grew by 25% last year and 7% this year, with multiple contract renewals.
Meanwhile, Wescom Resources Group, the Wescom CU CUSO in Pasadena, Calif., saw a 30% increase in its client base this year.
Of the larger technology CUSOs, Kentwood, Mich.-based CU*Answers, owned by 70 credit unions, realized an 8% increase in core processing clients this year.
Despite the growth of the nation's CUSOs, most credit unions still partner with corporate technology providers.
"Many credit unions think that the Symitars of the world are the superstars because they have all the big credit unions," said Lynn Huether, CEO at Class Act FCU in Louisville, Ky. "Credit unions simply aren't aware of other opportunities."
The $90-million Class Act, along with Eglin FCU, is one of Share One's original shareholders.
Share One has provided data processing services since the 1970s, becoming a CUSO in 2000 in order to support the development of its new transaction processing system, NewSolutions.
"We aren't one of those companies with deep pockets that doesn't need the participation of its customers to get the job done," explained Daryl Tanner, CEO of Share One. "We took the risk of developing a new system from scratch with standard Microsoft tools, and the only way to do that was in partnership with customers."
NewSolutions runs on a Microsoft SQL server with a full range of features, such as imaging, reporting, data analysis, Intranet and automated loan decisioning.
"We appreciate the amount of detail that has been made available to various departments by NewSolutions, such as history, holds and account links," said Huether at Class Act. "Staff members don't have to go to another department or toggle between programs to get answers."
Share One doesn't play favorites with its customers, according to Dale Debs, information technology director of Cascade Community FCU in Roseburg, Ore.
The $95-million credit union is not a shareholder, but it still gets the royal treatment, said Debs.
"We received about five quotes on competitive systems before we chose NewSolutions, and we found that, with the other companies, we would have had very little say, if any, in the development of products," Debs said.
At Share One, Debs is known as the 'King of Customer Service Requests'-requests that are often fulfilled at a reasonable price, he said.
Most recently, Cascade Community paid Share One to create an online voting system for its Board of Directors that will "save a bundle of money," Debs said.
Cascade Community last year boasted a 1.7% return on assets, better than the 35 largest credit unions in Oregon, according to an informal review by the CU.
"Our efficiency and profitability have taken off, and NewSolutions has really helped," said Debs.
CUJ Resources
For info on this story:
* Cascade Community FCU at www.cascadecu.org
* Class Act FCU at www.classact.org
* Elgin FCU at www.elginfcu.org
* Share One at www.shareone.com
