ALEXANDRIA, Va. - A fledgling NCUA workgroup may help bridge the “digital divide” that continues to isolate a good number of small credit unions, according to the Office of Small Credit Union Initiatives (OSCUI) here.
“We are in the initial stages of forming a small internal workgroup to develop strategies to assist small credit unions wishing to become computerized,” OSCUI told Credit Union Journal. The workgroup, which will include NCUA regional and central office staff, will identify the technology challenges–and any available resources–that small CUs face, the OSCUI said.
“Our agency has continuously explored ways to assist small credit unions, especially in the enhancement of their operations and services to members,” OSCUI said.
The OSCUI did not say when the workgroup would convene, or identify a source or amount of funding, nor did it go into detail as to what would be offered to qualified CUs.
What’s clear, however, is that a lack of resources is keeping technology out of reach at certain credit unions, which still run their businesses on paper or are missing from the World Wide Web.
“There’s no way I have the knowledge or skills to do justice to a website, much less online banking,” explained Audrey Lane, manager of the $8-million P.C. FCU in Port Allegany, Penn. “And it’s very difficult for smaller CUs to afford those kinds of services because we can’t hire an IT person or make sure we’re in compliance.”
The dark side of the digital divide is daunting, Lane added. “Our membership base is getting quite a bit younger, and our younger members want to bank and pay bills online. If I had to hazard a guess, I’d say at least half of the membership is using electronic methods to pay bills, but, unfortunately, not through our credit union. And every time a member wants to know if a check has cleared, they have to call us directly.”
Less than 20% of CUs under $10 million offer home banking to members, according to Callahan and Associate’s 2007 CU Technology Survey. Compare that to the more than 95% of CUs with more than $20 million in assets that offer the service.
It’s harder to measure how many CUs are completely computerless, but experience tells Sherry Post, an NCUA Region II principal examiner, that not all CUs have gone digital.
“It has been several years since I’ve worked with a credit union that is completely computerless, but I know there are still some out there,” Post said. “In my district, I do have partially computerized credit unions that process share and loan transactions on computers but maintain a hand-posted general ledger.”
Post took action last year when she spearheaded an effort to put six small Pennsylvania CUs on the Web. Built with grants from the Pennsylvania CU Association (PCUA) and the NCUA, the resulting site serves as the joint homepage for the McKean County-based credit unions, which range from $450,000 to $8 million in assets. Links on the front page take visitors to a satellite homepage for each of the participating CUs.
One of those credit unions was P.C. FCU. The site was the first foray onto the Web for the credit union, which, at $8 million in assets, is the largest of the McKean County Credit Union partnership, said Lane. The CU used some grant money to hire a web administrator and buy a host server, she added. “Now that we’ve launched the websites, the hard part is done,” Lane continued. “We’ve got the NCUA and PCUA right there with us.”
Internet banking and bill pay are the next step. “The ability to add online banking is just a matter of making an adjustment with our data processor. It won’t be hard.”
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For info on this story:
* www.mckeancountycreditunions .org
* www.pcfederalcu.org
