The Ubiquitous Solution
Unable to expand beyond its geographic field of membership in the Canadian province of British Columbia, Prospera Credit Union has chartered an online financial institution that knows no boundaries: Ubiquity Bank.
With just three employees, Ubiquity Bank is wholly owned by Prospera CU, the third Canadian credit union to open its own bank. The lack of a federal credit union charter in Canada has forced credit unions in the country to get creative in expanding beyond the strict provincial boundaries in which they must operate.
"As a larger credit union, we have members who may wish to business outside of the province, but we could not serve them," explained Prospera CU CEO Keith Puiu. "The credit union already had a virtual division that was raising deposits under the Ubiquity name, so we had the infrastructure and some name recognition. We also felt there was a potential niche for a new national bank offering virtual services."
Ubiquity Bank's business plan focuses on online services, but it does call for some physical branches in the future. "We are part of the Exchange network, so we have 1,400 ATMs where people can make deposits and have easy access. We also have a phone contact center, and it's right here in Abbotsford, not some foreign country, so people can contact the call center or go online. We will eventually have some boutique branches, as well, but the focus is on virtual services."
Not only will Ubiquity Bank allow the credit union to reach out beyond British Columbia, but it will also cater to high-deposit accounts and commercial lending clients.
"There are other virtual banks out there, and in some ways, Ubiquity will look a lot like those. But because it has the credit union behind it, we can offer a more integrated approach to a virtual bank. We intend to have more of a relationship (with our customers). In creating Ubiquity, convenience and simplicity were the keys."
While Canadian credit unions have long lobbied for the creation of a federal charter that would allow them to do business in multiple provinces, Puiu said it didn't look like those efforts would come to fruition fast enough for Prospera's taste. "We've been growing fairly substantially. We need a national platform," he said, noting the irony of how the credit union has resolved the issue. "Credit unions can't do business nationally, but we can own a national bank."
With the charter so restricted geographically, why not convert the credit union to a national bank? "I suppose we could do that, but we have 60,000 members, and we're nearly $1.7 billion in assets. We have a commitment to those members, and we are committed to this region," Puiu commented. "This is an addition to the credit union. Members will benefit from it in that if it's a profitable entity, it flows back to them. Plus, some members may wish to do business with Ubiquity."
Prospera CU has been engaged in a major reinvention of itself since taking the Prospera name following the merger of Fraser Valley CU and Edelweiss CU about three years ago.
"We needed a brand new name to move throughout the province," Puiu explained. "We've really enhanced our image. Our branches have fireplaces, water features and televisions. We wanted to create a soft, comfortable environment. Our advertising is cutting edge and has won numerous marketing awards. The credit union has really rebranded itself. We also own a number of insurance agencies throughout the province and have a large commercial lending presence."
The credit union also boasts three consecutive record profit years and is on track to break those records again this year.
While a primary motivation behind the creation of Ubiquity Bank was to cross provincial boundaries, Puiu noted that he and other members of his staff regularly cross the border into the U.S. to learn more about what American credit unions and other financial institutions are doing.
"I probably attend two or three conferences a year in the U.S., and my staff does, too," Puiu offered. "We get a lot out of them, and it's important to us to foster those relationships."
VanCity Savings was the first credit union to open a bank-Citizens Bank-in 1997. The other credit union bank is in Ottawa. Prospera is the fourth largest CU in British Columbia.