MADISON, Wis.-Throughout their history, credit unions have developed a reputation as conservative institutions, but in many ways have been progressive, leading-edge pioneers.
Case in point is technology. The small size of many CUs relative to banks has often forced them to be creative, and to avoid making big investments in legacy systems and technologies that later prevented the ability to adapt to something new.
As with much of technological innovation in the financial services, it often comes as a result of an alternative to tedious, mind-numbing work. When Larry Blanchard, SVP special projects, CUNA Mutual Group, Madison, Wis., worked at Douglas Aircraft, its CU had 80,000 members.
"We had to hand-post accounts for our members," he said. "During 1962 to 1967 we developed software so we could change from hand-posting to electronic posting of accounts."
"Credit unions were on the forefront of technology," continued Blanchard. "They pioneered a lot of technology because of the number of members - basic electronic funds transfer, electronic posting of accounts."
Blanchard credits Herb Wegner, the former CUNA president who died in the 1970s, for pushing "credit unions into the electronic age." Wegner was appointed vice chairman of Congress' National Commission on Electronic Funds Transfer in 1975.
As recently as 25 years ago, many banks still batched deposits, while credit unions deposited electronically in real time, according to Glenn Strebe, CEO of the $385-million Air Academy FCU in Colorado Springs, Colo.
"With Internet banking, credit unions became more consumer oriented and drivers of technology," he said. "Credit unions drive the market place and lead consumers to Internet banking and bill paying. Prior to the age of Internet, though, credit unions were reactive."
Among the greatest of CU technology achievements is that the $926-million Stanford FCU, Palo in Alto, Calif. became the first financial institution in the world to offer the Internet to its members. It offered online banking in 1993 and the following year had the first website.
