SOPOT, Poland — Credit unions in Poland take a collaborative and integrated approach to service. The institutions operate under a uniform brand and utilize system-wide operations and management capabilities to serve Poland's 2.2 million credit union members more efficiently. And at least several Iowa credit union officials would like to see similar economies of scale at work in their state.
With the help of World Council of Credit Unions (WOCCU), Iowa Credit Union League President and CEO Patrick S. Jury and League Vice Chair Tim Chapman, president and CEO of Members Community Credit Union in Muscatine, last week traveled to Sopot, Poland, and several cities in Germany to discuss collaborative efforts and visit cooperative financial institutions. The trip's goal was to examine ways in which credit unions in other countries effectively manage resources through collaboration in hopes of finding ways for Iowa's credit unions to save money while better serving their members.
"Credit union income is under significant pressure due to corporate stabilization needs and anticipated reductions in debit interchange income," Jury said. "We want to help Iowa's credit unions achieve greater economies of scale through collaborative efforts and make sure these initiatives add value for the credit union member."
Poland's SKOK credit union system works under one unified brand for all of the country's 62 credit unions and their 1,837 branches. All credit unions belong to the National Association of Cooperative Savings & Credit Unions (NACSCU), headquartered in Sopot and WOCCU's member in Poland, which provides the brand identity and system-wide marketing and investment services. NACSCU provides a framework for products, but credit unions set their own pricing, an arrangement that enables them to operate more competitively, according to Brian Branch, WOCCU's executive vice president and COO.
"Outsourcing services through these companies reduces costs for all credit unions and allows small credit unions to implement programs they otherwise could not afford to do," said Branch, who accompanied Jury and Chapman on the two-country tour. "These include uniform credit analyses, standardized product development with pricing appropriate credit unions, common branch-office design and standardized marketing initiatives."
The SKOK system owns several companies that provide economies of scale in serving credit unions, Branch said. The companies provide expertise in supervision, insurance, investment funds management, publishing, accounting software, training, financial education and arbitration available to all NACSCU members.
The SKOK network electronic payments system (HSO) supports 848 ATMs, includes 2 mobile ATMs and has 1,100 POS devices. HSO provides credit union software, telecommunications card services and electronic settlement and payment services, allowing credit unions of all sizes to offer call center services, internet banking and credit scoring system. It also provides association centralized collections, offers remittances and is a member of Visa, Branch added.
In 2010, a pilot group of nine credit unions representing 50% of the system's assets integrated under the Stefczyk credit union banner to share management services through a limited partnership joint stock company, TZ SKOK. The participating credit unions united around a common commitment to compete aggressively with Poland's banks. The group is led by Stefczyk credit union, which has 759,000 members served by 369 branches and 2,200 employees. Stefczyk's US$1.9 billion dollars in assets constitute 29% of the assets of the entire the Polish credit union system.
"The Stefczyk group is an interesting idea that I would like explore more fully with Iowa's credit unions," Jury said. "We have 135 credit unions in Iowa, all but one of which are state-chartered. We're a close-knit credit union community with long-standing leadership, and we believe there are great opportunities to work together."
The group also met with leadership from the National Association of German Cooperative Banks, the International Raiffeisen Union and other German financial cooperatives. The maturity of the German system yielded additional ideas to those learned in Poland, which launched its modern credit union movement in 1992. Visits to both countries' systems opened participants' eyes to possibilities, according to Branch.
"There is a great deal of interest among U.S. credit unions to control costs and improve efficiencies," said Branch. "Many economies can be achieved through collaborative effort, and cooperative systems in other countries offer models of how to do that."
World Council of Credit Unions is the global trade association and development agency for credit unions. World Council promotes the sustainable development of credit unions and other financial cooperatives around the world to empower people through access to high quality and affordable financial services. World Council advocates on behalf of the global credit union system before international organizations and works with national governments to improve legislation and regulation. Its technical assistance programs introduce new tools and technologies to strengthen credit unions' financial performance and increase their outreach.
World Council has implemented more than 290 technical assistance programs in 71 countries. Worldwide, 57,000 credit unions in 105 countries serve 217 million people. Learn more about World Council's impact around the world at www.woccu.org.