Challenge 2025

The Digitization of the Global Credit Union System

 

A New Decade, A New Goal

In 2014, World Council of Credit Unions set a goal of reaching 260 million credit union members worldwide by 2020.

Through a concentrated worldwide effort, credit unions were able to reach our "Vision 2020" goal by 2017. But that growth was not even across all countries or among all credit unions. The credit unions that grew were those that offered core services via online and mobile channels. That is why we are now addressing how we increase membership going forward—through the digitization of the global credit union system by 2025.

Measuring Global Digitization

World Council will measure the digitization of credit unions in four key areas and report annually on the progress being made toward Challenge 2025.

Digital Channels

Offering members core digital transaction services such as online and mobile banking, online payments and online loan processing.

Digital Payments

Connecting your credit union to a shared payments system that allows for mobile payments and integrated with a national payments system.

Data Analytics

Employing data analytics to determine additional service offerings to members, and helping to identify those that need financial literacy or counseling services.

Cybersecurity

Implementation of a cybersecurity system that complies with national regulations to protect members' consumer data from digital attacks and intrusions.

 

Follow Our Progress, Tell Us About Yours

Track the latest developments in digitization by subscribing to our Challenge 2025 Blog. You can also send us updates on how your credit union or credit union system is striving to help us meet Challenge 2025 at communications@woccu.org

Challenge 2025: Where Are We?

The COVID-19 crisis has established a new sense of urgency for the digital transformation of credit unions. Many credit unions tell us that digital transformation is their number one priority.

In support of Challenge 2025, the digitization of the global credit union system, World Council completed a survey of our national association members on the status of digital offerings in their country. 

The basic level of credit union digital transformation is to offer core services via digital online and mobile channels.

Previously, this was a matter of consumer convenience and competitiveness.  Consumers do their social networking, get their news, make payments and do their commerce now via online and mobile channels. It is only natural that they expect to do their finance via digital channels as well.

Online and Mobile Channels

From those member organizations who responded, we know that online banking channels are offered in:

  • 100% of credit unions in Brazil and Guatemala.
  • 84% in Poland.
  • 71% in the Dominican Republic
  • 70% in Kenya,
  • 30% in Estonia.
  • 10% in Cameroon.

Online loan processing and approval has proven to be a major membership growth onloading ramp for credit unions. Online loan processing is available via national associations in Brazil, Guatemala, Poland and Kenya.

Mobile phone transactions are integrated into the online banking channel for credit unions in Brazil, Guatemala, Dominican Republic, Poland, Estonia, Nepal, Kenya and Cameroon.

When it comes to mobile banking channels, we they are offered in:

  • 100% of credit unions in Brazil and Guatemala.
  • 84% in Poland.
  • 70% in Kenya.
  • 35% in Dominican Republic.
  • 30% in Estonia.
  • 15% in Cameroon.,
  • 12% in Malawi.
  • 8% in Nepal.

Mobile deposit services are available in Brazil, Guatemala, Poland Estonia, Nepal, Kenya and Malawi, while mobile loan processing and approval is available in Brazil, Poland, Estonia and Kenya.


In the COVID-19 world, it is no longer a just matter of convenience but rather an urgent consumer imperative for safety

In the post COVID-19 arrival, the definition of “most friendly service” changes from the previous definition of personal treatment to digital ease. Consumers look for digital channels that are simple, easy to use, require fewer clicks (steps), and work consistently without errors and dead ends.

Basic digitization requires integration into the local payments ecosystem.

Digital channels alone and transactions within a closed loop credit union system are not sufficient. Consumers expect seamless connection of credit union transactions with their payments or commerce service providers. This is interoperability.

Digital transformation requires an institutional foundation of automated, digital back-office processing.

For many credit union systems made up of small credit unions, shared platforms provide a vehicle for small credit unions to access digital technology

Shared platforms allow credit unions to share the investment in back-office data processing systems, which otherwise require the same redundant investments in many stand-alone credit union software and hardware. Credit unions are also able to share the cost of technical human expertise to manage and maintain technology solutions. 

By collaborating in shared platforms, credit unions are also able to extend their points of service to offer greater geographic scale and physical convenience. They are able to leverage their scale for negotiation with vendors and strategic alliances.

Data Processing Systems

Most member countries are made up of small credit unions whose long-term sustainability and digital transformation requires a foundation of efficient data processing. The expense of digitization challenges individual or small credit union systems—but credit unions have the advantage of being able to pool their resources and cooperate in building shared platforms to provide consolidated back-office processing and payment channels. 

From those associations who responded, we know that:

  • Brazil (Sicredi), Guatemala (FENACOAC), Poland (NACSCU), Dominican Republic (AIRAC), Cameroon (CamCCUL), Kenya (KUSCCO), Malawi (MUSCCO), Nepal (NEFSCUN) and Estonia (EUCC) offer a common back-office data processing system for credit unions.
  • We also know that the Korea (NACUFOK), El Salvador (FEDECACES) and Philippines’ associations (NATCCO and PFCCO) offer common data processing platforms for credit unions.
  • Of these, affiliated credit union usage ranges from a high of 100% in Brazil and Guatemala to:
    • 99% in Cameroon.
    • 96% in Poland.
    • 83% in Dominican Republic.
    • 75% in Malawi.
    • 15% in Nepal
    • 14% in Estonia.
    • 2% in Kenya.

In most other countries, credit unions use stand-alone commercial data processing packages. 

Many countries are made up of small credit unions and can pool resources with other credit unions or associations to establish a shared payments platform to:

  • reduce redundant investment,
  • achieve investment scale,
  • leverage bargaining power with vendors,
  • extend networks, and
  • facilitate regulatory requirements.

The success of shared payments platforms requires scale and it requires access to the national electronic payments system.

Shared Payments Platforms

Associations that offer shared payments platforms that allow credit unions to provide online and mobile payment services include:

  • Brazil (Sicredi), Guatemala (FENACOAC), Poland (NACSCU), Dominican Republic (AIRAC), Cameroon (CamCCUL), Kenya (KUSCCO), Malawi (MUSCCO), Nepal (NEFSCUN) and Estonia (EUCC).

We also know that the Korea (NACUFOK) and the Philippines' associations (NATCCO and PFCCO) offer shared payments platforms for credit unions. Australia has one of the most advanced shared payment platforms in the New Payments Platform (NPP), owned by and serving both cooperative and commercial banks, as well as credit unions.

Credit union usage of these platforms shows more variability, from:100% in Brazil and Guatemala to: 

  • 84% in Poland,
  • 53% in the Dominican Republic,
  • 35% in Cameroon,
  • 30% in Estonia and
  • 13% in Malawi.

The shared platforms are linked to the national payments systems in Australia, Brazil, Estonia, Kenya and Malawi. We also know that the Philippines (NATCCO and PFCCO) is making gains in negotiating linkage of their shared payments platform to the national payments system.


Several countries have found it is not efficient or affordable to create their own digital systems, but choose rather to build shared platforms and establish strategic alliances to aggregate credit unions to connect to digital systems and their country’s digital ecosystem. 

The success of shared payments platforms requires both scale and access to the national electronic payments system.

Digital transformation opens new portals to credit union systems and therefore higher levels of cyber risk. Regulatory requirements and the costs associated with risk management increase. Shared platforms also assist in sharing the cost and mitigating the risk of cyber security.

With digital transformation comes increased risk to consumer data protection and cybersecurity, placing greater responsibility on credit unions for the protection of their members

With transformation comes higher levels of responsibility and liability in providing protection to the members and the credit union. Collaboration of credit unions in shared platforms provide some countries with cost efficiencies and access to higher levels of technology in cyber protection, risk management and regulatory compliance.

Higher levels of digital transformation take advantage of data analysis to build credit unions’ trusted relationships with their members

Data analysis of member’s choices provides feedback for product design and service response. Whereas other commercial institutions use data analysis to sell more products to consumers, credit unions can use data analysis to provide members with options that are better for their members’ own economic benefit. It also provides credit unions with the opportunity to provide pro-active financial counseling to their members.

We will continue to update you as more of our member associations and credit unions share their experiences with digital transformation in the future.