Maine CU League Lends Central Business Model Expertise to British Credit Unions
Credit unions get both efficiency and innovation through credit union-owned Synergent
August 29, 2012
PORTLAND, Maine — Credit union membership in the United Kingdom has more than doubled in the past decade; assets have more than tripled in value; and U.K. legislative reforms enacted earlier this year have presented even greater prospects for credit union growth. To help meet a growing demand for member services, Association of British Credit Unions Limited (ABCUL) Chief Executive Mark Lyonette visited the United States last week to learn how a central business model developed for credit unions in Maine could be adapted for the British credit union system.
Credit unions in the United Kingdom recently reached the million member milestone, but many institutions remain relatively small and financially restricted in terms of product and service development. As such, ABCUL's member credit unions have petitioned the trade association for a shared business model to centralize data processing and offer more products and services to an even broader population base. A data service bureau would also help reduce the number of third-party service providers the credit unions would otherwise have to contract separately.
Mark Lyonette, ABCUL chief executive, speaks with Roger Sirois, Atlantic Regional Federal Credit Union president/CEO, about the advantages Atlantic Regional has experienced with a central processing system.
At ABCUL's request, World Council of Credit Unions organized Lyonette's visit to Maine last week to learn how the state league's credit union-owned subsidiary, Synergent, has managed a successful central business model for 41 years.
Originally named the Maine Credit Union League Services Corporation, Synergent was founded to provide credit unions greater convenience through a form ordering service. Within just a few years, it established a data processing center to meet the credit unions' growing needs. Today, Synergent provides checking, ATM debit cards, shared branching and direct marketing services for credit unions. Synergent's ongoing operations also include writing custom code in response to credit unions' requests for tailored products and services.
"Many centralized credit union systems achieve efficiencies by offering the same products for all credit unions," said Brian Branch, World Council president and CEO, who joined Lyonette in Maine last week. He noted that Maine's core data processing system offers a variety of choices for add-on products that allows credit unions to achieve both efficiency and entrepreneurial innovation in serving members.
Synergent, a credit union service organization, generates US$27 million in revenue and US$10 million in data processing annually. Its products and services now reach over a half million members in northern New England, New York and southern Connecticut. The company bills credit unions per member rather than per transaction, and longer contract terms lower the per member fee. There are now 600,000 members using Synergent's system.
During his visit, Lyonette met with executives from Evergreen Credit Union in Portland and Atlantic Regional Federal Credit Union in Brunswick. Atlantic Regional began using Synergent's services in 1982 and has since grown to 18,300 members and US$250 million in assets. President/CEO Roger Sirois explained how shared branching has helped the credit union reduce expenses by being able to keep its branch offices closed on Saturdays when members can access services through other credit unions in the network. Sirois also emphasized the importance of the core processing system's flexibility, which he said drove credit union innovation and allowed small credit unions to offer an array of products on par with larger financial institutions. He said that 2011 was the first time walk-in traffic at Atlantic Regional was less than its web traffic.
John Murphy, president/CEO of the Maine Credit Union League and Synergent, saw the opportunity to work with World Council to host ABCUL as a chance to help strengthen credit union popularity in the United Kingdom.
"The Maine League, Synergent and Maine's credit unions are committed to sharing information and collaborating with other credit union systems around the world to strengthen credit unions and promote growth globally," Murphy said. He noted that the Maine Credit Union League and Synergent previously hosted similar visits with officials from the Rwandan credit union movement. "We enjoyed doing it again and look forward to other collaborative opportunities in the future," he said.
Synergent continues to provide guidance as ABCUL develops a central business model for credit unions in the United Kingdom.
Read more about the collaboration at Branch's blog, http://makingadifference.posterous.com.
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, 60,500 credit unions in 109 countries serve 223 million people. Learn more about World Council's impact around the world at www.woccu.org.
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