Credit Unions make fresh attempt to go hi-tech after €35m fiasco
Monday April 28 2008
Almost a decade after their disastrous efforts to offer electronic services to their members, Irish credit unions are getting a second chance to compete on an equal hi-tech footing with the banks.
The development has long been recognised by the credit union movement as essential to entice more young members, in particular, into credit unions and away from the main banks where ease of access to their funds and payments is a key draw.
But the initial attempt to offer a common electronic fund transfer facility to all members failed spectacularly in 2001. The ISIS project, promoted by the Irish League of Credit Unions through its company ILCUTECH, cost a whopping €35m in under three years, with no tangible return whatever to members.
And while some individual credit unions now offer partial electronic services -- about 10pc of outlets have ATM facilities but often with a card that is only useable in its own facility -- no common system operates.
This time, however, the full range of electronic fund transfer facilities, including the introduction of a common ATM card for credit union members, is being prepared -- not by the unions themselves, but by a company established by the credit unions' nine main software suppliers.
It aims ultimately to offer all the electronic fund transfer (EFT) and payments facilities being provided by the main banks. The country's 430 credit unions will be asked to signal their commitment to the new strategy over the coming months.
The credit union software suppliers have signed a historic co-operative agreement to integrate existing EFT services.
Access
Operating under the CUeS (Credit Union Electronic Services) umbrella, they are already well advanced in establishing a set of common standards and interfaces to provide credit unions with wider access to the clearing system in Ireland and, by 2010, across the European Union.
BNP Paribas, a leader in global banking and financial services, is acting as the clearing agent to manage settlements on behalf of all participating credit unions. BNP Paribas already acts as clearing agent for a number of Irish and foreign banks based in this country and the facility will allow credit union members to mandate their salaries to their credit unions and to pay bills electronically.
CUeS is also in negotiations with card management companies with a view to providing members with ATM cards for cash withdrawal and debit cards for retail purchasers.
- Brian McDonald
