Cooperation Among Cooperatives

This week, takes a look at the role CUSOs play in compliance. Plus, enjoy our Graphic Of The Week on the competitive advantage technology offers credit unions.

CUSOs are a concept distinct to the cooperatively inclined credit union movement. Permitted services fall into several categories including loan origination, technology, and insurance, among others. But increasingly, credit unions are leveraging CUSOs to help with compliance.

That’s why this week, takes a look at how CUSOs are used for compliance, plus a bonus Graphic Of The Week on the competitive advantage technology offers credit unions.

When it comes to financial transactions, consumers want enhanced services that are easy to use. Credit unions that can meet this expectation have the potential to build strong member relationships that can translate into improved financial performance across a range of measures.

In 2015, Callahan Associates analyzed the performance of credit unions with less than $100 million in assets that also offered all of the following technological options to members:

  • Mobile banking.
  • Remote deposit capture.
  • Electronic signature authentication.
  • Electronic bill pay.
  • Electronic member application.
  • Electronic loan application.
  • Electronic share account application.

The charts in 5 Graphs That Show How Technology Offers A Competitive Advantage by Callahan director of industry analysis Sam Taft shows how these credit unions outperform their peers in growth, penetration, and average relationships.

How credit unions select and manage third-party vendors has been a hot topic growing hotter as the need to quickly add products and services while controlling costs and risk increases the demand for those outside specialists.

Regulator scrutiny of those relationships is also growing, especially in the area of information security. That includes the NCUA, which is continuing its drive to win congressional permission to directly examine vendors themselves.

Credit unions have been taking a variety of approaches to the vendor management challenge, including using in-house specialists, consultants, and CUSOs. In How To Manage Change In Vendor Management, Callahan senior writer Marc Rapport takes a look at some of these innovative approaches underway in the past year.

Credit union service organizations (CUSOs) have long attracted interest from credit unions interested in collaboration and innovation, but they’ve been drawing increasing regulator scrutiny as well.

The NCUA has been trying to increase oversight on CUSOs for years. That’s taken various forms, such as seeking congressional authority to examine third-party vendors and a November 2013 rule that requires all CUSOs to provide basic profile information to the NCUA every year.

Read more about how the growing role of credit union service organizations in providing scale and expertise has caused increased scrutiny from the industry regulator in Compliance Comes To CUSOs by Marc Rapport.

Lastly, which credit unions are investing dollars in and loaning money to CUSOs? Find out in 10 Credit Union Leaders Supporting CUSO Innovation.

Happy Reading!

July 5, 2016

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