Wednesday, October 04, 2006
Some Credit Unions Offering National Access
Credit-union members from across the country can access their accounts at the Vestal outlet of Visions Federal Credit Union. The office is pan of a nationwide movement known as "Shared Service Centers" that allow visiting or vacationing credit-union members to make transactions on their share accounts as if they were at their own institution's branch.
Shared service centers
The Visions shared service center in Vestal is one of 12 outlets in New York and more than 450 across the country. One million credit-union members from three dozen credit unions in the state can transact business at the centers, says Marc Inger, director of business development for New York State Shared Service Centers. The entity is an affiliate of the New York State Credit Union League (NYSCUL).
Credit-union members who spend their winters in Florida, says Inger, formerly had to use a bank in that state for the winter months. Now, members can use one of the 54 shared service centers in Florida during their time away from home.
The movement for shared service centers began in Alabama in the early 1990s as a way to increase members' convenience, says Inger. New York's credit unions first began a shared service centers program in 1994 and opened the first locations in 1995. Most of the centers in the state are located on Long Island, where the movement has gained popularity.
New York Shared Service Centers (NYSSC) is run as a forprofit corporation because of the regulatory limitations placed on credit unions by their nonprofit status. Similar companies have been formed to operate businesses such as the Sharenet ATM network owned by several Syracuse-area credit unions.
The Visions Shared Service Center is known as an "acquirer," one of two sides of the shared-center equation. Credit unions that allow members to access their accounts at Visions are known as "issuers." The issuers pay a fee to the acquirer for each transaction completed at the shared center, says Inger.
The issuer can then pass along that fee to the member, but often won't charge the member for the service, he adds. The fees vary according to the type of transaction the visiting member completes.
Visions FCU, an issuer and an acquirer, doesn't pass the fee along when its members use a shared service center, says John Wilbur, marketing manager for Visions.
"Shared service centers," he says, "are an added benefit for our members."
The added benefit also keeps members in the credit union when they move away, says Inger. Retired credit-union members can maintain their relationship with their credit union after they retire by taking advantage of the nationwide network.
To become an issuer, a credit union contacts NYSSC and arranges to become certified to receive transactions from acquirers. The issuer will choose one of two computer systems that are compatible with the nationwide system and then integrate that system with the credit union's share records.
The cost to become an issuer, says Inger, is approximately $3,000 for initial certification plus around $1,500 per month for data lines. Computers and the transaction fees also will add to the expense of linking to the network.
Acquirers like Visions can make money using the network, says Inger. The initial cost to become certified as an acquirer is $5,000. The acquirer has the same charges as the issuer but can reap a revenue stream from issuers to offset the cost of running the shared center, he adds. Acquirers can market their services to members of issuer credit unions to attract more users.
"Overall, it seems to be working quite well," says Visions' Wilbur.
The shared service centers are part of an overall trend toward giving members greater access to their share accounts, says Susan Farnsworth, marketing communications specialist at Empire FCU.
Increasing electronic access
Over the past several years, she says, members have been able to access their accounts by telephone, computer, and at branch locations.
Empire is re-launching a branch location in the Syracuse suburb of Clay after researching why the location was underused. When Empire opened the branch in 1998, it was christened the "Clay Electronic Branch."
The name was problematic for two reasons, says Robert Padula, Empire's vice president for information technology. According to the credit union's research, members found the location of "Clay" to be vague. The sprawling town features several commercial areas rather than a central business district, and the members didn't know exactly where in Clay the branch was located.
The word "electronic," says Padula, was a turn-off for many credit-union members who belong for the personal contact and service offered by the smaller financial institutions. The credit union's research showed the members who did use the Clay branch valued the location for its proximity to suburban homes and businesses.
Subscribe to Posts [Atom]
