SOUTHFIELD, Mich.- For years, Service Centers Corporation has operated as Michigan's only credit union-owned shared branch and automated teller machine network. But as SCC enters its silver anniversary year, the company is also celebrating achieving a longtime goal - contracts have been signed closing two key regional partnerships that eventually could lead to taking the shared branch network nationwide. "We're obviously pretty proud of what we've achieved, because we had no models," said SCC President/CEO Daniel J. Balagna. "We were pioneers in this whole concept that began in 1975. "We've certainly come a long way over the years since our humble beginnings. Technology is dramatically changing the way members receive various services, and it's changing the way we must do business," Balagna said. "However, with all this new technology, we remain consistent in our vision of cooperatively supporting shared delivery systems that enhance each participating credit unions' value to its member relationships." Dave Adams, president/CEO of Michigan Credit Union League, said SCC has been an asset to the industry for many years. "We have a deep appreciation for the leadership and the innovation that SCC has provided to Michigan credit unions as well as to credit unions and their members throughout the country," Adams said. "The fact that they now serve 240 credit unions in our state comprising the vast majority of credit unions members served and the assets held by all of our credit unions shows what a tremendous job they've done of helping credit unions with one dimension of their service delivery challenge, which is having adequate facilities to serve credit union members face-to-face. "In addition to that, the role that Service Centers plays with the SC24 ATM network has been phenomenal. In addition to helping credit unions with their ATM networking in an environment where credit unions have a voice over the service features and the rules of the sub-network, more recently, SCC has played a catalyst role in helping form a selective surcharge alliance called the Credit Union ATM Alliance, which now links more than 700 ATMs owned by Michigan credit unions. This has helped credit unions give their members access to ATMs without the surcharge fees that they otherwise would pay at bank ATMs," Adams said. "We're very pleased to be partners with such a strong, successful, innovative company that is doing so well at helping credit unions with their electronic fund transfer needs in the State of Michigan," he noted, in extending anniversary congratulations to SCC. One key staff member who has contributed quite a bit to SCC's success has been Leigh Marciniak, senior vice president and chief network officer. Marciniak, who has been with SCC for 10 years, worked on the formation of the Credit Union ATM Alliance. As part of SCC's efforts of the last few years to take shared branching beyond Michigan's borders, one key project has been to bring its entire information technology infrastructure in-house. This effort began in the early to mid-'90s. "We always knew that there would come a time as service centers continued to expand and grow that we would want to consider transitioning our need to rely on Dearborn Federal Credit Union (one of a small group of SCC-founding credit unions) or anyone else, taking full control of our technology infrastructure at that time," Balagna said. In the past, SCC had contracted with Dearborn Federal Credit Union, now a $1 billion-asset FCU, and its CUSO, Dearborn Financial Services, for its information technology services. This arrangement worked well for many years. But after signing on recently with Financial Service Centers Cooperative and Credit Union Services Corporation, SCC staff realized that, to achieve a national shared branching presence, they needed to own and control their technology. "We've always owned all the software applications, but we never actually owned all the computer equipment or employed the people. That was all part of a package contractual relationship with Dearborn Financial Services," Balagna explained. It was a major stepping stone to SCC's success over the last 25 years that Dearborn officials were willing to use their technical structure to write the software needed to get to where they are today, Balagna noted. J. Ronald Unger, president of Dearborn FCU, said it was all part of a common effort to serve members. "The shared branching network of Service Centers Corporation (SCC) has made it possible for us to offer greatly expanded branch and ATM services to members throughout Michigan and in neighboring states," Unger said. "As one of the founding member credit unions of SCC, we have always considered them an integral partner in our delivery systems." SCC officials anticipate that the technology link they are now working on to hook up with their two new shared branching partners, California-based Financial Service Centers Cooperative Inc. and Georgia-based Credit Union Services Corporation, will be in place about mid-year. "Within the past year, we've become an equal partner with both of those organizations to basically form a national network of shared branches among our three organizations," Balagna explained. "The other two started that effort a couple of years ago, and we are now coming in as the third link to really complete this effort..." As SCC staff moves forward into this silver anniversary year, there will be plenty of occasions to look back over the years, as well as to keep a sharp eye on the future. During the last year, SCC newest product offerings have included SC24's MasterMoney debit card and "PC Branch," Balagna said. More than 100 SCC member CUs now offer SC24's MasterMoney debit card to their members. Another 30 or 40 CUs plan to add PC Branch, SCC's home banking and electronic bill payment service introduced last year. "Our next major project that we'll have in place before June 30 is our lending origination and automation system for our branches," Balagna noted. "That will enable any member of our credit unions to walk into one of our shared branches and have our own shared branch staff be able to approve on the spot and close that credit union's loan..." That technology will be able to automate the credit scoring process, where each CU could have its own scoring mechanism, or a generic scoring mechanism to allow members to fill out an application at a shared branch. Then, once the information is entered by a shared branching service representative, there will be the capability to automatically dial up the credit report and bring that into the system. The score that is achieved will allow the loan to be approved if in a certain range, Balagna said. "If it doesn't fall in that range, then we can refer the member back to his or her own credit union," he said. In another recent development that will expand SCC's service, Michigan State University Federal Credit Union, a Michigan-based ATM deployer and card issuer, and SCC have reached an agreement in which MSUFCU will convert its ATM program support activity to SC24, officials said. This adds Michigan State University FCU's 70 or more ATMs to the SC24 network. "One thing is sure," said Kenneth H. Laubenstein, MSUFCU president/CEO, "MSUFCU members count on ATMs to handle their day-to-day transactions. Partnering with SCC is a way in which we can substantially improve ATM access to our members, particularly those in the Detroit-Metro area. Offering machines that members can access without cost is important. Consumers are busier than ever; convenient access to their funds is necessary." During the late `60s, the idea for a network of shared branches and ATMs came up as a reaction to predictions that there soon would be a "checkless, cashless society," Balagna recalls. "ATMs were just coming into existence then," Balagna explained. "And credit unions didn't even have branches at that point. We became the first CUSO in the country before that word ever was even used." Then, as the early `80s dawned, there was a need for a more efficient way of linking branches. "At that point, we asked (others) for help setting this up, but help wasn't ever received. So, we decided we'd build it on our own," Balagna said. SCC moved quickly into its role of "catalyst and consultant" for shared branching networks nationwide. Its earliest CUs were a core group that included Dearborn FCU, Detroit Teachers Credit Union, Credit Union ONE, Telcom Credit Union and Michigan Educational Credit Union. Today, SCC serves 240 member CUs. SCC's first shared branch opened 25 years ago in Riverview. Since then, 23 other offices have opened, 20 within the state of Michigan. Also, through an alliance with Encore Branch Services Corp., three more have opened in Virginia and Maryland. SCC now serves the needs of more than 3.5 million CU members, at CUs with combined assets exceeding $17 billion. It was as early as 1984 that SCC was able to link its ATMs into an early network. Another milestone was reached when SCC introduced its debit program about four years ago. As that program grew, members found themselves with "access to thousands of merchants around the world by using a debit card to access checking accounts as opposed to credit," Balagna said. "Right now, our off-line debit program is expanding at a dramatically higher pace than ATM volume. We're still seeing significant increases in ATM volume, but ATM debit, or the point of sale (POS) debit, I should say (MasterMoney debit program) is growing very quickly. We expect this year to authorize almost as many off-line debit transactions as we will on-line ATM transactions..." Service Centers Corporation was one of the first debit programs in the country to link on-line the authorization site of that POS debit. Up to that point, the use of debit around the country had basically involved off-line authorization and settlement. "The authorization comes through on-line through our switch, and we go into the credit union data base to make sure the member has the funds before authorizing the transaction," Balagna said. While funds are not immediately taken out of the account, risk still "is mitigated significantly." SCC staff are looking forward to celebrating the successes of their first 25 years at SCC's annual meeting May 23 and during other events such as the open house for a new branch planned for mid-February. SCC's efforts were spotlighted four years ago when CUNA & Affiliates chose SCC as recipients of the Herb Wegner Memorial Award. SCC was the "first organization" to get this award, said Balagna, who has served as SCC president/CEO since 1981. Today, as more offices open and increasing transactions are made by members (9.3 million last year, with almost 10 million projected for 2000), Balagna and others who had a hand in building SCC from the ground up are pleased with the results of their years of work and experimentation. "We knew early on that we had an exciting, unique concept!" Balagna said. -
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