On-Site Coverage: Mobile Banking, Student Lending Next CUSOs Poised for Growth
LAS VEGAS — CUSOs that offer mobile banking and student lending services are expected to be among the most sought after by credit unions.
Jay Johnson, executive vice president at Callahan & Associates, discussed how credit unions that have an investment in a CUSO have an edge over those that do not at a session Thursday during NACUSO's annual conference in Las Vegas.
Johnson said there are about 700 CUSOs in the industry, with 180 of them being multi-owned and the rest wholly owned. Financial services and investments make up the bulk of the offerings from multi-owned CUSOs while technology services are among the dominant ones coming from wholly owned CUSOs.
Johnson said those credit unions that are active in the CUSO network post higher member growth, have higer productivity and a stronger lending profile. The percentage of members with checking accounts at credit unions that have relationships at CUSOs indicated that their credit unions are their primary financial institution. Credit unions that use CUSOs have more accounts per member, Johnson pointed out.
In 2010, credit unions invested $2 billion in CUSOs, according to Callahan figures. Nearly 93% of of credit unions that use CUSOs have assets over the $1 billion mark. Nearly 70% in the $100 million to $250 million range work with CUSOs.
Johnson pointed to several CUSOs that have made inroads in providing solutions to credit unions that have in turn led to growth for both entities. Those that offer services such as information technology, mobile banking and student lending are also poised for growth, he said.