COLUMBIA, S.C. – Barbara Argo's credit union offers Internet banking, online loan applications, credit cards and ATM access. That's with a small handful of workers, including herself as president of the Cal Poly FCU, an $8 million, 3,500-member organization on the campus of Cal Poly-Pomona University in suburban Los Angeles. Cal Poly FCU ( has learned what others also are capitalizing on: the fact that size does not have to limit services. In fact, technology – as it becomes relatively less expensive and exponentially more robust – can be a real equalizer. Networking, on computers and between people, is the key. "We've been able to do it by partnering," Argo says. Working through Iowa-based PSI Premier Systems' packaging deals, Cal Poly FCU spends about $500 a month for ULTRADATA online banking, staying connected through a frame-relay system that can change phone lines if one goes down. For another $100 a month, the credit union's Web site is hosted by CUNA, which also provided the templates for Argo to build and update the site herself and other ready-made forms for online loan applications. Argo and her staff download two or three loan applications a day and then process them the old-fashioned way, by hand. But she hopes to soon implement online approval and other capabilities such as wireless banking and electronic bill paying. "It takes some research. I watch the big boys, what they are doing, where they're taking losses, which software packages really work the best. We've got a lot of bigger players I can learn from, and I have a lot of friends I can talk to," she says. A little help from their friends Those friends include the California Credit Union League (, which works to provide technology to its smallest members through donations and grants. "We had a credit union where a monitor started smoking and then burned up all but one station. We put out a request and got equipment donated to get them going again," says Kim Bannan, the CCUL's vice president of credit union development and research and information. The CCUL also provides grants of up to $4,000 through its Shapiro Group/The Golden 1 Technology Grant Program. The money has been used for everything from setting up home banking to acquiring a first computer. The Shapiro Group – a networking and self-help effort of the CCUL – comprises the CCUL membership's smallest half. Right now, the cutoff for the 252 members is at about $20 million in assets. "Within this broad range, you can't really make sweeping statements. There are full-service credit unions and some still using paper ledgers and calculating interest by hand," Bannan says. "That's not a criticism," she adds. "Their members love them. They have a nice little niche and they're very effective at serving their membership." Life in the niches Diana Okabayashi knows that niche well. She's board president of the Arizona Japanese-American Citizens League Credit Union, a state-chartered CU occupying a house given to it by the citizens league in the Phoenix suburb of Glendale. The tiny credit union has about 250 members (representing essentially about 80 families, Okabayashi says) and about $1.2 million in assets. It has one part-time employee and only evening hours. The credit union offers share accounts, savings certificates and auto, home equity and other loans. It doesn't attempt to compete with big credit unions or banks, because the members don't see it as their primary financial institution, Okabayashi says. She says that may change as the membership continues becoming younger and more tech-savvy. And if it does, the Arizona JACL CU will be ready. It recently became the first application-service provider (ASP) client of Computer Consultants Corp. (, and now runs its core processing through an Internet connection with a server at the Utah-based provider of data services to more than 600 small credit unions. Hugh Butler, CCC's founder and CEO, says connectivity systems like his company's Mercury packages along with the availability of inexpensive yet powerful PC's and servers, means credit unions of any size "can make their own decision about what technology they want to offer." "The costs are not tremendously high. The level of knowledge needed is not impossibly distant," he says. While acquiring technological expertise in-house, much less hiring and keeping good IT staff, is a challenge for the small credit unions, ASP and middleware solutions (along with the growing adoption of open-architecture systems) allow even the smallest organization can offer the best-of-breed in customer-service solutions. "At one time, small credit unions had no prayer of getting their hands on great technology, and no say either. This is a real paradigm shift," Butler says. The ability to offer what members want in service technology while maintaining the personal touch can position the small credit union well, observers and participants in this sea change say. Member interest is what's got Nick Kessenich in the process of creating Internet banking for the 2,400 or so members of $7 million Members First Credit Union in Madison, Wis. "Home banking is getting to be a necessity," says Kessenich, president and one of four full-time employees at Members First. For about $500 a month, his credit union will be offering the service through Worldwide Interactive out of Florida. Kessenich is working with several other small credit unions in the area to create the service, and also credits the willingness of the larger credit unions in Madison to work with his small organization with much of its ability to offer its members what they want and need. That included piggybacking share-draft services until he had enough accounts to bring it in-house. "The big credit unions in this city have always been there to help us, no questions asked," Kessenich says. Steve Goldberg, CUNA Mutual's vice president for small credit union development, agrees that small credit unions don't have to think small. But he does advise their leadership to concentrate on their core competency – "the care and feeding of members." CUNA Mutual offers a Web site – – that's generating about a thousand visits a month, and is attempting to build a community around it, one that will allow small credit unions to interact with each other for everyone's benefit. Goldberg also is continually updating his own presentation on best practices in technology for small credit unions. He has these points to offer. "Seek a mentor." Find someone in the larger credit union community who has been through the technology maze and learn from him or her. "Approach this the way consumers do." Use trusted providers. Let them provide the technology and expertise. Turnkey packages are particularly valuable. Terry Treadwell, managing director of the CUES Tech Port advisory service (, says size can be defined in a different way. "Share with me an unconventional moment while I suggest that `small' not be tied to asset size at all, but rather to the sophistication of a credit union's technology and business practices," she says. Treadwell sees "technologically small" credit unions following four general patterns: *Not taking the time to learn what members want to do online. *Having no structured technology planning, vendor selection or implementation processes. *Investing little time understanding e-commerce capabilities and strategies of the competition. *Being unwilling to "step outside the box" to network in the industry to develop affordable, workable technology solutions with available resources. Treadwell warns that CU's falling into these patterns risk losing members and even eventually withering away. That's not as likely to happen to the smaller organization that embraces evolving member-service technology, she says. "However, the challenge for small credit unions will be striking the right alliances and building a tech-savvy work force on a shoestring budget," she concludes. -


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