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Diekmann's CU Observations From Around The World

Some notes from around the world, or at least a world as large as the inside of the Ottawa Convention Center, where WOCCU recently held its World CU Conference:

 

* According to Brian Branch, CEO of the World Council of Credit Unions, there are now more than 56,000 CUs around the world, even if they aren't all called credit unions. Other names used include Islamic Investment and Finance Cos., Savings and Credit Cooperatives (SACCOs), Financial Co-op, Credit Cooperative, Cooperative Bank, Sicredit, Caisse Populaire, and others.

But whatever the name, it seems there is a commonality that can get any CU/co-op leader to begin cursing in their native tongue-and perhaps others. Branch noted the U.S. has no monopoly on overbearing and redundant rules and regs, with the chief aggravation for most credit union movements around the globe being "the burden of regulatory compliance."

Meanwhile, and again regardless of the name used to describe the business model, "We find in some markets increased recognition of the credit union brand. And, frankly, in some countries we find decreased recognition of the value of the credit union brand," Branch added.

 

* Any meeting where people are speaking English, French, Russian, Portuguese, Spanish and other languages always makes for a couple of "Lost In Translation" moments. Among them: when translating into English, one person described her country's credit unions as the "world's fifth most important credit union movement."

 

* Call it #GlobalWorry. It isn't just CUs in the U.S. that are worried about social media's impact. The subject showed up several times on the WOCCU agenda. But social media expert Charlene Li offered some comfort, observing, "It's not the technology, it's the relationships. So focus on the relationships, and the technology will follow. What does that have to do with credit unions? Credit unions have always been about the relationships. CUs exist to help their members."

 

* Eliane O'Shaughnessy, strategic advisor, with Quebec's Desjardins Group, said a 2012 study of growth conducted by her organization in concert with McKinsey found that cooperatives and private companies had seen relatively similar annualized growth rates between 2005-10.

"But the way cooperatives grow is different," said O'Shaughnessy. "There are three ways to grow: marketshare gain, portfolio momentum, and mergers and acquisitions. Cooperatives outperformed the market on marketshare gain, but trailed in portfolio momentum and M&A. They underperformed in portfolio momentum, in part, because co-ops focus on members' current needs rather than future needs."

O'Shaughnessy indicated Quebec's credit unions, or caisse populaires, are experiencing similar pressures as those in the United States: an aging population (the average Canadian is 37, the average Canadian CU member is 54); shrinking of membership in certain segments; half of the CEOs plan to retire in the next three years; and the number of CUs has shrunk from 420 to 350 over the last three years. "The big credit unions get bigger and the small get smaller."

The Desjardins/McKinsey study found the biggest obstacles to growth are: difficulty in attracting and retaining performing executives; lack of expertise to develop competitive/more sophisticated products; lack of expertise to meet expanded reg requirements; lack of scale ad ability to raise capital and absorb IT and reg costs; and lack of a common member experience.

"The one thing credit unions can do to overcome these barriers is to cooperative with other credit unions," O'Shaughnessy said.

 

* From Les Fantasy en Ruines Department: One person at the WOCCU meeting had been waxing romantically over how authentic and delicious the pastries and French bread were at the bakeries in Ottawa (French-speaking Quebec is just across the river from Ottawa).

And while this person was still all but singing a French tribute to gastronomy, we walked past a small delivery truck dropping off bread at one of those bakery/restaurants. The bread was in big bags, all marked Kirkland, which is the Costco house brand.

 

* Talked to a couple of British CU execs who were sharing that they recently had a loan request for 50 quid (about $75 U.S.D.) so the member could buy a coat. They made the loan, confident, they laughed, they could repossess it if need be. Regulators are regulators, after all.

 

* The new WOCCU board executive committee is: Chair Grzegorz Bierecki of Poland; 1st Vice Chair Anne Cochran, CEO of the Louisiana league; 2nd vice chair Daniel Burns of Canada; Treasurer Louise Petschler of Australia, and Secretary Patrick Jury, CEO of the Iowa league.

 

* The next WOCCU World CU Conference will be July 27-30, 2014 in Australia.

Frank J. Diekmann can be reached at fdiekmann@cujournal.com.

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