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S. Korean CUs collaborate on IT to expand growth
MADISON, Wis. (1/27/09)--South Korea's 994 credit unions began using a single, centralized information technology (IT) system at year-end 2008 to serve their combined five million members.
Participants in World Council of Credit Union’s (WOCCU) December visit to South Korea included, from left, CUNA Mutual Group’s Paul Treinen, National Credit Union Federation of Korea Training Center Director Kwangtaek Choi, WOCCU’s Dave Grace and Motorola Employees CU Kris Kim.
The unified approach to technology, a daunting proposition for many credit union movements, is the latest step in a collaborative approach that characterizes South Korea's credit unions, says the World Council of Credit Unions (WOCCU). “Credit unions have grown on the basis of co-existence, faith, honesty and trust for nearly half a century,” said Oh-man Kwon, president and chairman of the National Credit Union Federation of Korea (NACUFOK), the country's credit union trade association and central liquidity facility that houses the IT system. “We have made ceaseless efforts to improve the social and economic status of common people and Korea's middle class since the movement began in 1960.” The first credit unions migrated to the new IT system in early December during a visit from Dave Grace, WOCCU vice president of association services, and Kris Kim, vice president and controller for Motorola Employees CU (MECU), Schaumberg, Ill. Shared technology is just the latest collaborative effort that has helped South Korea's credit union movement grow, said Grace. “Credit unions in many countries are looking for ways to centralize operations and gain national brand recognition common within the banking industry without sacrificing local ownership and the member service touch,” Grace said. “South Korea has done that and is serving its members with great success.”
Common signage and bright colors identify South Korean credit union branches. (Photos provided by World Council of Credit Unions)
The most visible byproduct of the credit unions’ efforts is a unified marketing program that positions the cooperatives under one common brand. South Korean credit unions still operate as individual, member-driven financial cooperatives, but their position in the markets they serve rival those of the largest banks. With common signage and similar products and services, the credit unions maintain a distinct member-service approach. Credit union collaboration helps the institutions to capture greater market share without sacrificing their traditional “personal touch,” Grace said. South Korea's credit union movement, which will celebrate its 50th anniversary in 2010, has grown to serve 13.5% of the country's population. The country ranks third in size of membership (five million), after the U.S. (90 million members) and Canada (10.9 million members), according to WOCCU's 2007 Statistical Report. The growth can be credited both to the nature of the South Korean family and the credit union movement's collaborative efforts, Kim said. “Koreans are very family-oriented,” said Kim, who was born in South Korea in 1959 and emigrated to the U.S. in 1972. “If the father joins the credit union, chances are the entire clan will follow suit. Once they're members, Koreans are not likely to change institutions.” South Korean credit unions have followed a similar unified approach in their development, which will give the movement strength and reach that otherwise would not be available. Kim added that credit union strength will only increase now that all institutions operate from the same centralized IT location. "Each individual credit union operates almost like a service center that's part of the larger credit union system,” Kim explained. “The movement has gained tremendous operational and strategic efficiency through continued collaboration. U.S. credit unions may be too individualistic to ever cooperate at such a high level, but I think there are components we could adopt from the Korean model.”
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