In our technological world, it’s so easy to take things for granted. When a shiny new piece of tech comes out, we are all over it. The world is talking about it. It’s advertised everywhere. But we seldom think about the technology we use every day. The only time we think about it, is when we can’t use it for one reason or another, and we get flashbacks to life without it.
Technology in Financial Services
For example, card payments. A large portion of the world’s money is intangible because it’s stored electronically. This makes paying for products and services so much easier. Even easier now with things like contactless payments, Google Pay and Apple Pay. How many times have you swiped or tapped your plastic without even giving a thought to the technology behind it? The only time we really acknowledge the technology is when something goes wrong.
What happens if you lose your debit or credit card? You have to physically visit your bank, with photographic ID, and plan out how much cash you need until your new card comes. This is highly inconvenient, and only then do we realise how lucky we are to have such technology. This moment is fleeting, and once we get our new card, we don’t give the technology a second thought.
Electronic Funds Transfer (EFT)
This is the same with EFT. Can you remember what life was like without it?
Well, there was no online shopping for a start. Catalogue shopping existed, but consumers had to send cold hard cash or a cheque to order goods.
There were no debit cards, or internet banking either. If you wanted to check your balance or withdraw cash, you had to take your bank card to the nearest ATM and find out.
And Credit Union staff had to do a lot more manual work! Members had to come into branch, and physically hand over a cash or a cheque (or request to withdraw it). Staff had to manually count, recount, and store the cash, whilst physically writing out receipts for the lodgement or withdrawal. There was a lot of room for error, and reconciliation took hours.
EFT was a major game changer for Credit Unions. In 2007, Credit Unions were sponsored by BNPP to be granted access to the Irish clearing system. Later, they were granted access to SEPA clearing, allowing straight through EFT through BNPP. 2013 saw the introduction of CUSOP - a not-for-profit Credit Union-owned payments service provider, giving Credit Unions another alternative to BNPP.
These integrations meant that Credit Unions had the same payment options as banks, and introduced same-day clearing, making it easier than ever for members to turn to their Credit Union for financial management.
Credit Union back-end software is equipped to handle EFTs and digital payments. Time spent handling cash and cheques is drastically reduced, and they can focus on other services of the Credit Union, such as selling loans, or providing training to staff.
Beware of partial automation!
However, despite the software handling these EFTs and other payments, some solutions still aren’t fully automated. Some solutions require Credit Union staff to manually ‘press a button for their payments and files to be processed and reconciled. This needs to happen every day, so essentially there needs to be a staff member physically in the branch every single day - yes, even Christmas Day! Some solutions may seem like they’re automated to the Credit Union, but there may be a manual process happening with the supplier.
If you are currently analysing the market for a new backend solution, make sure to factor in whether automatic payments truly mean automatic. Our core Credit Union software, Scion automatically process incoming and outgoing files as soon as they receive them, or at least a couple of times a day. This eliminates the need for manual intervention or manual journals, ensuring that payments are continuously updated and reconciled.
If you’d like to arrange a call to discuss our core system, Scion, and how it can make your Credit Union more efficient, please get in touch via the form below.