Establishing A Successful Business Model Leads to CUSO Success

Credit Union Service Organizations (CUSOs) were formed to become an extension of the credit union and provide added value to credit unions and their members by offering quality products and services. As member needs continue to grow and credit unions search for new sources of revenue, CUSOs must develop a plan of action that will lead to long-term success. Two CUSOs that have experienced great success have done so using two different organizational structures. CU*Answers in Michigan a multi-owned CUSO and Kinecta Financial & Insurance Services a wholly owned CUSO in California have set their sights high with unique goals and strategies for achieving success.

 
 

Credit Union Service Organizations (CUSOs) were formed to become an extension of the credit union and provide added value to credit unions and their members by offering quality products and services. As member needs continue to grow and credit unions search for new sources of revenue, CUSOs must develop a plan of action that will lead to long-term success. Two CUSOs that have experienced great success have done so using two different organizational structures. CU*Answers in Michigan a multi-owned CUSO and Kinecta Financial & Insurance Services a wholly owned CUSO in California have set their sights high with unique goals and strategies for achieving success.

CU* Answers formerly WESCO was formed in 1970 and was initially the idea of a single credit union that offered IT and data processing services to other credit unions to help reduce their IT costs. As technology needs expanded over the years the CUSO took a new shape and was molded into a cooperative in 1985. Owned by 56 credit unions, CU*Answers has become an organization with interests in sharing the risks and rewards of developing and implementing today's IT solutions.

As a cooperative, CU*Answers focus has remained consistent with that of other multi owned CUSOs and they have embraced the cooperative business model and used it as a key to success. According to Randy Karnes, CEO of CU*Answers, ''A cooperative business model should create pride in solutions for both the vendor and the credit union client, our reliance on the concepts of credit union equity, credit union cooperation, and a true partnership between the credit union's focus and CU*Answers technical capabilities results in data processing solutions that meet the objectives of both organizations''.

Kinecta Financial & Insurance Services formed in 1986 as a wholly owned subsidiary of Kinecta Federal Credit Union has built a reputation based on convenience, experience and personalized service. Offering a wide variety of insurance and investment services Kinecta Financial & Insurance Services puts their clients future ahead of anything else.

At NACUSO's Fall Leadership Roundtable held September 25-27, Kinecta Financial & Insurance Services received the 2003 CUSO of the Year Best Practices Recognition Award. This annual award recognizes one CUSO that has demonstrated a successful business model. When asked what this award meant, CUSO President Nader Moghaddam said, ''He and his staff felt humbled to earn the recognition and that Kinecta Financial & Insurance Services truly leveraged the power of the credit union. The award was a reflection of the hard work and integration of the credit union and CUSOs board and management.'' In addition to receiving this national award, Kinecta Financial & Insurance Services has also been a leader and advocate for setting national standards for benchmarking CUSO performance.

CU* Answers and Kinecta Financial & Insurance Services, while leaders in the credit union community are not the only CUSOs experiencing success. Their business models and their willingness to share information have had a positive impact on the growing CUSO industry, now with more than 750 CUSOs nationwide.

If you are interested in learning more about using a CUSO for IT solutions, establishing benchmarking standards for your CUSO and gaining further insight into CUSO operations, then we invite you to join us on October 9th as we look at ''Strategic Issues in CUSO Management''.

 

 

 

Oct. 6, 2003


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