Credit Union Hub


  • By
  • | 6:00 p.m. December 7, 2007
  • | 2 Free Articles Remaining!
  • Entrepreneurs
  • Share

Credit Union Hub

financial services by Dave Szymanski | Tampa Bay Editor

Dave Serlo has been at the helm of PSCU Financial Services for 24 years, piloting the organization as it responds to changes in the credit union industry.

These are the converging trends for an industry: The number of credit unions is shrinking. But the number of credit union members is rising as the institutions broaden their appeal. And these customers want more from their financial institution.

Enter Dave Serlo, CEO of PSCU Financial Services, a St. Petersburg-based not-for-profit cooperative that offers an expanding array of services for credit unions. It is the nation's largest credit union service organization, with 550 member institutions.

Originally known as Payment Systems for Credit Unions, PSCU Financial Services was formed by credit unions to provide products and services to credit unions. Along with products, PSCU offers knowledge and experience that can help credit unions design and implement successful programs to drive credit card loan volume and build member loyalty with debit cards and bill-payment services.

It has three 24-hour call centers, in St. Petersburg, Phoenix and Detroit.

Serlo, 61, came to PSCU prepared. He joined the organization in 1983 as its first full-time employee from Washington, D.C., where he worked for 13 years for the National Credit Union Administration, a government agency that regulates credit unions.

A Pittsburgh native, Serlo credits his success as a CEO in large part to his education and experience teaching. To Serlo, great leaders are great teachers.

After college at Indiana University at Pennsylvania, Serlo taught high school. He went to graduate school and was hired by the National Credit Union Administration. He got his second master's degree from Loyola University in business education. He considered his classes in education vital to his success as a CEO.

"They taught me how to communicate to people," Serlo says. "Finding errors in accounting was easy. What helped me was how to teach them how not to do the error."

Drawing on teaching skills was especially important in dealing with small groups of people.

"So many people have tremendous credentials, but are zero when it comes to interpersonal relationships," he says. "I'd much rather have a good student, an effective communicator, with a good attitude, who knows collaboration. He'll run rings around a valedictorian. Any day. I've seen it happen so many times."

PSCU has grown to offer a range of services, including credit and debit cards. It also offers electronic bill payment, gift cards, call center services, lending services and branch services.

Next year it will unveil mobile banking services, allowing credit union customers the ability to get account information using their cellular telephones.

Mobile banking is expected to be popular especially with younger consumers who use cell phones regularly. The tech is being developed now. Data security is paramount. PSCU hopes to have a prototype product available for its annual meeting in April.

"We represent a scale that the individual credit union doesn't have," Serlo says. "It gives me the ability to acquire products and services at an economical price. Scale is a key ingredient."

PSCU is able to hire expert talent, such as an expert in risk management, or a call center manager. It can buy quality technology. In essence, it is functioning like 12-million-customer credit union that has the economic power to negotiate pricing and be more competitive.

For example, one service is the call centers, which provide lending services 24 hours a day, seven days a week. Someone can transact a loan at 2 a.m.

Strong competition

Its model, as a not-for-profit cooperative, owned by credit unions, contributed to its success, Serlo says, because it kept it motivated to help credit unions. Some of its competitors are giant, publicly held firms that offer some of the same services to credit unions, but serve banks, too.

"They have to deal with Wall Street analysts and stockholders," Serlo says. "They have a more distant relationship. In my arena, I have the fortunate ability to do what's in best interests of our owners. Stockholders just want a check."

The competitors vary by product and service and include financial services industry behemoths, such as credit card company VISA.

Jacksonville-based Fidelity National Information Services Inc. is a publicly traded leading provider of core processing for financial institutions, card issuer and transaction processing services, mortgage loan processing and mortgage-related information products and outsourcing services to financial institutions, retailers, mortgage lenders and real estate professionals.

FIS has processing and technology relationships with 35 of the top 50 global banks, including nine of the top 10. About half of all U.S. residential mortgages are processed using FIS software. FIS maintains a strong global presence, serving more than 7,800 financial institutions in more than 60 countries worldwide.

One competitor, Metavante, a $1.6 billion company with more than 8,600 financial institution customers, provides bill-payment services, including debit and pre-paid card services and offers banking and payments technologies worldwide.

"We are competing (with PSCU) to provide a complete suite of services to customers driven by use of the Internet," says Chip Swearngan, vice president of corporate communications for Metavante. That has led to the use of fewer checks, which continue to decline in use in America.

But besides offering cost-effective and varied services around the clock, PSCU sees itself as a "trusted partner" for credit unions, Serlo says. "We play a role in giving direction," he says.

Consolidation continues

Consolidation continues in the credit union industry. In 1970, there were 24,000 credit unions in America. Today, there are 8,500.

While Serlo sees more consumer growth, he also sees the number of credit unions shrinking from 8,500 to 5,500. About 350 a year have merged in the past four years.

About 85 million people belong to credit unions. In 10 years, Serlo expects that number to hit 100 million. The primary reason: Trust and consumer advocacy.

Many large companies have formed their own credit unions. But the trend has been to be much broader in their membership and open it up to the public.

"The trend is not to be single-dimensioned," Serlo says.

As federal regulations have become looser, credit unions have tried to serve larger geographic areas. For a fee based on the number of transactions at a credit union, PSCU tries to partner with these businesses by allowing them to outsource the risk and pursue growth. Last year, PSCU handled more than 12 million telephone calls

Credit unions can now offer almost all the products a bank - which has caused banks to fight back as credit unions do not have all the regulatory burdens that banks do. But new new customer demands have required new skill sets. There's also been an increase in the government regulation on data security.

Growth opportunities can be costly. That explains the mergers.

PSCU started in 1977. Five Florida credit unions - GTE, Suncoast Schools, Pinellas County Teachers and Publix Super Markets - started it because they wanted to offer credit cards to their employees. Credit unions can be very collaborative with each other to create scale to help lower costs and make business services more profitable.

As the years passed, more and more credit unions joined to benefit from that scale. And the services grew. National meetings began to offer education and networking.

In the coming years, Serlo wants PSCU to become a more dominant player in the industry.

"Our first obligation is to our 550 credit unions," he says. "Beyond the 550, we want to play a role in helping the industry."

For PSCU, that means having all of its products under one roof.

"Customers can call one number to address products," Serlo says. "We become their national branch. That's the grand slam home run. Being able to connect all those dots, all those products."

REVIEW SUMMARY

Company: PSCU Financial Services

Industry: Credit union services

Key: Respond to credit union industry trends for more services.

 

Latest News

Sponsored Content