What is a Credit Union Service Organization?

Proven to be a tangible enhancement to credit unions and their members for more than 50 years, Credit Union Service Organizations (CUSO) are a corporate entity that is owned by either federally chartered, federally-insured or state-chartered credit unions. CUSOs provide credit unions with ideas to spur innovation, increase efficiencies through specialization and gain economies of scale. CUSOs leverage the power of collaboration that already exist within the industry to offer several advantages including: 

  1. Economies of Scale

Economies of scale are reached when an organization produces goods and services on a larger scale, while at the same time lowering their average investment costs. CUSOs achieve economies of scale by producing goods and services for several credit unions rather than having a single credit union try to replicate the same service or benefit. By utilizing the power of collaboration, CUSOs can specialize in a given product or service, enabling them to offer higher-value products and services at lower cost. 

  1. Competitive Advantage

CUSOs offer credit unions the opportunity to stay competitive by improving efficiencies and a wider array of member offerings that would otherwise be unobtainable without collaboration. CUSOs help credit unions scale up and increase market power in addition to other resources like capital and staff that far exceed their individual sizes. Here’s an example: a data warehouse takes three years to build and has an initial cost of $500,000, with an additional cost of $150,000 to support. With a big data and analytics CUSO, however, credit unions can install a data warehouse for less than $50,000 and only $60,000 a year in support. 

  1. For Credit Unions By Credit Unions

CUSOs are themselves credit unions, so it’s in their best interest to do what is best for credit unions. Rather than focusing solely on profit, CUSOs also place importance on the overall well-being of credit unions and their members. Credit unions, not shareholders, control the CUSO’s product development journey, and it’s the CUSO that delivers on the roadmap by leveraging the expertise of credit union executives. Using ideas from the best and brightest minds in the industry ensures common practices are shared, resulting in top products and superior services. 

  1. The Credit Union Movement

CUSOs are, by nature, focused on the overall financial health of members and the credit union movement, overall. Employing a CUSO ensures that capital investment stays in the credit union movement and reallocated to credit unions and their members. CUSOs invest in financial technologies (fintech) that ensure the long-term viability of the credit union industry.

CUSOs are formed for any number of reasons. They can provide pathways for innovation and creativity that wouldn’t typically occur within the framework of a credit union. They offer a revenue stream for credit unions that wouldn’t be available within the confines of a credit union. They can reduce services costs acquired within the traditional credit union. Some CUSOs accomplish all three functions. As a collective, these outcomes are the result of collaboration and cooperative spirit that is inherent in the credit union industry.

Collaborating in CUSOs allows credit unions to capitalize on these outcomes and provide financially healthy member services.They provide the ability to offer better and more affordable service, as well as services credit unions may not be able to provide. For example, not all credit unions have the capital to gain expertise to originate business loans. If several credit unions pool their individual resources, they will be able to afford to hire the proper resources and provide a valuable service to their memberships. 

Why Does QCash Financial Do What We Do?

Credit unions are in danger of missing out on an important trend in consumer demand: the expectations that businesses provide value, both to the individual and the broader communities in which they are located. By enabling solutions like CUSOs that support the customer mission and margin, credit unions can capture new market segments and deepen the penetration of existing segments. QCash Financial has accomplished this by offering our digital small dollar loan solution that enables credit unions to re-capture a market by providing instant liquidity.

QCash Financial helps individuals and families to improve and achieve financial stability, which then leads to long-term financial health. We accomplish this by delivering access to a suite of cash management and supporting solutions that combines relationship-based data analytics, technology and financial solutions. 

Financial health is made up of three core elements:

  1. Smooth and effective management of everyday financial life.
  2. Resilience in the face of inevitable ups and downs.
  3. Capacity to seize opportunities that will lead to financial security and mobility over time.

If your credit union wishes to retain members and foster brand loyalty by offering responsible and immediate short-term credit, our white label, fully configurable digital small dollar loan platform approves members in just 60 seconds with no credit check required. Our relationship-based underwriting engine employs data analytics to take the members’ 360-degree profile into consideration in making loan decisions. “In the moment” loans are an important component of today’s lending practices! 
For more info on QCash Financial and our digital small dollar loan program, visit https://qcashfinancial.com/solutions!

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