Home' Trinidad and Tobago Guardian : October 29th 2015 Contents OCTOBER 29 • 2015 www.guardian.co.tt BUSINESS GUARDIAN
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tution in order for you to buy things then
there its a disconnect. Credit unions need to
think about technology and payment solutions
for members. The more technology a credit
union uses, the more attractive it is to young
people and that comes with membership
He also said the World Council of Credit
Unions "worries" about the sustainability of
small credit unions.
"In the United States, we see one merger
a day and credit unions are disappearing and
the institution is a larger one. So we must
ensure that small credit unions are sustainable.
Some credit unions are lean in their operations
and can develop things more quickly. This is
how the resources of the membership stays
within a community. Especially when you have
credit unions in that community and they are
in areas least profitable where the banks do
not want to go."
He said credit unions face competition from
banks as well as non-traditional competitors.
"Even Facebook is a financial institution as
they have taken up a few things that a tra-
ditional financial institution does. You can
send money via Facebook. We all thought
Apple was a computer company but now you
can pay using their app. Amazon.com provides
consumer services and financial services. Look
at Walmart, you can open an account there.
A lot of competition is coming not only from
banks and traditional sources but from other
places where they see an opportunity on profits.
As credit unions, we need to keep an eye," he
He said what credit unions need to do is
make sure they are a good alternative for young
people and attract them.
"Worldwide, we have 617 million people
who are credit union members and 57,000
credit unions in 57 countries. In order to grow
50 million more members we must show we
can offer an alternative."
Local financial industry
a tech boost
Economist Mariano Browne,
who also spoke on the panel,
said Coro repeated things that
Browne has been saying all
along about the local financial
industry but with little suc-
"The issue is that the financial structure
and business model is changing. Before banks
used to make money on the Fraction Reserve
System (FRS). I take more money from you
as a depositor and I lend it to deficit spenders,
people who borrow to spend. I charge and I
make money from the difference. But the reg-
ulations have been changing and emphasising
risk and risk management in the context of
putting aside reserves. We have had a series
of financial crises. So people who think that
we cannot have regulations in the financial
sector including credit unions are wrong," he
He outlined the size of the local financial
"Our financial community is very small
with eight commercial banks, 17 non-banks,
life insurance companies, 104 credit unions,
a couple home mortgage banks. So the credit
union movement accounts for three to four
per cent of the financial system with $250
million in assets," he said.
He referred to Coro s remarks about mod-
ernising technology to make payment struc-
tures more customer friendly.
"How many people in this room have bank
cards? We talk about co-operation but the
reality is that we do not. We have 104 credit
unions and eight banks. The banks account
for roughly 50 per cent to 60 per cent of the
system and I think much more than that. But
they have the majority of debit cards in cir-
culation. The credit unions have not accepted
technology as a radical driver forward. Part
of the problem is our heritage and where we
came from," he said.
He said the problems arise from the credit
union sector seeing itself as being small.
"Technology is ubiquitous and it is every-
where. It can give the credit union movement
far more power than it realises. Coro pointed
to the developed economies and to players
like Amazon and Kindle. There are opportu-
nities available to us if we choose to see them
as a movement and to buy it. We need to see
what can be achieved with the technology
that is available to us," he said.
He gave his experience as a banker.
"These are issues as CEO of a bank I had
to face. Linx in T&T does not have a future
and no offence to the bankers, but I would
have bought in to a system called Visa Debit
because in scope it is international. A lot of
the overhead and developmental costs will be
undertaken by someone else. These are the
lessons the credit union movement must learn,"
Dorwin Monzano, vice-pres-
ident on the boards of the
University of the West Indies
(UWI) Credit Union and the
T&T Credit Union Deposit
Insurance Fund Co-operative
Society Ltd, who also spoke at the forum, said
the credit union movement by the nature of
what they do is a "prime target" for money
launderers and other people who commit
financial fraud and legislation is needed to
safeguard the sector.
"It is not necessarily T&T alone, but this
is an international movement in that regulation
of the financial industry is critical in any econ-
omy and any society. Mariano Browne said if
we do not have regulations we are going down
the wrong road. But it is what type of reg-
ulation we have. In my opinion there are chal-
lenges within it. There are also good provisions
in it like selection of directors," he said.
He spoke about the credit union legislation
that the last government sought to introduce
to replace the Co-operative Societies Act which
is the main legislation which governs the credit
"Last year, we had a credit union bill intro-
duced into the Parliament, but as God had it
June came very quickly and the bill lapsed. A
lot of people in the credit union space breathed
a sigh of relief. There is time for us to regroup
and re-think and discuss the issues. The bot-
tom line to this legislation is that we need
enabling legislation. We do not need too much
restriction to keep us down. We have been in
existence for 65 years and this means we must
have been doing something right," he said.
In the last proposed bill, he said there were
increased restrictions in terms of the business
that the credit unions are allowed to conduct.
"The bill proposed to put the legislation
and all financial activity under the supervision
of the Central Bank by virtue of the Inspector
of Financial Institutions and not only credit
unions but secondary bodies carrying on the
activities of a credit union," he said.
He asked the credit union movement not
to "fight down" the legislation but to look a
the positive aspects of it.
"Let us make sure there are provisions that
will enable us to carry out our work and satisfy
the needs of our members because that is the
core existence of a credit union."
PHOTO: MARCUS GONSALES
PHOTO: MARCUS GONSALES
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