Ireland’s largest credit union invests ‘seven-figure’ sum in IT

Ireland’s largest credit union is investing a “significant seven-figure” sum to give its members mobile and online banking services.

St Raphael's Garda credit union has signed up with Swiss banking technology provider Temenos to enhance the suite of services offered to members including allowing them to apply for loans on the new mobile and online services.

The credit union, with assets exceeding €400 million and 35,000 members, has been a client of Temenos since 2008 and this new technology offering will take nine months to come to customers.

Claire Byrne, the credit union's chief executive, said the investment is a "milestone" to provide members "with easy mobile and online access to our services and an even faster response to loan applications".

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This investment comes as the State seeks to restructure credit unions in an effort to underpin the stability and long-term viability of the sector in Ireland. Restructuring involves merging weaker and stronger credit unions, and if necessary providing a capital injection to make up any shortfall in the capital reserve requirements of the merged credit union. A Government scheme to restructure credit unions has been authorised by the European Commission.

Loan-to-asset ratio

An Oireachtas committee report reviewing the sector issued last November suggested credit unions had to engage in more long-term lending to compete against banks and raise their loan-to-asset ratio. At present, only 10 per cent of credit union loans can exceed 10 years and the committee suggested the movement's loan-to-asset ratio, currently at 26 per cent, should be boosted to between 40 and 50 per cent.

On competition with banks, Temenos's regional director for Europe, Steen Jensen, said the technology would help the credit union offer "best-in-class services that will compete with tier-one banks". Mr Jensen noted other clients in Ireland include Bank of Ireland and KBC.

Based in Geneva, Temenos has signed over 3,000 companies around the world, including 41 of the top 50 banks.