New tech? Credit unions will have to wait

New tech? Credit unions will have to wait

EXCLUSIVE: UK-based Association of British Credit Unions (Abcul) has suspended its plans to migrate its member credit unions onto its new tech platform, Banking Technology understands.

The tech and ops modernisation project, known as Model Credit Union, is part of a broader Credit Union Expansion Project (CUEP), initated by the UK government’s Department of Work and Pensions (DWP) in 2014.

The overall programme has been valued at £38 million, with the technology portion believed to be around £8 million.

Abcul’s dedicated subsidiary, Cornerstone Mutual Services, has been carrying out the work. The plan was to bring together a range of facilities, including a new core banking system and a new mobile app – both provided by Fiserv – and migrate Abcul’s members onto this new shared platform.

Abcul has 200+ members, of which around 35 signed for the new platform. So far, just three managed to go live – East London Credit Union, RetailCURe and Voyager Alliance Credit Union.

In June this year, Mark Lyonette, chief executive of Abcul and Cornerstone, told Banking Technology the association had “confirmed schedule to roll out to a further 30 credit unions over the next 18 months”. He also said Abcul was making “good progress” on this.

However, Banking Technology understands the roll-out has now come to a halt.

Following the discussions with the DWP and Cornerstone’s board meeting held on 29 August, it has been agreed “to continue working with the DWP to develop plans for stabilising the three live credit unions – Voyager Alliance, East London and RetailCURe”, according to an Abcul letter to its members seen by Banking Technology.

“We will, however, be halting the migration of any further credit unions onto the platform until we have achieved this stabilisation,” it goes on to say.

It adds that the Cornersone and CUEP boards “remain committed to transformation and will continue to seek ways to enable all credit unions who wish to migrate to do so”.

There are no changes to either the Card Account Services or the Automated Lending Decision (ALD) solution provided by Cornerstone.

“We are continuing to work with the DWP to support credit unions that are live on the platform and remain committed to transformation,” was Lyonette’s response to Banking Technology’s enquiry on the subject.


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Comments
  • M Swallow 7 September, 2017 at 0936

    The problem abcul has is that this banking platform need/imperative was initially driven by the unilateral withdrawal by the Co-op Bank from providing the back office banking platform for the Credit Unions. The withdrawal was unexpected, and at short-notice. Their withdrawal meant a completely new platform was needed for credit unions. Abcul went off to develop this, but not using sufficient existing tools/software to minimize new software costs/risks. Cornerstone is deeply linked to Barclays which may be a source of the problem.
    The approach taken was always looking like it was heading for error404 choppy waters. A commercial unit should pick up the project, and sort it? But maybe they don’t see there being enough money available.

  • CU Supporter 7 September, 2017 at 1323

    Very little if anything to do with Co-op Bank withdrawal – this project was sponsored by DWP long before Co-op withdrew banking platform (and in any case ABCUL not providing new current account – despite buying a core banking platform?!?!). Agree Co-op withdrawal was unhelpful, but ABCUL had >18 months notice before Co-op closed the platform.

    Basic problem = ABCUL’s scandalous mismanagement of £38m CUEP project – taxpayers’ money by the way – that has not delivered on 99% of their promises to the DWP. And has delivered next to nothing to CUs looking to expand & grow.

    • Interested in CUS 12 September, 2017 at 2339

      How is it that this story not showing up in the national media? If you add the DWP and individual CU personnel costs to this…more than £38m has been lost on a project that missed its deadlines by years!

  • Neil Mathieson 8 September, 2017 at 0717

    I look at this deal 2yrs and was somewhat bemused by the vendor and buyer approach.

    In contrast, the Finnish co-operative movement is about to go live with a new 178 tenant ‘digital core’ solution from Estonia. Good planning, better tech, flexible vendor.

    Shame credit union members had to lose money for something outside their control

  • Barry 4 October, 2017 at 0957

    Looks like it is being wound up. What an absolute disaster for all involved and the taxpayer. Lyonette has a lot to answer for.

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