About Compliance

CUCC is a central compliance point of contact for credit unions. There are increasingly onerous requirements on credit union boards to demonstrate compliance, satisfy regulatory obligations and keep up-to-date with continual regulatory changes.

Having the right tools on hand can help reduce the burden many boards and consequently compliance officers are facing.

The CUCC supports and provides credit unions with the tools necessary to meet their compliance obligations under the Credit Union Act, 1997 (as amended), PRA/FCA requirements and all other financial services legislation and supports credit union compliance officers in managing regulatory change and reducing the risk of non-compliance

The CUCC is an on-going subscription service which provides numerous supports to those officers responsible for compliance within the credit union.

These supports are provided by a team that not only has a strong legal and compliance background, but also extensive experience of working with credit union officers and voluntary assistants.

This unique blend of compliance knowledge and credit union know-how makes the new service a must have for credit union compliance officers and ensures the guidance and support provided to subscribing credit unions is professional, tailored and practical.

The Credit Union Compliance Centre is an annual subscription service for credit unions in Northern Ireland and the Republic of Ireland.

This service will support the compliance function, however it will not supplant compliance roles within the credit union. The annual subscription fee is €2,400 / £1,800 (plus VAT at 23%) which provides access to all CUCC services.

Benefits to subscribing credit unions include:

Access to all resources on www.cucc.ie
Free attendance at the quarterly Compliance Working Groups (four per annum in both the ROI and NI)
On-going advice and support from credit union compliance advisors
Access to compliance templates, guidelines and briefing documents
Monthly compliance updates
Guidance on the compliance statement (ROI)

Subscribing to the CUCC couldn’t be easier, just follow these four simple steps:

Email compliance@creditunion.ie to register your interest on behalf of the credit union.
A letter of engagement with attached terms of business will be sent to the Honorary Secretary to be signed by the Chair of the Board or other authorised officer.
Once the signed letter is returned, you will be asked to nominate a primary and secondary contact person.
The primary contact person will be issued with a unique identifier (username) and password – your credit union can now access the CUCC service.

Name	Role	Email
Sharon Farrell	Compliance Advisor	sfarrell@creditunion.ie
Joan Guy	Assistant Compliance Advisor	jguy@creditunion.ie

Factor	Description	Ranking
Credit Union Mergers and the Common Bond	Short-term While the level of mergers between credit unions has remained low (9 in the last 12 months according to PRA figures), it is possible that this number will increase over the course of 2017 / 2018. Urbanisation impacting on rural common bonds means some credit unions are losing-out on potential members. Credit unions may find opportunities to expand into under-serviced common bonds through the merger process.	10 –
Credit Union Mergers and the Common Bond	Long-term As for Q2, smaller standalone credit unions may find themselves at a competitive disadvantage if operating a common bond over-lapping with larger neighbouring credit unions created through a merger process. Where credit union members satisfy multiple common bonds, high-calibre potential borrowers are likely to gravitate to the larger credit unions with a wider range of services, higher levels of convenience and more competitive rates.	10 –

Factor	Description	Ranking
Social changes & consumer preferences	Short-term As previously indicated, millennials & generation Y present a key challenge for credit unions in how to become relevant to these consumer segments by delivering suitable products and services. The credit union strategy should consider the investment the main banks have undertaken and are continuing to undertake in developing their communication / advertisement channels on social media and also in their development of internet based loan application processes.	8 –
Social changes & consumer preferences	Long-term Millennials and generation Y have arrived as the core borrowing demographic of credit unions. Credit unions must attract this segment in delivering basic, convenient suitable products and services. This is a business priority in many credit unions. Failure to capture significant market share within these demographics will be harshly felt in credit unions finance in the long-term.	8 –

Factor	Description	Ranking
Competition in Financial Services	Short-term While credit union loans are up 4% year on year, loans to assets ratio is down due to the faster growth in savings. The high street pillar banks have indicated their intentions to target the credit union personal loan market and they have the resources to ensure quick loan decision turnaround times. They are investing heavily in high convenience service delivery and better relationship management for customers. They have the resources to ensure quick loan decision turnaround times in addition to competitive interest rates. The competition from the PCP market from car manufacturers / dealerships area continues to be of concern to credit union although credit unions are making good comparisons recently between credit union loans and PCP finance from car brands.	7 –
Competition in Financial Services	Long-term The introduction of more FinTech companies into the financial services market will result in increased competition in the lending and secondary financial services market for credit unions. High tech, low cost base and strategically agile – FinTech companies could pose stiff competition to traditional financial services institutions. Current and potential members who have established long-term borrowing relationships with their banks (driven by effective relationship management and key product availability) will be difficult to bring back to the credit union.	7 –

Factor	Description	Ranking
Economy	Short-term According to Dankse Bank’s quarterly report there is growing evidence that the Brexit uncertainty in conjunction with the political uncertainty referenced previously, is affecting consumer confidence. Rising inflation is also having a negative impact on consumer confidence. Commenting on the latest release of the index, Danske Bank Economist Conor Lambe, said: “Inflation in the UK has now reached there per cent, and we are forecasting that it will average around 2.7 per cent in 2017 and 2018. As a result, household purchasing power is likely to remain under some pressure. The squeeze on consumers is still, very much, a key factor in the outlook for the UK and Northern Ireland economies.” Economic growth has been mixed during 2017 – the weak sterling at present has provided a boost to total exports which would indicate an expectation that economic growth will become more balanced where it not for the Brexit uncertainties that remain.	6 –
Economy	Long-term The long term economic outlook remains unclear and will depend a lot on the Brexit negotiations and also the political situation in Northern Ireland. There is evidence that some businesses have reduced capital spending and are therefore reluctant to invest until the Brexit outcomes are a lot clearer. With the Brexit negotiations ongoing which may become contentious and protracted the long term economic outlook remains very uncertain and volatile. “The forecast slowdown in overall UK growth in 2018 is attributable to an overall downturn in business investment driven by continued uncertainty surrounding the negotiations to leave the EU. We also expect a softening of jobs growth and a squeeze on real household spending power from rising inflation, which could reach around 3% in 2018” David Armstrong, PWC Partner in Northern Ireland.	6 –

Factor	Description	Ranking
Brexit	Short-term The fourth round of negotiations took place in September and there are still major challenges to overcome. A position paper on Northern Ireland’s unique position was issued by the UK government in August which focused on the need to avoid a hard border with the Republic of Ireland and proposals around custom tariffs for small – medium sized business. The coming months are crucial for the negotiations and potential outcomes for both Northern Ireland and the Republic of Ireland. The longer the period of uncertainty remains, the more volatility Northern Ireland will experience in currency markets, investment, trade and confidence. The nature of any border with the Republic of Ireland remains of significant concern. For both north and south of Ireland, the harder the Brexit, the bigger the risks.	5 –
Brexit	Long-term It is very difficult to predict the long-term implications of Brexit for Northern Ireland. The negotiations that will take place over the coming months will hopefully give some insight into the long term impacts for the region. There are still significant challenges to overcome in the negotiations and with 25k – 30k commuters crossing the border there are big implications for all involved.	5 –

Factor	Description	Ranking
Financial Services Information Technology	Short-term Once again this continues to remain an ongoing short term priority for credit unions prioritising the enhancement of its IT capabilities in areas such as payment services, debit cards, online services, e-signatures, and internal analytics and operations systems. The ‘Wannacry’ incident in May 2017 resulted in over 200,000 victims and more than 300,000 computers infected during the cyber-attack. In addition to this, the functionality of current CU IT systems are now being challenged by up-stream regulatory requirements such as 4MLD and GDPR. A more risk-based approach to compliance will necessity greater automation, security and reporting functionality of existing systems.
	Long-term While Banks continue to invest in new technologies and improve existing infrastructure in order to compete with Fintech start-ups (Bank of Ireland intend on spending up to €225 million annually from capital over the next 4 years on its IT infrastructure), it is looking increasingly likely that Amazon, Google and Facebook will pose the greatest threat to the traditional financial services world in the coming years. They have the ability to gain access to a huge customer base and also have the capabilities of analysing and exploiting big data. Due to limited resources, insufficient scale and restrictions within the business model – credit unions are at risk of falling further behind relative to competing banks and other financial institutions in the development of their IT capabilities to support their business model. For those credit unions not investing in enhancing their IT capabilities – the long-term future of their business model is more uncertain.	1 –

Factor	Description	Ranking
Media coverage & public sentiment	Short-term Credit unions continue to benefit from negative public sentiment towards the banking sector, i.e. the CBI tracker mortgage rate examination. Public view of credit unions as trusted and people-oriented financial service providers continues evidenced by increased savings figures. Recent negative media coverage relating to credit unions (CBI F&P report, AML sanctions) has dented an otherwise positive public sentiment towards credit unions.	6 –
Media coverage & public sentiment	Long-term If more frequent negative press arises, due to the emergence of further compliance, viability and/or governance issues within credit unions, it could sway current public opinion as trusted financial institutions.	6 –

Factor	Description	Ranking
Financial Services Information Technology	Short-term This continues to remain an ongoing short term priority for credit unions prioritising the enhancement of its IT capabilities in areas such as payment services, debit cards, online services, e-signatures, internal analytics and operations systems. Data fraud or theft and cyber-attacks ranked number five and six in the top ten global risks in terms of likelihood of occurrence in the World Economic Forum’s 2017 Global Risks Report. According to a PWC survey, there were more instances of cybercrime in Ireland in 2016 (44%) compared to the global average (32%). The capital and operating costs of certain technologies are high and therefore the business case for investment requires ongoing careful consideration. For credit unions not investing in enhancing IT capabilities – exposure to cyber-attacks is lower, but vigilance should be maintained with special attention given to addressing the risks of aging IT infrastructure. Credit unions should reference the IT Risk Management & Cybersecurity for Financial Institutions guidelines issued by CBI for expectations in this area.	1 –
Financial Services Information Technology	Long-term The CBI through their supervisory work state that firms have insufficient awareness, understanding and prioritisation of IT and cybersecurity risks. IT systems and controls are not sufficiently robust and firms are not doing enough to minimise the potential impact of an IT failure or successful cyber-attack on their business. Less than half of Boards (41%) are requesting information on the cyber readiness of their organisation in spite to the fact that cybercrime is perceived as the highest risk to Irish businesses in the next 2 years (PWC survey). Due to limited resources, insufficient scale and restrictions within the business model – credit unions are at risk of falling further behind relative to competing banks and other financial institutions in the development of their IT capabilities to support their business model. Banks are continuing to invest in new technologies and improve existing infrastructure and they have the resources to do so. This continues to give these firms a significant edge over smaller competitors. For those credit unions not investing in enhancing their IT capabilities – the long-term future of their business model is more uncertain.	1 –