NWCUA’s Dan Hein Visits Korean Credit Union Headquarters


Dan Hein, vice president of administration and finance for the Northwest Credit Union Association (NWCUA), spent a day in August meeting with representatives of the National Credit Union Federation of Korea (NACUFOK), the hub of the Korean credit union system. Hein, who was visiting Korea with his family, said the visit was essentially a first step, an opportunity to develop a friendship between NACUFOK and the NWCUA and to share knowledge about each of the organizations.

NACUFOK was established in 1964 and is currently the fifth-largest national credit union trade association or federation in the world, with approximately $42.8 billion in U.S. dollars, 5.86 million members, and 955 total credit unions as of 2011.

In many ways, the Korean credit union system resembles the U.S. credit union movement, with a mission founded on the same principles of cooperative finance that guide credit unions worldwide. Headquartered in the city of Daejeon in a skyscraper owned by the federation, NACUFOK is essentially Korea’s equivalent of the Credit Union National Association (CUNA), but instead of working with autonomous state and regional leagues and associations, NACUFOK has a number of regional branches serving credit unions on a more local level.

After taking a bullet train to Daejeon, Hein had lunch with NACUFOK Chairman and President Tae-jong Zhang, discussing the two countries’ credit union systems and general financial industries. From there, Hein and Zhang went to the NACUFOK building and headquarters, where they had coffee and exchanged gifts. Hein said the meeting went well, and that Zhang expressed interest in growing the relationship between NACUFOK and the NWCUA.

Hein’s next stop was with NACUFOK’s IT manager, who led him through the restricted-access server room. In the year 2000, NACUFOK developed and launched the Intra-Network system, which connected all of the country’s credit unions onto one core system. By comparison, CUNA’s John Lass recently estimated that 92 different core processors are currently being used by credit unions in the United States.

In 2008, NACUFOK also implemented a new IT financial system. Because of these efforts to unify the nation’s credit union operations, the server room Hein toured houses all of the servers that process all Korean credit union transactions, online banking services, and other IT-related activities. The room is organized such that the servers are grouped together based on their primary function.

From the server room, Hein visited the IT control room, which had the look and feel of a NASA control room. Rather than working in separate offices or cubicles, NACUFOK’s IT team works in an open environment in front of several large screens showing the list of outstanding items to be completed along with the status of all the IT operations.

“It was extremely impressive how organized and efficient the IT operations were,” Hein said. “The cooperative spirit truly was utilized.”

Hein then stopped by the mutual insurance business offices. Similar to CUNA Mutual Group in the U.S., NACUFOK offers insurance for group, personal and non-life—everything from auto insurance to life insurance. A banner hangs in the office that reads, “Go Together! For Tomorrow,” emphasizing the power of the cooperative.

Later in the afternoon, Hein met with NACUFOK’s planning and coordination department to discuss the U.S. credit union movement.

“They were very interested in the challenges that U.S. credit unions are facing and how they are working to best meet those challenges,” Hein said. “They also asked about the NWCUA and our role with credit unions and how we are helping the industry.”

Hein said the department was also interested in the U.S. credit union system structure, asking specifically about credit union taxation. In Korea, credit unions are not taxed, and even credit union members pay lower tax on interest income for certificates of deposit. Hein also learned about NACUFOK’s nationwide marketing and public relations efforts, a unified approach that has helped create more credit union brand awareness for each credit union.

The final visit was to an off-site training facility—also located in Daejon—where 7,130 staff and board members and 11,430 Korean credit union members trained in 2011. Built in 1981 with members’ contributions and the financial grant of MISEREO Foundation in Germany, the facility’s grounds include an outdoor soccer field used by NACUFOK staff and a tranquil park with a Koi pond intended to give students and faculty a place to relax and study. Near the front of the training facility is a statue of Sister Mary Gabriella, who on May 1, 1960, established Holy Family Credit Union, the first credit union in Korea.

The training center is home to a wide range of programs for credit union employees, and Hein said NACUFOK even offers a one-day course for credit union members. Course offerings vary from the Credit Union College Course and the MBA course to fund investment and IT technologies.

Inside the training center itself are a large auditorium, dining facilities, dormitories, offices for staff, an exercise facility, classrooms, and even a small museum. The facility’s dorm rooms house two to three students each, and the students sleep on a heated floor with a a Korean bedroll-style mattress called a “yo.” The grounds are also home to a large outdoor auditorium and an area where the training staff, which also does all the cooking, keeps its homemade “secret” Korean dishes in large sealed barrels.

Hein wrapped up his visit with a dinner “with the NACUFOK employees who showed me such great hospitality during my one-day visit and tour.”

“This was an experience I will never forget,” Hein said, “and the friendships made will last long into the future. I truly saw how strongly NACUFOK embodies the cooperative spirit, and with that spirit, they have been so successful in all of their endeavors. I would like to personally thank Brian Branch, the president and CEO of the World Council of Credit Unions; Boaz Park, the international program officer for NACUFOK; and many others for helping make this meeting possible.”

To learn more about NACUFOK, please click on the following link: http://cu.co.kr/english/index.html. The website is both in English and Korean, and expands on the information provided in this article.

Click here to view a slideshow of photos from Hein’s visit.

 

Questions or Concerns? Contact Matt Halvorson, Anthem Editor: mhalvorson@nwcua.org.

Posted in Compliance, NCUA.