FUTURE PROOF:WHILE CREDIT unions were in the spotlight last week, with the publication of the long-awaited report of the Commission on Credit Unions, one small Irish company has been quietly building a thriving business in partnership with the credit union sector.

Progress Systems is a Dublin-based company that provides IT services to the credit union sector. Based in Park West, it employs 23 people directly.

The company is in expansionary mode – turnover has more than doubled over the past few years from €1.4 million to €2.9 million, and it is looking to hire at least three new staff members in the coming months.

Progress, which is owned by Leo McCarthy and Tom Owens, has it roots in Integrity, one of the earliest Irish computer companies, which provided IT services for a range of businesses and sectors, including credit unions.

In 2003, the company was expanding and diversifying, and two of its software employees – McCarthy and Owens – saw an opportunity to focus on the credit union side of the business. A management buyout of that part of the business followed and Progress Systems was born.

The first thing the owners did was invest in a new system. “We decided to rewrite our software in .net, the framework used by Microsoft,” explains McCarthy.

“The banks thought we were mad, having already paid out for the business, but we knew from our customers in the credit union that there was a demand for it.”

The upgrade was completed in 2008 at a cost of more than €1 million – with the two owners taking on significant personal financial risk.

Progress has grown from a company employing six or seven staff with 60 to 70 customers, to a business employing 23 people, and dealing with double that number of credit unions.

Unlike banks, which have their own IT departments, Irish credit unions in effect outsource their IT requirements. Progress’s software offers a full range of IT services for credit unions, from the mechanics involved in making a payment or dealing with payroll, to designing websites and developing processes that allow credit unions to file returns to the Financial Regulator.

The company also serves a wider consultancy function for credit unions, helping them to achieve efficiencies through system management, for example, or devising marketing strategies.

About 60 to 70 per cent of the company’s employees are former credit union staff. It also employs about four to five programmers, who work on constantly updating the system.

According to McCarthy, one of the reasons behind the success of the company is its constant dialogue with customers. “We sit down with our customers and find out what they need, and what is coming down the line for them.”

On signing a contract with a credit union, Progress also enters a maintenance contract with the customer, which requires it to be on call when needed. As a result Progress’s opening hours mirror those of credit unions, with the office open late on Thursdays, Fridays and Saturdays.

But what about the impact on the business of last week’s report on credit unions, which called for greater consolidation within the sector? Will this affect Progress’s core market? Owens is upbeat about the future.

“One thing the report called for was greater efficiencies in terms of technology for the sector. The credit union sector has already made huge strides in this area and we believe we can play a key role in driving further efficiencies.”

Progress is also expanding into the UK. Five years ago, it had five customers in the UK; now the figure is 32. Its next step is to open an office in Britain.

“The UK holds huge potential in that there is a large, untapped part of the market that don’t have bank accounts,” says McCarthy.

The fact that Progress is regulated by the UK financial services authority is a key advantage in building its customer base there, according to McCarthy. “We are dealing with extremely confidential information so security and privacy is hugely important.”

This week Progress was awarded ISO 27001, a data security certificate covering the company’s operations. It is the 52nd Irish company to receive it.

Despite the growth in revenue, the owners are not complacent about the future. “It’s a matter of keeping focused on what you’re doing, focusing on serving your customers in order to retain customers,” says McCarthy.

“We’re doing more business than we were doing last year. In the current competitive environment that’s a good thing.”