While technology alone won't bring about the demise of credit unions, it could prove a contributing factor to the sector's decline. According to IBIS World's senior industry analyst, Andrei Ivanov: "Credit unions are facing a lot of pressure and are disappearing. Technology is a contributing factor - but not the sole factor - associated with their decline."IBIS World's analysis shows that there were 114 credit unions and mutuals operating in 2009. Today there are 86 (APRA counts 85) credit unions, and IBIS World has "conservatively" forecast that figure to decline to 80 within five years as they struggle to compete with the banks.To sketch the differences between the sectors, Ivanov said that at September 2013 the banks had combined assets of $3.7 trillion; credit unions had $40 billion.But, he said, what is more important is the way the sector is structured. While loans and advances make up 64.6 per cent of banks' balance sheets, they represent 79 per cent of credit unions' balance sheets, making them far more reliant on mortgage lending. Their funding mix is also starkly different. For banks, deposits amount to 57.3 per cent of funding; for credit unions, the figure is 94 per cent. "Any type of attempt to attract deposits will have a negative effect on the credit unions," says Ivanov. The rise of online only banks and online only accounts, which rely on modern technology to be able to cut overheads and offer better interest rates, is putting a squeeze on credit unions, Ivanov said.He said the more advanced technical infrastructure that the banks have invested in, plus mobile applications that are only a recent add-on for credit unions (although KPMG claims 84 per cent of mutuals have mobile banking or mobile friendly websites), is challenging mutuals and credit unions. In addition, he maintains that few have access to the sort of sophisticated data analytics now being deployed by the banks to allow them to quickly roll out new products, and pricing, targeted at individual customers, or to cross sell products.It's not that there isn't sophisticated technology available for credit unions and mutuals, there is. The challenge, instead, is that these institutions can struggle to find the funds and the technical skills to match the DIY technology approach of the major banks.TAS Managed Services is one of three key providers of technology services which between them supply the technical needs of around 90 per cent of the credit union and mutual sector. The other two key service providers are Queensland-based TSWG Assistance, whose customers include RAMS Direct and Holiday Coast Credit Union, and Adelaide's Data Action, which provides a home-grown banking platform for about 28 organisations, including P&N Bank, Qantas Staff Credit Union and Credit Union SA.Ivanov said that, unlike the banks, which seek to use technology as a competitive differentiator, credit unions are far less competitive with one another or with the banking sector. He said that this made it possible for them to use similar technology platforms.Asked about the Australian Prudential Regulation