Q&A with CEO
What were the highlights for you in terms of CUA's achievements in FY17?
It’s been a busy year for CUA and I’m particularly pleased with the progress on the four strategic priorities we endorsed in March 2016:
We implemented Android Pay, Apple Pay and Samsung Pay in the past year, as well as the ability for new-to- CUA members to open our five most popular deposit products online or via mobile. In addition to digital initiatives, we’re investing in new branches, opening the first CUA Community Hub in Toowoomba in May to provide a shared space for banking and community.
We rolled out our first 12-week ‘design-thinking’ process to experiment, design, develop and test our new suite of offers for new parents planning a family, expecting a baby or raising children. Since launching the pilot in April, we’ve had 494 conversations, attracted 194 new members and promoted member loyalty by supporting members through an emotive and challenging life stage.
We refined our approach to focus on shared value and partnerships, rather than a purely philanthropic approach. As a result we awarded $70,000 to community organisations in the first round of our Mutual Good Community Grants program, we piloted our CUAngels silent membership to empower victims of domestic and family violence and our team devoted 539 days to volunteering in the community.
Inorganic and partnership opportunities:
We streamlined procurement and accounts payable services by establishing a new company, Mutual Marketplace, through a joint venture with People’s Choice Credit Union. This initiative will deliver scale benefits and efficiencies for both credit unions. We also leveraged innovation and collaboration opportunities with River City Labs in Queensland, nationally through Stone & Chalk and internationally through our collaboration agreement with global banking innovator Pivotus Ventures.
What can you tell us about the CUA Financial Results?
It has been a strong year for CUA, with asset growth of 6.6% and on the other side of the balance sheet, deposits are up 5.2%. We’ve seen record levels of personal loans, a standout CUA Health result of $7.51 million Net Profit after Tax (NPAT) and higher net interest income. CUA’s strong performance this year enabled us to lift our commitment to community to $2.28 million, while also achieving a healthy 8.1% improvement on CUA Group NPAT to $55.87 million. This strong financial position means we can continue delivering the digital and member experience improvements we’ve started, and it enables CUA to help even more Australians to buy their own home in the year ahead. I’m also pleased to report that 8,404 members took out a CUA credit card this year, following its launch in June 2016.
Can you explain CUA's 'Anywhere, Anytime' Digital Strategy and how this is benefiting members?
CUA is working on being available to members ‘anywhere, anytime’, through the channel of their choice. CUA’s digital channels allow us to build a stronger connection with our members, who are increasingly migrating to them. By the end of June, we had 144,463 digitally engaged members using online or mobile banking and 10,156 CUA members using one of our digital wallets. CUA must be an early adopter of digital banking improvements so we remain relevant to our members. Collaborating with international banking peers via Pivotus Ventures enables CUA to be first to market in Australia with digital initiatives that will bring a more personalised element to our digital interactions with members. Personalised service through our branches remains at the heart of what we do but we must adapt as CUA members increasingly move away from cash. ATM transactions by our members are down 8% in the past year and down 25% over the past three years.
Collaborating and Partnering with other organisations was a real focus for CUA this year. What outcomes are these relationships delivering?
Partnering with other organisations is a key focus for CUA. While we are small enough to be agile and are not weighed down by legacy systems, we aren’t big enough to do everything on our own. This is the benefit of our Mutual Marketplace joint venture, where we can gain greater efficiency and better outcomes through scale. Working with our payments provider Cuscal has enabled us to deliver members the benefits of a CUA credit card and our digital wallets, while we are also working with them to bring real-time payments to members through the New Payments Platform (NPP).
As the Principal Partner of the Brisbane Heat, we’ve lifted our profile and taken CUA to a new audience of potential members, as well as supporting grass-roots cricket initiatives run by the Queensland Cricket Association. In the community, our continuing support of organisations like Red Nose and the First Nations Foundation is a key part of how CUA is connecting with the community and contributing to positive social change.
Can you explain what activity CUA has been undertaking with government and industry around improving access to capital?
Access to capital is important to allow any business to continue to grow and to seize on emerging opportunities that may benefit members. But as a mutual, we rely on retained earnings for capital. Following on from the Senate Economics Committee Inquiry into Cooperatives, Mutuals and Member- Owned Firms in 2015, we’ve continued to work with our industry bodies such as the Business Council of Cooperatives and Mutuals (BCCM) and the Customer Owned Banking Association (COBA) during the past year to progress the case for regulatory and legislative change. CUA also participated in the independent review, led by Mr Greg Hammond. Securing improved access to capital will continue to be a priority for CUA.
CUA team members volunteering on Red Nose Day.
CUA members using Apple pay.
What will be the focus for CUA during the next 12 months?
CUA has two key priorities for the year ahead.
A number of significant projects will be completed in the year ahead, including our new mobile banking app and the launch of real-time payments (NPP). We are working on improvements to our CUA credit cards and our online loan origination system. This year, we will also start to realise the benefits of our international collaboration with Pivotus Ventures and look forward to bringing these innovations to our member .
Education is one of seven key ‘Co-operative Principles’. As a mutual, CUA must continue reaching out to members to educate them on the benefits of our digital offerings. We want our members to come with us on this digital journey. To support these activation activities, our Enterprise Data and Analytics Office, which we set up this year, will continue to bring the right focus and governance to our member data and further investment in privacy and security.
This is the way we do things around here. As an organisation, we must evolve how we work and be flexible enough to keep pace with the inevitable shift towards digital channels, while being guided by our CUA Purpose. We will keep investing in our people and lifting capability. This will give us the right skills and leadership within CUA to drive us forward, so we can leverage the digital opportunities and provide a quality member experience.