Mutual banks and credit unions are embracing technology initiatives to stay competitive with Australia’s largest financial institutions.
The Esso Employees Credit Union, which has 6000 members and an asset base of $300 million, sees the big banks “as our major competitors, not the other credit unions,” said Ron Cox, senior manager of member relations for the EECU, an industrial credit union that looks after ExxonMobil staff and family.
The EECU has been expanding its website and has recently released mobile apps for its members.
Bankmecu, which has 125,000 customers and assets of about $3 billion, does not believe its customers’ needs are different from the customers of the big banks, said Chris Newey, the bank’s general manager of corporate services.
However, the bank has a particular focus on giving customers greater control and convenience, and providing financial services online and over mobile devices is a key to that strategy, he said. “If we’re not offering digital services, we’re not competitive.”
One of bankmecu’s most recent tech initiatives is a mobile payments pilot using NFC stickers.
“You just have to be in [the digital] space ... because there’s an expectation across all of our customer base that they want convenience. If the bank down the road is offering convenience and we’re not, then we’re not being competitive.”
While EECU and similar financial institutions may not have the scale of Commonwealth Bank, National Australia Bank and other big companies, their executives believe that their smallness may give them an advantage.
The relatively small size of credit unions makes it easier for them to move quickly on new types of technology, said Cox.
Newey said bankmecu’s small size compared to the major banks is both an advantage and a disadvantage.
“We can be nimble because we are smaller,” he said. “The other side of the coin is we certainly don’t have the type of investment budget that a major bank would have.”
“It’s a balancing act,” he said. “Investing in technology is critical to the success of our budget, but we must invest in the right technology.”
Newey said bankmecu pays close attention to technology trends.
“We’re always constantly monitoring what’s happening out in the marketplace. In some cases, you have to be a fast follower and in other cases you can be a leader.”
Defence Bank CEO Jon Linehan has said he believes that mutual banks are in a position to move faster than the commercial giants in embracing technology, especially because they are less tied to the traditional branch system.
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