NZACU is cooperatively owned by 17 member credit unions, along with five associate members (other mutual organisations like building societies), and represents over 200,000 New Zealanders.
The IT team provides the full spectrum of back-office infrastructure systems as well as products and services on-sold by the NZACU’s members such as Eftpos and debit cards, and text banking. In other countries, these are often outsourced by individual credit unions to a variety of different business partners.
“It is a true cooperative. We are one of the envies of the credit union movement worldwide - we are one of only a few countries that has managed to collectively put all that together,” said Johns. "We are relatively big and a significant force in the financial services sector."
NZACU is the sixth largest in New Zealand by volume of transactions in its banking system, including Eftpos cards, MasterCard debit cards and ATMs. “We try to keep it very lean because that is very good for credit unions,” he said. “They have to compete with banks and they know they have to compete with the New Zealand market.
Read more: Z Energy teams up with Xero
“From an IT perspective, we have got multiple customers, multiple systems that we collectively put together.”
“We are responsible for ensuring the best value for money for our members,” he said. NZACU has one core banking platform, which is “whitelabelled”, this means the members use their own brands when using this platform.
While they do not provide all local desktop service, NZACU provides the wide area network for 85 sites that it bought collectively from Spark Digital (formerly Gen-i). This makes NZACU one of Spark Digital’s top 50 customers in New Zealand, and in essence, enabled them to build a private cloud for its members.
NZACU provides the back office IT functions for members, but Johns hesitates calling this a shared services model.
“I call it shared services plus,” he said. “If you think of pure shared services, it is more than a customer going to the vendor.”
From an IT perspective, we have got multiple customers, multiple systems that we collectively put together.
But NZACU provides more than that. Johns explained NZACU members have got access to every service that banks offer, except for credit cards.
“That is mainly philosophical; the credit unions help people manage money and provide ethical lending. They make sure they are not just giving money when people turn up at the door,” he said.
NZACU provides the internet banking platform for members. “It was set up based on our cooperative model, which was a common system that we can white label. You don’t see our logos.
“We are actually owned by the credit unions,” explained Johns. “We don’t tell them what to do, it is more about working with them to make sure we can provide them a service or product.”
An example is the mobile banking app, AccessMobile, which the organisation released in May. The app was downloaded 1,800 times in the first week without being advertised. It was among the first such app available on Apple iPad, as well as iPhone and Android phones and tablets. There are now over 8,000 downloads.
“Creating a mobile app is an expensive business,” he said. “[With] the cost involved in getting it done and all the various things you have got to do to get it out, like security, our members would struggle to do it on their own.”
“However, by creating scale and working cooperatively, we’ve rolled out a state-of-the-art mobile banking app to our member credit unions with 11 different brand ‘skins’, enabling them to deliver a personalised product to their members who are owners of their cooperative credit union.”
The AccessMobile app, which they developed with Finzsoft, is fully functional and allows the user to set up automatic payments.
“Unlike many on the market, it also has specific modes for mobile versus tablet so that it maximises the screen real estate for each device, and isn’t just a scaled up version on the larger screens,” said Johns.
Last year, NZACU also launched a collective Anti-Money Laundering (AML) system for its members, and a MasterCard debit card that features contactless payment technology. The association is the largest non-surcharge ATM provider – around 100 units - outside of the large banks. The others are ‘white labelled’ and carry the brands of the respective members.
Related: The next phase of mobility
Deane Johns and other finance executives discuss how the uptake of cloud services and rise of mobile devices are creating a 24x7 customer-driven environment. They share insights on how they are working through these rapid changes, while preparing for the next business technology trend.
Joining the cooperative movement
Johns joined NZACU three years ago following a broad range of insurance, IT and service delivery roles. He worked for 15 years for Royal Sun Alliance, starting as underwriter and claims settlements manager.
He rounded up his management experience by working for the vendor side, as program manager with Gen-i (now Spark Digital). He was responsible for a large team managing the ERP upgrade for a corporate.
He says this range of experience provided him a “business head” in contrast to an IT head.
“The technology and the machines do their thing, but it is understanding what you want them to deliver, for me that was quite important. What is it that you (the organisation) are trying to do? Ignore the hardware, the software all the stuff that sits on the background. What is it that you need to achieve in an organisation?”
He said that is why the IS team has mini-strategic plans.
“They are not about buying software, it is about business delivery. When we talk to our member credit unions and mutual building societies, they need to know how we can help them achieve their strategic plans, how they are able to do ethical lending, and get the loans out the door.
“That makes a difference, you have a vested interest in the organisation. In this case, the skill set you have to develop is that of cooperation,” he said
Johns said NZACU has a steering team made of up of the CEOs of credit unions.
We encourage our IT team to talk to managers and frontline staff.
“We talk through how we are doing it, why we are doing it, why it is going to help the business,” he said. We make sure we develop our own business as well – because we are a business in our own right, and expanding our scale of operations ultimately benefits our members in terms of volume discounts and product capabilities.”
“Primarily we are here for the members. It is a different type of model and a different type of thinking and also we run a very lean team.”
The NZACU IS team has some 30 members who run all the banking services and the daily banking reconciliation.
Johns said the IS team members at NZACU always go out and talk to the credit unions and mutual building societies as part of their induction program. He makes sure there is an ongoing programme for their staff to interact with the association members.
“We encourage our IT team to talk to managers and frontline staff,” he says. “Credit unions like it when we visit them and see what they are doing, and how they are going. They obviously want to see we are thinking of a strategy going forward, how are we going to support them, what new things are coming up?”
At the moment one of the focuses is on workflow, how to get rid of paper records, he said.
“At the end of the day it is not about machines and software. It is how that translates itself into being in front of what the business value you are going to provide the member.”
Making a difference
NZACU is a member of the World Council of Credit Unions. The US-headquartered organisation is founded on the belief all people have the right to affordable, reliable and accessible financial services.
“The credit union movement is big around people helping people,” said Johns.
“In developing nations, people are buying cows and chickens,” he said. “These are different from cars or holidays, or whatever we buy in the First World.”
Being part of WOCCU means they are helping these people as well, and gives a different dimension to his CIO role.
“They are buying stuff that makes [for] continued survival,” he said. “You are giving them the tools for setting up a business.”
Send news tips and comments to firstname.lastname@example.org
Follow Divina Paredes on Twitter: @divinap
Follow CIO New Zealand on Twitter:@cio_nz
Join the CIO New Zealand group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.