An upgrade to their core banking system and delivery of the first Mastercard open-loop prepaid are among the major projects recently undertaken by CIO Deane Johns and his team at Co-op Money NZ.

He says the core banking upgrade project evolved into a multi-phase programme, known as Programme Gear3, which covers seamless implementation of Oracle Flexcube into numerous non-core systems and channels.

“In August last year, we successfully delivered the Oracle Tier 1 core banking system, Flexcube, to our pilot credit union, ACU, a Māori financial institution. This completed phase I of the programme.

Not only does the Tier 1 core banking system underpin our four-pillar digital strategy of ‘content’, ‘data & analytics’, ‘experience’ and ‘omni-channel’, he says, this technology programme also enables our member credit unions to enrich customer offerings in the market and provide healthy competition in the industry dominated by the four large Australian owned banks, and other financial institutions, fintechs and non-bank deposit takers in New Zealand.

“The programme aims to modernise our credit union system from the inside out and it is the biggest technology and business transformation programme for both our organisation as well as our Member credit unions since they were formed,” says Johns.

“The impact of the project was huge as it went from a bespoke system to a future-proof Tier 1 system.”

Johns explains the current core banking system, FACTS, was originally purchased from an organisation called Ultra Data and has been modified in-house for the past 26 years to suit their member organisations’ changing needs.

“One of the operational challenges was to meet our credit union needs with a Tier 1 future-proof system within a limited budget. To overcome this, an Oracle Purchasing Group, which is made up of Member credit unions, was formed to gather funds for the project, prior to the start of the project,” says Johns.

“Our new core banking platform, Oracle Flexcube, has 3,000 APIs and these APIs are key to cost efficient collaboration with existing and upcoming fintech companies.

“Not only does Oracle Flexcube allow us leverage this investment to build the next stages of digitalisation including online card management and pinning, improved online loan origination and better mobile services, it also empowers our Member credit unions and Co-op Money NZ to improve our responsiveness and time to market.

“This is history making for both ACU, Co-op Money NZ and the credit union movement in New Zealand. There is intense industry interest in this programme whenever I present at industry events in the country and overseas.

Working with fintechs

Johns was also a project sponsor of Activata, the first Mastercard open-loop prepaid gift card, which Co-op Money NZ delivered on time and on budget.

“Via Co-op Money NZ’s Mastercard Principal Licence, I led my team to enable, build, help develop and issue the gift card, called ‘Bonfire’, to New Zealand and to enter the market that has only one other competitor.

“In this business partnership, Co-op Money NZ, as a card issuer, has several main commercial commitments including switching card traffic between merchants and Activata and passing on Mastercard fees and interchange revenue to Activata.

Activata is a card activator and its main commercial commitments include card distribution, marketing and sales, and managing the card product and card balances including customer enquiries.

“As a project sponsor, I oversaw the entire project and appointed personnel across all areas of the project, from payments, banking operations, testing to project team members.”

Fintech companies, such as Activata, are entering the market every day and it is essential to have the ability to create an agile platform to respond to the changing market and to enable collaboration with these new players in a cost efficient way, he says. “Our card processing platforms enable this.”

“The Activata project is very unique because it allows a Mastercard prepaid gift card to enter a market that currently has one player i.e. no competition. Not only does it provide an alternative choice for gift card buyers and customers in New Zealand, it also provides healthy competition in the market that it lacked. Additional functionality of the card also means that their customers can use the card for online purchases.

Johns says Co-op Money NZ also continues to expand its ATM network, and is now the largest ATM switch provider in the country.

“With around 70 Member credit union ATMs and around 900 third party business partner ATMs, we collectively switch approximately 30 per cent of New Zealand ATM fleet in the country.”

He says the scale of operations is mutually beneficial to their Member credit unions and third party business partners, and is aligned to their strategic goals.

Johns is a member of the executive team and involved in all level of strategic planning and decision making in the organisation.

In addition, the executive team has an annual strategic planning workshop that considers inputs from Co-op Money NZ Board, the Member organisations and their Boards. This provides a fundamental understanding of stakeholders, their situation, their IT department and their IT needs, which in turn brings better and informed suggestions, discussion and decision making to current, upcoming projects and innovation he says.

Co-op Money NZ has formed a Project Board made up of key senior staff, to cultivate the organisation’s culture and performance through strong leadership.

He says the Project Board have four key important roles: tracking and monitoring the progress of projects identified on the strategic roadmaps, the use of business understanding to add value towards successful completion of projects, improvement to our process and systems to enhance our overall performance and gauge the culture of the organisation. This includes areas such as suggesting and discussing opportunities to build our culture and drive performance to the next level, and as senior leadership team removing blockages to achieve our overall strategic goals!
Johns is the IT lead in the group, and ensures that the technology division delivers a consistent message about their projects to the staff.

“Staff engagement is one of the top priorities of the organisation and my team,” he says. All of his staff are invited to a monthly business update meeting, where representatives from different departments present their scorecards and explain to everyone their top projects, performance and highlights. 

“The key lesson in my career has been that delivering the technology solutions into the business is not about the technology or the infrastructure that is just the enabler – it is about business, how you benefit our Members and customers in providing them a reason to use our services. Using the technology in a correct way to gain business advantage. The business processes behind this are the key. Digitising a bad process may make it go a bit faster but is still a bad process.

“So challenge the process; why is it needed? What value is it to the member/customer? Manual processes are still OK if they make sense, don’t try to computerise everything,” says Johns.

“These learnings are applied in delivering and being involved from early stage in discussions with members and new customers on what can be achieved. This makes the expectations on the delivery real and there will be no disappointment.”