COBA 2024 - Sharpening the focus on customers

The recent Customer-Owned Banking Association (COBA) conference saw a renewed energy among Australia’s mutuals, as smaller lenders gathered to explore competitive strategies amidst increasing industry consolidation. With a sharper focus on ‘doing more with less’ and inspired by the event’s theme ‘Ignite the Future’, mutuals can lean into their advantages of agility, purpose, and community focus. By strategically augmenting capabilities with trusted partners, mutuals can challenge the major players—not through size but by staying true to their values and driving innovation from the ground up. 

Complexity at scale

The challenge for mutuals has been in adapting operating models that have traditionally favoured the Majors. Carving out clear space to better serve their community while supporting growth and advancing business objectives has created disharmony between business and purpose drivers.

The surface advantages of the larger lenders are lessened when contextualised against the operational complexities that come with size.It's here, in this carved out space that smaller lenders have the potential to be more agile, leveraging their simpler tech stack to adapt to innovation at a faster rate.

Regulatory Challenges

With a renewed focus on compliance in reaction to a post-GFC and Royal Commission environment, the smaller and customer-owned institutions have experienced a disproportionate burden to maintain compliance and respond to regulatory changes.

Limited resources impacting the efficacy of the change-management required to keep up to date creating inertia around the threat of non-compliance penalties.

Recent initiatives from Treasurer Jim Chalmers, through a review led by the Council of Financial Regulators (CFR) signal positive adjustments, as proportionate regulation becomes a priority for Australian regulators.

The role of purpose

Mutuals have a clear advantage with a purpose-driven business model that prioritises service to members and community. This is timely given reputational issues faced by many Majors with APRA and ACCC investigations. An engaged community is valuable, something to be leveraged as competition in the consumer lending market becomes tighter.

Purpose and even provenance to some degree, have increased value to a marketing-savvy audience who have a heightened filter for authenticity and the potential to boost trust through advocacy.

The challenge is to ensure that purpose remains relevant, resonating with consumers and connecting with an increasingly technology-driven market. This relationship is amplified with the expanding application of Ai, both generative and explainable, that has potential to create distance between businesses and their existing and potential consumers.

Technology as a differentiator

With composable banking as the goal, streamlined and cloud-based architectures offer greater agility for technology integration. Compared to unwieldy legacy systems and disparate technology architecture that can impact on the rate at which digital transformation is implemented.

Technology that has the ability to ingest multiple, credible data points for true data-driven decisioning, in real time, reduces business ‘cost to serve’ and improves customer experience.

Security and cyber-safety

Despite October’s reminder of Cyber Security Month, formal accreditations like SOC2 and ISO are now industry table stakes. Partners demand a high level of security and robust protocols that support a focus on business objectives while mitigating risk to reputational damage. And consumer confidence is equally fragile, especially within an industry entrusted to handle and process sensitive, personal, financial data.

To find out how Tiimely could help unlock your potential through capability, get in touch.

Tiimely is a platform technology company powering Australia's most innovative credit experiences.

We help our partners solve four key industry challenges:

• Efficiency and cost reduction

• Responsible and transparent process

• Underutilised and disparate data; and

• Providing next generation customer experiences

Tiimely’s proprietary platform – Xapii® - provides our partners with credit intelligence automation. Leveraging 7+ years of market-trained data models, Xapii enables automated, machine-guided decisioning. We specialise in automating contextual and actionable intelligence to improve and accelerate credit journeys, unifying and activating data from any source.

Since 2017, Tiimely has pioneered AI-powered financial services products, now trusted by two of Australia’s largest banks, ASX Top 100 companies, fintechs, brokers, and our in-house proving ground retail business, Tiimely Home. Tiimely is proud to have achieved BCorp accreditation in November, 2023.