Credit Union Seminar Waves of Change Oceans of Opportunity

Credit Union Seminar Waves of Change Oceans of Opportunity Wednesday, y, 24th May y 2017

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Waves of Change g

1) Positive changes happening Positive changes happening 2)) Areas of concern  3) Regulatory comment

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Positive Changes g Happening pp g Lending growth • Sector wide ‐ up to 20%  • Appointing Development officers/head of lending/business development  teams  • More energy/new initiatives/events/momentum  • Detailed marketing/business development plans • Multi channel approaches  • Database development – electronic  • New loan products / innovation • Arrears down  Regulation review  • Long term lending – review criteria to be increased – probably tiered  • Investment guidelines ‐ Investment guidelines just out just out • MCASS New personal current account 

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Positive Changes g Happening pp g Member experience / operational response  Member experience / operational response • Continuing to attract new members  • Survey why opening accounts  • Follow up calls  ‐ p style and content  y • Handling calls – receptionist – stats – log  • Diarying forward to call again  g yp customer having best experience  g p • Tracking each entry point – • Staff training on not missing opportunity  • Loan turnaround time  • Loan underwriting policy – balanced  • Best customer experience     Online  • Apps  • Online transactions – 50% move away from cheques – efficiency  • Online applications   4

Positive Changes g Happening pp g  Reorganisation Correctly structured and effective management teams Correctly structured and effective management teams Pain being taken Having objective reviews done     Collaboration Agri Loan – Cultivate  Risk & Compliance  Branding  Other  Other  Mergers  Continuing to Happen Members getting the Benefit  Strategy focus  Viability pushing this Models being reviewed   Outsourcing  CB Review Concentrate on Core Activities Access Expertise Access Expertise 5

Areas of Concern  Viability   3 ‐ 5 year window to get loan book up  95 Credit Unions under €20m  Reported 51% of CU Reported 51% of CU’ss wont make an operating profit this year wont make an operating profit this year  Financial Projections    Increased Savings  Competition   Interest rates   Re‐inventing the Wheel   In effective Structures  and implementation plans   New personal current account/debit card – New personal current account/debit card – will it be too late  will it be too late  Mortgages   Fraud – controls ‐ governance  Mergers  upside not being achieved 6

Regulator g Comment  Gap between current culture & controls and those we expect to see – seeing ongoing weaknesses  in governance & Controls  Twin Tracks approach   Meeting your regulatory requirements  Meeting your regulatory requirements – governance & controls governance & controls  Develop Financial/Operational Strength & Capability to manage Transition to different   Business Models  Three specific areas commented on   Payment Accounts & Debit Cards  Longer Term Lending – Longer Term Lending Mortgages  Investment including Social Housing ‐ Paper  Focus On:  Core personal lending  Standards of Financial / Operational / R&C Management fit for purpose for Current Model

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Oceans of Opportunity pp y  Economy stronger/consumer spending   Bank branches closing   CU Ethos / Brand / Personal Service  Loan Book growth / Significant money to Lend  Loan Book growth / Significant money to Lend – Ptsb lending up 63% Ptsb lending up 63%  Online Services – Capturing the younger member / full banking offer   Huge employee development / change / opportunity H l d l t/ h / t it  Investment rates should rise!  Credit Unions collaborating / further mergers  Getting your Model right – exciting challenge 8

Key y areas for development..... p 1)

Board Effectiveness Board Effectiveness  €100m + CU’s being run by inexperienced Directors / Chairperson  Necessary business expertise and energy on board  Necessary business expertise and energy on board – Nom Com  Nom Com  Right Chair ‐ Train / Mentor this person ‐ Work at Board meetings & between  board meetings

 Focus on Strategy – Clear plan – get out of operational  Committees  Clear briefs / objectives / accountability  Risk, compliance & Audit Committees  Marketing / Business Development Committee M k ti / B i D l tC itt  Nominations committee g needs to be reorganised g  Evolving area – 9

Key y areas for development..... p

2) Management Team M tT Seeing huge gaps in Team – right structure  Seeing huge gaps in Team – right structure CEO with pet areas p Leading high performance teams  Training to sell  Delivering on the strategic Plan 10

Key y areas for development..... p 3)

Strategic Review/Plan Strategic Review/Plan  Day Out / Outside Person  Realistic Review / Honest assessment where you are at / Scoring  yourselves in each area  Viability  Collaboration & Mergers  Clear Actions / Deliverables / Accountability  Short / Concise /  Financial Projections   Survey – Survey – 66% no viability issue  66% no viability issue 11

Key y areas for development..... p 4)

Marketing & Business Development Plan Marketing & Business Development Plan  No detailed Plan / Analysis / Resources needed  Most of you doing significantly less than what you could be doing Most of you doing significantly less than what you could be doing  Analysis ‐ Existing borrowers / Members not borrowing / Not Members ??   Channels ‐ Social Media / Sponsorship / Community Events / Employers /  Advertisement/Radio / Flyers / Staff Selling

 Loan Products & Term of Loans  Databases  Outside expertise / Resources  Reporting / KPI’s / Continual review / /  Spend 

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Key y areas for development..... p 5) Member Services Member Services  Phone answering  Getting each entry channel right  In Branch  Online  Phone  Post  Customer Service Centres ‐ Customer Service Centres ‐ restructure  Selling / Converting the Opportunity  Loan Approval Turnaround Process   Automation processes / databases   Surveys   Measuring/reporting on the above  13

In Conclusion      

Still in transition  Much stronger place  Viability is end game – bl d are you viable  bl Delivering Excellent Service to Members G Grow the Loan Book th L B k Continue to Merge / Collaborate / Outsource  ‐ Joined up  Message to Members / Efficiencies / Beating the Banks Message to Members / Efficiencies / Beating the Banks  Key Areas for development  Regulator – Squeaky Clean Squeaky Clean  Regulator   Reach out / Trust / Get help

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Thank You! Thank You! 

Colm O’Grady Credit Union Partner Credit Union Partner  Phone:  090 6480600/087 8209158 Email:  [email protected]

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