CEO Q&A: Kevin Johnson, Credit Union Development Association (CUDA)

Kevin Johnson, CEO, Credit Union Development Association (CUDA)

Kevin Johnson, CEO of the Credit Union Development Union (CUDA), takes on the CEO Q&A, where he mentions how the development of all Credit Unions across the country is integral for local communities as well as Ireland as a financial whole.

Q. What are your main priorities and goals in your role?

There are two key areas. Firstly, ensuring that Credit Unions have legislation and regulations that allow them maximum flexibility in deciding, for themselves, exactly how they will prudently serve their members. Secondly, to support credit unions in the design and implementation of a higher value member experience. There is a lot of work to be done to ensure that the fantastic growth we have experienced in 2017 continues and to facilitate the delivery of services that members have been demanding for some time.

Q. What are your biggest challenges as CEO?

Appreciating the diversity of opportunities in this heterogeneous sector; the principal challenge is in identifying those that deliver most value today, while building the competencies to convince rule-makers to enhance what Credit Unions will be permitted to do for society in the future.

Q. How do you keep your team/staff motivated?

We are owned by a group of Credit Unions and are united in our desire to support them in delivering for members. Collaborating and moving at pace can be a challenge, but when a team has a shared vision of making the lives of Credit Union members, their families and their communities better, the sense of ownership in this goal keeps us all motivated.

Q. What are the challenges facing your industry going forward?

Scale has been cited as a big issue for Credit Unions. While this issue has partially been overcome following almost 100 mergers in the sector, most Credit Unions still aren’t big enough to develop their own unique products and marketing campaigns, so they need to collaborate in order to evolve and remain viable.

To combine growth, independence and economies of scale, the not-for-profit Solution Centre was established in 2016. This has become a hothouse unit for developing specialist products, supports and solutions. With 48 of the larger and more progressive Credit Unions already signed up, the real challenge lies in sticking to the vision of continuing as consumer-owned co-operatives, whose primary business is to provide a competitive return on the savings of their members – by using those savings to make convenient, affordable member loans. The Solution Centre is a mirror image of its namesake in Canada, a country where Credit Unions have thrived by offering very competitive mortgages, loans, business finance, current accounts and investment options.

Q. What new trends are emerging in your industry?

While it has always been a co-operative movement, Credit Unions are now working together more than ever and are sharing resources to develop products and services. This has been largely facilitated by the Solution Centre, through which several Credit Unions throughout the country have embarked on ambitious business transformation programmes.

Q. Are there any major changes you would like to see in your sector?

Yes, principally we would like to see amendments to the current regulatory rules that would enable those Credit Unions that have the financial sophistication and technical expertise to compete directly with banks on business and mortgage lending and a range of other services.

We would also like Credit Unions to be allowed to come together and lend to social and affordable housing projects.

Q. As an employer are you finding any skills gaps in the market?

Not particularly. If anything we have found that the talent Ireland has to offer is second to none.

In 2018 we will continue to embrace FinTech and deliver unique solutions to enable Credit Unions to become the dominant provider of credit in most towns and cities across the country.

Q. How did your strategy develop in the context of the banking crisis and economic crisis?

The banking crisis resulted in Credit Union members suffering a serious decline in their economic well-being, and subsequently Credit Unions experienced falling loan volumes and higher than normal loan arrears. But thankfully that trend has reversed. Unlike the banks, credit unions have not cost the State billions in rescue funds and this helps to explain why they hold such a unique position – they have loyal members, a trusted brand, local knowledge and a positive local impact on their community.

Q. How will Brexit affect you, or have you started to feel the effects already?

Brexit is unlikely to have a material direct impact. However, we are monitoring developments as some Credit Union members may be affected.

Q. What’s the best advice you’ve been given, or would give, in business?

Do it because you want to do it and not for the applause or the rewards.

Q. What have been your highlights in business over the past year?

Seeing growth in the number of people who have genuinely benefitted from their Credit Union.

Q. What’s next for your sector?

The continued embrace of FinTech. Many Credit Unions throughout the country have already demonstrated leadership by prudently and collaboratively entering the realm of FinTech – and it’s paying off in dividends… quite literally.

Q. What opportunities or plans for growth do you see in 2018?

The Solution Centre, funded by a group of the country’s strongest Credit Unions and managed by CUDA, rolled out our ‘Facebook Loan’ digital loan service in 2017, and those Credit Unions that are involved have seen their interaction with younger adult members increase tenfold. The initiative has already been a huge success, now accounting for up to 15% of all loan enquiries for some Credit Unions.

Since then, the Solution Centre has launched in mortgage product, and again, take up across the sector has been strong.

In 2018 we will continue to embrace FinTech and deliver unique solutions to enable Credit Unions to become the dominant provider of credit in most towns and cities across the country.

Q. Where do you want your business/brand to be this time next year?

We want to mirror the success seen in other jurisdictions and to deliver even more value to more people by implementing more of our projects and by lobbying for key changes to legislation and regulations.