Bendigo and Adelaide Bank and an Alliance of Australian credit unions today co-launched a new banking model that secures the independence and identities of the participating credit unions.
The Alliance model was developed by Bendigo and four credit unions – AWA, BDCU, Circle and Service One.
Under the Alliance model:
- The loans and deposits of the participating credit unions will be transferred to Bendigo Bank, while reserves remain 100 per cent member-owned.
- Alliance members continue to be serviced by their local branch staff.
- In time, they willhave access to new products and technology from Bendigo, with theAlliance credit unions retaining pricing and loan approval discretions.
- Bendigo will become the approved deposit-taking institution and will assumer esponsibility for compliance, systems and balance sheet management, with thisdelivering improved economies and cost savings.
The Agreement with Bendigo requires approval from 75 per cent of members voting at the respective credit union AGMs on 10 December 2014 and final approvals from APRA and the Federal Treasurer. The four credit unions combined have 39,000 members, $640 million in assets and $550 million in deposits.
The results from the recent DFA channel usage surveys highlights that players need to be able to move faster to take advantage of the emergence of the digital channels. Many smaller players, especially Credit Unions are hamstrung by their current technology portfolios, so this new model may offer new growth and service paths to the sector.