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Connexus : Issue 37
Group general manager for strategy and marketing Andrew Hadley says CUA doesn't intend applying for a bank licence at this stage. "But we do intend maximising the use of the term 'banking'," he says. "You don't go down to the shopping centre to do your 'credit unioning'. You go down to do your banking." Hadley concedes CUA's hand may be forced if other credit unions become mutual banks and gain strong market traction as a result. "We certainly would be concerned in the event that a number of the larger institutions convert to mutual banks and, for whatever reason, they are perceived as being safer and more secure than a credit union or building society. Clearly we would have to review our position." Dissenting voices Shell Employees' Credit Union (SECU), in NSW, is against the mutual bank push. "I think we have to tread very carefully," says general manager David Gilbert, who notes that SECU would in any case "run very shy" of any $50 million threshold. Gilbert's fear is that impetus from an industry marketing campaign -- featuring the line "It all comes back to our members" -- could be lost if another term is added to the marketplace. "There's a real risk that a lot of the work we are doing at the moment could be undone, when we've made some inroads and spent, for our industry, a bit of money on that advertising campaign." If the sector is to adopt the mutual bank terminology, Gilbert believes it should be "all in or not at all" regardless of the size of institutions. "To be honest, I think we have more important things to be focusing on." Erminio Putignano, managing director of brand consultancy FutureBrand Australia, says the mutual sector must be wary of presenting itself as "just another type of bank". He suggests it may be even better to play up credit union history and roots "rather than having an apologetic approach". "There is a strong case for a credit union to be called a credit union and for a building society to be called a building society rather than trying to come up with something that sounds more like being a bank," says Putignano, who has recently helped Australian Central Savings & Loans with some preliminary rebranding work. "The future of (mutuals) is defined by their ability to provide something different from a bank -- retaining credit union as a descriptor while adopting a fresher approach to branding and communications is the most effective way forward." Market watch Victorian credit union mecu is also watching this space. In 2005 it ditched credit union from its title and it has been using 'banking' in its tagline for more than a decade, first with 'intelligent banking' and more recently with 'responsible banking'. CEO Phylip Doughty says that, while mecu is very proud of its heritage and mutuality, the term credit union "just didn't resonate with people" or clearly reflect that "we're in the business of banking". On the possibility of becoming a mutual bank, Doughty says his team has examined the option and discussed it with members. "We haven't actually pressed the button on that, [but] we are watching very closely," he says. Doughty says mecu will be monitoring the QTCU move with interest. "We certainly see that this is a really important strategic option for any credit union that wants to expand its horizons." At QTCU, Murphy rejects suggestions that adopting mutual bank status will dilute the industry marketing campaign. He argues that terms such as 'bank' and 'banking' create a perception of strength and security with the public. "We see going down the mutual bank path as the best way to attract additional members as well as get business from those people," he says. "We want to combine all the good things about mutuality and credit unions with all the good things that are coming from the bank sector." If all goes to plan, Murphy hopes to launch QT Mutual Bank in October. -- Cameron Cooper is a freelance writer. 22 Connexus MARKETING www.abacus.org.au "You don't go down to the shopping centre to do your 'credit unioning'. You go down to do your banking." n Some credit unions and building societies can now apply to call themselves a bank. n Queensland Teachers' Credit Union aims to become Australia's first mutual bank. n Opponents believe the mutual bank push could detract from an industry marketing campaign. BRIEFLY