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Connexus : Issue 38
Magin says he isn’t surprised that funding tops the worry list. “The costs of securitisation have been increasing and will continue to increase,” he says. He notes that there will be an impost as a result of aDIs being required to revise securitisation policies and procedures in line with new aPS 120 rules to take effect in January. While retail deposits have been strong as a skittish public opts to save rather than spend, Magin believes ramping up lending in cautious markets represents an ongoing conundrum. “That’s really the main challenge. In the medium term, that’s the one thing that’s really going to have an impact.” On the challenge of acquiring new business, Phylip Doughty, former CEO of newly named bankmecu, says there is a significant opportunity to realise new business from existing sources, with mutuals needing to be respectful but proactive with members. “There’s an opportunity to convert customers who have had some of their business elsewhere to have more of their business with you. That’s quite a successful strategy.” Fears and cheers The survey highlights both the fears and points of optimism playing on the minds of mutual CEOs. There are some big issues of concern: • Will credit unions, building societies and mutual banks maintain their relevance in changing markets? • Will the industry implement a coordinated response now that consumers are seriously questioning their banking relationships? • Will the rise of mutual banks mean smaller credit unions become less relevant in the minds of people who don’t currently have a relationship w ith them? at the same time, the CEOs gave cause for hope: • Many mutuals are reporting strong key performance indicators. • Customers continue to have great trust in the mutual offering. www.abacus.org.au 29 www.abacus.org.au 29 FEATURE CEO SURVEY ...ramping up lending in cautious markets represents an ongoing conundrum.