By Gareth Vaughan
Co-operatives in the financial services sector must turn challenges into opportunities to thrive today, says the president of the International Co-operative Alliance.
Monique Leroux spoke to interest.co.nz in a Double Shot interview during a visit to New Zealand. As well as being president of the International Co-operative Alliance, Leroux's also chairwoman, president and CEO of Desjardins. It's Canada's biggest co-operative financial services group with C$229 billion in assets, more than seven million members and clients, and about 48,000 staff.
Leroux acknowledged the age of the internet, social media, crowd funding and peer-to-peer lending provides threats and challenges to the co-operative business model. But turning disruption into opportunity by being innovative and agile is the key to surviving and thriving, she suggested.
"I think it is a challenge for any kind of organisation. I guess that even if you are a co-operative organisation you need to face change and you need to be good at innovation. Most co-operative organisations started as an innovation," Leroux said.
"Desjardins was founded 115 years ago in a small town, Lévis, just on the other side of the river from Quebec City. That kind of credit union or structure didn't exist in North America."
"And our founder and his wife (Alphonse and Dorimène Desjardins) decided that there was something missing to support people, small entrepreneurs and their communities. They were in contact with people in Europe, they were in contact with people around the world. (And) because Alphonse was very nice, (he was) able to get input from a lot of people... It was an innovation and if I look at the history of Desjardins group, and if I look at what we do now in Canada, a lot is about innovation," said Leroux.
"And I think that when we look at a lot of co-operative organisations, including some in New Zealand, many of them are very innovative. And I think that's the kind of DNA we need to encourage. It's not just about people. It is also about being innovative to better serve the people that we want to have within the co-operative."
In terms of an example of being innovative, Leroux cited a Desjardins mobile application that can give the user information about their driving, and their family members' driving.
"The advantage of that is if you are a very good driver and you allow us to get that data, we can provide you with additional discount (from your insurance policy)," Leroux said. (Tower has something similar in NZ).
"We need to take this kind of disruption that could be a major challenge and turn it into opportunity," said Leroux.
'Be very well connected to members & clients'
Given global financial markets turmoil and uncertainty, zero and negative interest rates and increasing regulation, Leroux said financial service co-operatives must stay close to their members.
"This question of low interest rates combined with the increased pressure on regulations for financial institutions, the fact that with the digital technology, disruption, we are having newcomers coming into the market sometimes without regulation. (And) we've got those major giants like Google very active into the payments system. It means at the end of the day we need to be very well connected to our members and clients," Leroux said.
"We need to make sure the product, the service, that we provide, as well as the relationship that we can develop, are very much in line with the needs of the people (customers/members). And in that context you need to be very agile," she added.
"So this question of agility, this question of being very efficient but at the same time being very connected, is something that should be part of the strategy."
In the video Leroux also talks about the challenges for co-operatives of bringing in outside capital whilst retaining their ownership model. (And there's more information about Leroux here).
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