CUFocusWinter 2019 - CREDIT UNIONS CELEBRATE FIFTH CX AWARD ON ICU DAY MX Toolkit | The Importance of Culture in Credit Unions - Irish League ...
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CUFocus
Winter 2019
CREDIT UNIONS
CELEBRATE FIFTH CX
AWARD ON ICU DAY
MX Toolkit | The Importance of Culture in Credit Unions
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04 Editorial
For the fifth consecutive year now, Irish credit unions have
won the national Customer Experience Ireland (CXi) Award.
Not only have credit unions achieved this unprecedented
five-in-a-row, but they are also the only (purely) financial
services organisation to make it into the top ten.
Irish credit unions are trusted by their members because
they have formed an emotional bond with them over time.
Credit unions make it easy for their members to do
business. They deliver on their promise. They fix things
when they go wrong. This is why Irish credit unions
continually collect the CX Award.
Credit unions should celebrate this achievement. It should
not however make us complacent, but encourage us to
continue to exceed our members’ expectations.
06 To that end, the ILCU, in conjunction with a number of
credit unions, developed the Member Experience (MX)
Toolkit. The toolkit aims to show credit unions how to
embed MX in everything they do. You can read full details
on pages 6 and 7. Suffice it to say here that MX is
everyone’s responsibility. From the Chair of the Board and
CEO, to the Directors and frontline staff. This is what will
keep credit unions unique and in the forefront of
members’ minds.
As we look forward to 2020, there remain many
challenges. Not least of which are the increased levies
being imposed on the movement which the ILCU is
vigorously campaigning against. Loans to asset ratios
remain low, and return on investments are at critical
levels. However, the bonds of trust between members and
their credit union have never been stronger. Credit unions
will remain as the cornerstone of communities throughout
the island of Ireland because of their commitment to their
local communities, their ethos and their outstanding
member experience.
Main Cover Image:
ICTU Secretary General, CONTRIBUTIONS
Patricia King, with the Contributions may be
ESRI's Professor Pete Lunn There is much to look forward to as the credit union
submitted via email to
and ILCU President Gerry
editor@creditunion.ie. movement enters 2020, the 60th Anniversary year of the
Thompson at the ICU Day
Breakfast Briefing ILCU.
Editorial Committee: Clive Davis and Paul Bailey. Volume 3 Issue 12 ©.
ILCU ISSN 1649-377X. ILCU Board: Gerry Thompson, President. Eamonn Sharkey, Vice-President. Helene McManus, Treasurer. Ciaran Bishop, Charles Murphy, Margaret Heffernan,
Blanche Ronayne, Martin Sisk, Joe Mulvey, Jim Toner, Vanessa Foran, Martin Busch. Supervisory Committee: Patricia Doherty, Michael Cogley, Terry Redmond Life Director: John Hume
Design & Print: Outburst Design. Please Note: The deadline for the next issue of CU Focus is Tuesday 4 February 2020. Please mark for the attention of the editor, CU Focus Communications Department.
The views expressed in this issue of the CU Focus are not necessarily the views of the Irish League of Credit Unions. Advertising: The placement of an advert does not imply endorsement of the product or
service advertised, either by the magazine or its publisher. The CU Focus will not knowingly carry false or misleading advertising. Articles The CU Focus would like to hear your news and views. Send in any
newsworthy stories or photos. The CU Focus tries to publish all appropriate information submitted, but may be precluded by space constraints.
Published By Irish League of Credit Unions 33 – 41 Lower Mount Street Dublin 2 Tel: 353 (0)1 614 6700 Fax: 353 (0)1 614 6701 Email: info@creditunion.ie Website: www.creditunion.ie
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04 Credit Unions are five times CX
09 Champions
Irish credit unions claim the top spot in the CXi League
Table for a global, record-breaking fifth consecutive
year
06 The MX Toolkit
A Member Experience (MX) Toolkit has been
developed for credit unions to further embed MX at
the core of everything they do
17 08 CRIF Levy Update
The Minister for Finance has announced a decrease in
the CRIF Levy - but this does not go far enough for
credit unions
09 ICU Day Breakfast Briefing
Financial education was the key focus of the Breakfast
Briefing on ICU Day 2019
10 Cyber-Security Awareness
22 2019 has seen an increase in ransomware attacks and
BECs. This guide will ensure you stay cyber-aware
12 Leadership in Culture
Exploring the importance of culture in credit unions,
including from the regulator's point of view
14 What's the Culture in your Credit Union?
The importance of ensuring a healthy culture in your
credit union
30
22 30 Years of the ILCU Foundation
The highlights from the recent work of the ILCU's
International Development Foundation, celebrating its
30th Anniversary this year
30 Your Stories
A look at all the latest news, events and initiatives from
credit unions across the island
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RECORD BREAKING CX
AWARD FOR CREDIT
UNIONS
Credit unions have once again been awarded the best customer experience in Ireland,
leaving the banks trailing in their wake. For a global, record-breaking, fifth consecutive year,
credit unions have been named the overall winners of the Customer Experience (CXi)
Awards. This is a world first for the CX Awards.
Credit Unions Buck the CX Trend
Of the 160 brands examined for the
awards, only 15 brands managed to
improve their CX score. This makes the
achievement by credit unions all the more
impressive. Credit unions are also only one
out of a handful to remain in the top 10
since last year.
Overall, there was a noticeable drop in
the CX scores amongst other companies.
The report identified the fact that many
companies struggled to gain traction with
their CX initiatives over the past year, while
others were just not focused enough on
customers. The report also found that
brands were failing to differentiate
themselves from competitors through CX.
Another key issue with brands appeared
to be the lack of the ‘human touch’ - which
was the focus of last year’s CX report. The
report found that the “marrying of
technology with the human touch …..is congratulate Irish credit unions for their ‘Six Emotional Drivers’. These are;
still a balance that must be got right. consistently high performance and for n I Trust You - you build trust in
Human beings thrive on making completing the ‘Drive for Five’. It really is a everything you do with me
connections with each other. Whilst digital fantastic achievement to remain the Irish n You Know Me – you treat me like an
plays a key role in delivering an easy, leader in CX over a five-year period - and a individual and understand my needs
stress-free experience, it is the human world’s first. Many Irish companies, n You Make it Easy – you make it easy for
interactions that create the memorable particularly those in the financial sector, me to do business with you
experiences we remember and share.” could learn a lot from credit unions, n You Get Me – you genuinely understand
None of the above were issues for credit especially their member or customer- what it’s like to be in my shoes
unions however. Credit unions excel in centric approach.” n You Deliver on your Promise – you
their personal connection with their manage, meet and exceed my
members. They genuinely care about their How the CX Survey Works expectations
members and put their members at the CX is the emotional connection a person n You Fix Things – when things go wrong,
heart of everything they do. Likewise, the feels when engaging with a you fix them brilliantly
credit union ethos and values ensure they brand/organisation. The annual survey
are differentiated from competitors (the examines this emotional connection in The CX company has identified these
banks, moneylenders) – and this is why detail by asking a representative cross- bonds as the ones that create deeper
they claim the top spot again this year. section of Irish consumers to rate their relationships between the customer and
Commenting on the achievement by experiences of 160 brands across 10 the company. This ultimately leads to an
credit unions, Michael Killeen, Chairman different sectors. The performance of the outcome of advocacy and growth.
of the CX Company, said: “We have to different brands is measured against the Over 42,000 experiences were evaluated
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for the 2019 survey using these key Commenting on credit unions claiming union to other potential members.
drivers. Other aspects of CX that were the number one position for the fifth Another factor to take into consideration
examined included loyalty, value for consecutive year, the report said: “Utter is that happy employees lead to greater
money and the importance of staff member commitment is in their DNA and staff longevity and therefore more
happiness for CX. Interestingly, credit remains their number one priority. This knowledgeable CX experience delivery.
unions also scored very highly for value year saw them introduce an innovative, Congratulating credit unions on the
for money, as well as loyalty. world class CX toolkit to aid every remarkable achievement, ILCU Head of
employee to continue to deliver a Communications, Paul Bailey, said:
How the Banks Fared consistent and remarkable experience. "Credit unions across the country have
Credit unions were also the only financial Simple products, improving processes done themselves proud yet again with
services organisation to make it into the and smiling employees makes them hard this record-breaking achievement. This
top 10, and even the top 100. In to beat!” prestigious award is testimony to the
contrast, the banks performed worse You can read more about the CX efforts, dedication and commitment of
than in previous years, with AIB falling 51 toolkit for credit unions, named the everyone involved in the credit union,
places to number 130. Last year, AIB Member Experience or MX Toolkit, on from staff to volunteers, to putting people
was the highest ranking bank in 79th pages 6 & 7. first. Credit unions in every community
place. ensure they always put their members at
This year, the highest ranked bank was Benefits for Credit Unions the heart of everything they do. Credit
EBS at 107, up eight places since last The benefits of being the highest ranked unions genuinely care, and when you
year. Ulster Bank joined AIB at number CX organisation in Ireland are numerous. care about someone, that’s what they
130, up four points since last year. One of the most important benefits is that remember. This is ultimately why credit
Permanent TSB was at 140, down 45 organisations performing well in CX have unions were for the fifth consecutive year
places. KBC also fell 30 places to 149. customers (members) that are seven named as national CX Champions.”
According to the CX report, the lowest times more likely to purchase (borrow).
scoring emotional driver for the financial They are also eight times more likely to
sector was ‘You Deliver on Your Promise’. try another product or service. Members
The report stated: “With the entire sector, will be more likely to continue to do
aside from the credit union, outside the business with the credit union and also
top 100, the financial sector as a whole more likely to recommend the credit
needs to get back to basic and start
making realistic promises that they can
actually deliver on.”
Credit unions should be aware however
there will be an increased focus on CX
from the banks next year.
The Top Ten CX League Table 2019:
Credit unions were followed by Laya
Healthcare in second place and
Phonewatch in third place. It was
interesting that the two highest places
under credit unions were both insurance
companies, despite the negative media
coverage they have been getting. An Post
fell from seventh place last year to tenth
place this year.
The full list of the top ten brands in
Ireland is shown below.
Ireland’s CX Top Ten
n Credit Unions
n Laya Healthcare
n Phonewatch
n Oxendales
n Specsavers
n Arnotts
n Peter Mark
n Boots
n Lush
n An Post
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Delivering an Excellent
Member Experience
For many years, organisations were Customer experience (CX), or Member customer/member advocacy and
evaluated against the level of Experience (MX) in a credit union business growth.
context, is the sum of all interactions a
customer service they provided.
person has with an organisation. It Irish credit unions have been
This typically focused on the describes how people feel about all of recognised by their members for
human interaction between staff the interactions they have and is providing a world class Customer
and customers. However, in the measured against their expectations – Experience (CX). This has been
omni-channel environment in which i.e. what they expect from all areas of reflected in Irish credit unions being
every organisation operates, it is your business. awarded first place in the annual CXi
Ireland Customer Experience Report for
now generally accepted that this
The Framework five consecutive years. Irish credit
measure is too limited in scope. So what are the key pillars of great unions are the only organisation,
Customer service is functional, customer or member experience? The worldwide, to achieve this accolade.
mostly reactive and is now seen as CX Framework, developed by The CX While credit unions may excel, they
one part of the puzzle. Academy, identifies six emotional should certainly not rest on their
Organisations have now shifted to drivers that enable companies to build laurels. The experience which people
emotional bonds with customers. These want and expect from credit unions is
tracking the entire journey which a bonds create deeper relationships changing, and it is imperative that
customer may undertake, looking at between the customer and the credit unions continue to change to
every touchpoint and possible company to deliver CX Excellence. This meet the needs of their members.
interaction. ultimately leads to an outcome of People want a consistent, personal,
seamless experience, using a channel
of their choice and at a time of their
choosing. In addition to the changing
landscape, credit unions’ competitors
are realising the importance of CX, and
investing significantly in enhancing
their offering, whilst aligning their
business goals around it.
MX Working Group
In order to adopt and develop a more
formalised approach to the delivering of
excellent member experience, the ILCU
Communications Department brought
together a group of credit union
marketers with a keen interest in this
area. The group - Roisin Gilroy, St.
Canice’s Credit Union, Padraig Power,
HSSCU, Eva McCloskey, Letterkenny
Credit Union, Liam O’Doherty,
Gurranabraher Credit Union and Julie
Thornton, Life Credit Union – worked
together with members of the ILCU
Communications Department, along
with Michael Killeen and Siobhan
Mallen from The CX Company.
The group developed clear insights
into the MX challenges and
opportunities faced by credit unions
and identified the key areas which
credit unions can address to enhance
their MX activities.
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The toolkit provides insights and techniques which credit
unions can use to develop a deep understanding of their
membership base, including the various data sources and
research options which can be used to develop a deeper
understanding of member needs and behaviour.
3. Channel and Process Audit
Great MX is intentional, purposeful and consistent. It is not just
about the transaction, but also optimises every touchpoint and
takes into account all member interactions, both online and
offline.
Credit unions are provided with a toolkit to help them to carry
out both a channel (in-office, online, phone, post and email) and
a process (membership application and loan application) audit.
This will assist credit unions to identify a range of potential
barriers to the delivery of an excellent member experience.
4. Framework for Success
Once the groundwork of research and analysis is done, it is time
to take the issues and opportunities identified and turn this into a
deliverable set of actions. Constructing a framework for success
doesn’t just mean picking key insights and goals and compiling
them into a realistic, robust plan. It also means ensuring that all
credit union personnel, from Board level to frontline staff, are
aware of the strategy and fully bought-into their role in helping to
bring about success.
While everyone within the credit union will have some role in
delivering the overall MX strategy, it is also beneficial to appoint
MX champions within the credit union to drive the overall
approach. Many might default to picking a senior member of
staff, but this does not have to be the case. The person most
passionate and committed to helping to deliver an excellent
member experience in your credit union may not be someone
tasked with engaging with members every day.
Embedding a process of ongoing
measurement and refinement of the
The group quickly established that credit unions would greatly overall MX strategy is also identified as a
benefit from the development of an MX toolkit which could help key element of success.
to: The MX toolkit can help credit unions
a) Highlight the critical importance of MX to develop a more standardised,
b) Provide guidance on the key tenets of excellent MX consistent approach to the delivery of
c) Assist credit unions in developing an MX strategy aligned to great member experience. Credit
their own requirements union personnel can access the
d) Highlight methods to ensure that all stakeholders were
new resource by visiting the
committed to the strategy affiliate area of
creditunion.ie.
The group met on five occasions during 2019 to share their
experiences and to develop the toolkit. The toolkit, which was
launched at the 2019 Marcomms Conference in Tullamore,
covers four key areas: Meet MEG
1. What is MX and why is it important? In order to act as a guide when
The first section of the toolkit outlines what we mean when we interacting with credit union
talk about MX and how it differs from member service. The members, the MX Working Group
toolkit then examines the six key pillars of MX and highlights the introduced MEG. MEG, an acronym
short, medium and long term impact of developing an effective for Meet, Engage and Go the extra
and considered MX strategy. mile, can be viewed as the
personification of a typical member. All
2. Understanding Members decisions and actions taken by credit
‘Start with the member’ might sound obvious, but some union personnel should be done with
companies often approach CX and digital transformation from MEG in mind, by constantly putting
an inward-facing, cost-cutting or productivity perspective, which themselves in MEG’s shoes.
rarely results in a superior experience for their customers.
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DECREASE IN CIRF
LEVY ANNOUNCED
As CU Focus readers will The ILCU has campaigned for the per cent. The impact of the revised
levy to be set to zero. It is the ILCU’s rate will see a 44% reduction in the
know, the Irish League of position that affiliated credit unions Resolution Fund levy for 2020
would be better positioned to compared to 2019”.
Credit Unions has been withstand the increases in the While this is not the 100%
consistently lobbying the Central Bank Industry Funding levy decrease the ILCU had campaigned
(CBIF Levy) should the CIRF levy be for, it acknowledges that this does
Minister for Finance, and set to zero. represent some reprieve for credit
Following the consultation period unions, who are currently paying
his Department, in relation on the CIRF levy (between June and €7.5 million per annum for the CIRF
to the Credit Institutions August 2019), and persistent levy. It is limited progress.
lobbying from ILCU representatives, However, this is still well over and
Resolution Fund levy (CIRF the Minister for Finance has above what a volunteer-led, not-for-
announced a 44% decrease in the CIRF profit organisation should have to
Levy). levy for 2020 compared with 2019. pay. Coupled with the CBIF levy
The Minister’s statement said that: increase (which is due to increase
“It has been decided that the target from €1.5 million to €7.8 million by
size of the Resolution Fund should be the end of 2022), credit unions are
set at €65 million and that this having to contend with a wholly
target should be met by 2025. It was unacceptable tax on social capital.
also agreed that the Resolution Fund The combined effect of the
should be reviewed in 2025 and that increase in the CBIF levy, and this
the annual levy should be reduction in the CIRF levy, will see
approximately €5 million per annum credit unions paying approximately
from 2020 to 2025 to increase the €3 million extra in levies per annum
size of the Resolution Fund from €35 in the coming years. The situation is
million to €65 million, broadly in line made all the more unacceptable by
with the increased average asset size the current climate of critically low
of credit unions. The adjusted levy return on investments.
rate would be dependent on the In contrast to a sharp increase on
movement of the asset levies for credit unions, the
size of the sector Government recently announced
over the five years plans to support local community
and whether any radio, reducing the levies placed on
costs of resolution independent broadcasters. Unlike
have been incurred many media organisations, credit
by the Resolution unions are wholly not for profit.
Fund. The Charity Regulator is fully
The levy rate for funded by Government, so that
2020 will be set out society at large supports the
in a Statutory regulatory cost of the enormous social
Instrument in capital it oversees. Why then is the
October 2019 Government so willing to undervalue
and will be the role of credit unions with these
based on the levies?
assets as at While some progress has been
end of June achieved due to lobbying efforts, this
2019. Based development yet again clearly
on sector illustrates the incoherent approach by
assets of circa Government to levies on the credit
€18.23 union movement. It is detrimental to
billion, as at a movement which is of such
end June 2019, economic importance to ordinary
the levy rate to people, now more than ever in the
raise €5 million uncertainty and upheaval of the
would be 0.0274% Brexit era.
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ICU DAY
FINANCIAL EDUCATION A KEY FOCUS
ON INTERNATIONAL CREDIT UNION DAY
Financial education was the main focus of a
breakfast seminar to mark International Credit
Union Day (ICU Day®) on 17th October. Credit
union representatives, politicians, social and
volunteer organisations and Central Bank of
Ireland (CBI) representatives were among the
attendees. Keynote speakers were Head of the
ESRI’s Behavioural Research Unit, Professor Pete
Lunn, and ICTU General Secretary, Patricia King.
Opening the event at the Dublin Dental
University Hospital, Irish League of Credit
Unions (ILCU) President Gerry Thompson said:
“Credit unions are fundamentally different to
other financial services providers. Credit unions
almost no difference whether those answering simple, jargon-free explanations of complex,
are not-for-profit, community based and
the questions had a university degree or not. and even straightforward, financial products.
volunteer led. Our movement is part of the social
Credit unions can become the leading providers
fabric of the country, a model of community
Credit of this information.
banking open to all with deep roots and
When it comes to credit cards and loans, people
widespread affinity.”
also appear to have very little understanding of Solidarity and the Collective Good
The theme for the 71st ICU Day® was ‘Local
the product. Experiments showed that people Ms King, who focused on the future for credit
Service. Global Reach.’ The theme was
will underestimate how long it will take them to unions, including the challenge of regulation
reflective of how each individual credit union
pay off a loan at a given interest rate. They will and relevance amongst younger people, said:
serves a local community. Collectively, the local
also underestimate how much it costs. As “The credit union movement is characterised by
connection has a global effect – there are now
people are so uncertain, they are very easily a distinctive set of principles which have at their
260 million credit union members in 117
influenced. For example, Professor Lunn spoke core a strong commitment to attaining the
countries worldwide.
about an experiment where people were asked economic and social goals of the membership
ICU Day® has been celebrated annually
to choose between two different loan products. and the wider local communities.”
since 1948, and is traditionally marked on the
They subtly emphasised one loan over the other Ms King said that the credit union movement
third Thursday in October. The awareness day
“much like a card trick” and the people opted is challenged with harnessing its efforts to
aims to bring attention to ethical and inclusive
for the loan that had been emphasised. Again, develop ways to attract new and younger
financial services.
the experiments have shown time and again members. She said that at the core of that
that cost of credit is poorly understood and strategy should be the ethos that the collective
Behavioural Economics
people easily manipulated. good always outweighs limitless accumulation.
As the keynote speaker on the morning,
Ms King said that it is a more difficult task than
Professor Lunn presented some very thought-
Mortgages it appears to try and convince younger people of
provoking findings from behavioural economics
Professor Lunn also addressed the inertia or the value of solidarity and the collective good.
in relation to savings, credit and mortgage
unwillingness of consumers to switch mortgage However those values must continue to be
products.
products. Those who understand the hassle upheld, no matter how hard the challenge is,
Professor Lunn explained that numerous
involved in switching are much more likely to she said.
experiments he and his unit at ESRI have
actually do it. Those who don’t understand the Ms King also warned that “extreme
carried out have all revealed similar findings:
hassle involved become adverse to switching regulation” would result in the undermining of
“People simply do not intuitively understand the
because the fact they don’t understand causes the credit union movement. She said it
relationships that drive the simplest (financial)
them to lose confidence. Lack of knowledge appeared that the CBI had fairly strong views on
product you could describe.”
over mortgages is also huge among people – long term lending for credit unions. She said it
including those who actually have a mortgage. has been very difficult and challenging for credit
Savings
An experiment carried out with mortgage unions to get to a point where they are enabled
He went on to share the details of an
holders revealed that 1 in 3 did not realise if you to progress with long term lending. Ms King said
experiment to determine people’s
take a mortgage for a shorter term, overall you she found it difficult to take on board the
understanding of a simple savings product.
end up handing over less money for the opinions of the CBI on this topic, especially in
They were asked to estimated how much money
mortgage. the context of ‘the misdeeds’ in relation to the
they would have in the medium and long term if
Professor Lunn concluded by saying that regulatory regime in the past. Ms King said there
they put away a lump sum of €1,000 at 5%
these revelations place greater responsibility on is experience to suggest that in the aftermath of
interest a year. People gave accurate enough
financial providers, and regulators, to ensure a regulatory collapse, extreme regulatory
estimations of how much they would have up to
that the public understand financial products – measures can be introduced. These extreme
five years. After 10 years, they were not so
even the most simple products. He also said measures will only serve to undermine the very
accurate on how much they would have
that there is an opportunity for financial services essence of the model of the credit union, she
accumulated. After 20 years, they were
providers to market themselves as being more concluded.
underestimating how much they would have.
‘decision friendly’. That is, helping their Ms King also said that, as the ILCU guides
They were also asked to estimate how much
consumers to understand these products and affiliated credit unions through a period of
they would have by the time they got to 20 years
assist them in overcoming their lack of significant transformation, it will be difficult, but
- if they put away €1,000 ever year as a regular
knowledge. essential to ensure that the principles of
saving. They underestimated by 50%. “They
Credit unions could use this information to solidarity, cooperation and the interests of
had absolutely no idea of the right answer”
become the leading voice on financial education members is not compromised in the mission to
Professor Lunn explained, adding that it makes
in the country. People are clearly in need of achieve higher efficiency levels.
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CYBERSECURITY
AWARENESS
October was Cybersecurity www.nist.gov/topics/cybersecurity cyber insurance in place.
Awareness Month. This is an annual The recently introduced EU Since the introduction of GDPR, a
Cybersecurity Act will bring a strong financial institution’s financial exposure
international campaign to raise agency for cybersecurity and EU-wide from the risk of a data breach or
awareness of cybersecurity threats rules on cybersecurity certification. On cyberattack incident has increased
and how to best handle them. 2019 27th June this year, the European significantly. Credit unions are no
Cybersecurity Act came into force, exception to this. Data breach claims are
has seen an increase in
setting the new mandate of ENISA, the also increasing, most of which are as a
ransomware attacks and business EU Agency for Cybersecurity, and result of human error.
email compromise (BEC). So it is establishing the European cybersecurity It is imperative, therefore, that credit
timely to re-iterate the importance certification framework. unions give priority to reviewing the
Depending on the size and type of current level of data breach/cyber
of having adequate processes and organisation, the best way to assess your insurance cover they hold. They should
controls in place to mitigate cyber information security position is against a ensure that it is adequate to mitigate
risk in your credit union. recognised standard that is both against the potentially catastrophic costs
auditable and certifiable, such as of this emerging and ever increasing risk.
The regulators often remind us that as ISO27001.
a consequence of the potential adverse Cybersecurity is no longer the sole job ILCU Support
financial, legal, customer and of IT security professionals. It’s a shared For those credit unions who are
reputational impacts arising, responsibility, which requires efforts at subscribers to the Irish League of Credit
cybersecurity and IT risk remain a key all levels of organisations. Union's CUCC service, the following
focus area - and should be a priority for resources are available to assist with
all regulated entities WHO IS RESPONSIBLE FOR these cyber security responsibilities:
Regulators expect financial institutions CYBER SECURITY?
to consider relevant good practices and n Cyber Risk Assessment (Risk
internationally adopted frameworks for IT Subscribers only)
n Cyber Risk Guidance document (Risk
BOARD
Security Risk Management as may be n Establish policy, risk appetite,
appropriate. Subscribers only)
n Five Cyber Questions for the Board
strategy
One such example is the National n Review procedures
Institute of Standards and Technology n Assess results (Compliance and Risk Subscribers)
(NIST) in the United States. The NIST n Monitor progress and n Cyber Fraud Typologies (Compliance
has developed a Cybersecurity and Risk Subscribers)
n Cybersecurity for Credit Unions: A
implementation
Framework that provides a suggested
structure for the controls that institutions MANAGER/CEO practical overview of current best
should have in place in order to manage n Identify risks practice (Compliance and Risk
and mitigate cyber risks. n Plan for attack Subscribers)
n Prepare personnel/systems Please note that the list above is not
n Improve staff training/awareness exhaustive and other resources are
ER ID
EN n Implement Board strategy available to CUCC subscribers
COV TIF n Record and report progress/issues
n Suggest changes
R E Y Cyber Security Awareness 101
Human error is involved in 95% of all
EVERYONE IS RESPONSIBLE! security breaches
FRAMEWORK n Have a regular security awareness
T
RES
Board, CEO, Employees, Volunteers
TEC
training schedule in place for your
PON
staff (and other relevant
PRO
Data Protection/Cyber Insurance stakeholders)
n CU L&D provide a number of
D
While cyber security is paramount, it is
also important to mitigate against the relevant courses, for example their
DETECT financial consequences of a data breach Data Protection and Cyber Security
incident occurring by having appropriate for Credit Unions course
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n Use complex passwords. A cyber survey by
the UK's National Cyber Security Centre A new report from AIG states that deliver customised simulated
(NCSC) conducted in April this year found business email compromise (BEC) phishing emails to staff over a
that 123456 was the most widely-used is now the main driver of cyber- pre-defined period which display
password on breached accounts insurance claims in the EMEA “Teachable Moments” messages
n Avoid connecting to public WiFi region. After BEC, ransomware to individuals who fall for a mock
n Filter email traffic was the second biggest offender in phishing attack.
n Implement two-factor authentication, e.g. 2018, followed by data breach by For further details on the service
note the Strong Customer Authentication hackers and data breach by www.topsec.com/phishing.php
introduced in September for PSD2 for employee negligence tied in third
mobile/on-line transactions place. If interested in finding out more
n Install anti-virus software and keep it up to In most cases, BEC can be about the special offer available to
date traced to a phishing email ILCU credit unions, please contact
n Know your IT estate; keep an inventory of all containing a link or attachment. phishingawareness@creditunion.ie
IT assets Engaging with the email’s content
n This should include details on end of life may give an intruder access into
support for operating systems the user’s inbox allowing the
n Keep all your IT assets up to date (patching) intruder to send and receive
n Scan your IT estate for vulnerabilities emails from the victim’s email
n Password protect and encrypt confidential address.
files in transit The ICT dept. of ILCU has
n Develop & maintain a backup policy negotiated a significant discount
n Restrict and control privileged access on Topsec’s Phishing Training as a
n Develop & maintain a Data Breach Service for any interested credit
Response plan unions. This service allows you to
Refer to www.creditunion.ie for helpful
guidance documents & sample policies
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The language of leadership to
influence culture
ulture can be described as create the shared identity of ‘us’
C learned beliefs. Practically,
within the credit union
movement, this is when and where
within the context of credit unions.
Credit union culture can be
visualised as a set of interlocking
volunteers and staff learn the norms influencing factors ring-fenced by
of governance and operations the strong credit union ethos. It is
through their experiences and within this space that decisions are
interactions. Forbes Magazine has made that reflect a credit union’s
described culture as ‘the way we get cultural understanding and beliefs.
stuff done around here.’ The credit As the diagram demonstrates,
union movement has its own distinct there are a variety of factors that
culture, which compares favourably contribute to the cultural
to other financial institutions. With understanding of the credit union
strong distinctions drawn from the movement. Similarly, in other groups,
focus on members, volunteering and there are complex influences on
the credit union ethos, these factors what constitutes their culture.
conduct failings that have occurred within whether action is taken to address risks on
Regulators View of the industry in recent history.” Financial a timely basis.” The Prudential Regulation
Culture Conduct Authority, Transforming Culture in Authority’s approach to banking
Looking outward, regulators have been Financial Services. supervision.
actively commenting on culture for some
time. It is important to be aware of how “We do not have any ‘right culture’ in
“…some banks are more advanced in
they view culture - and associated mind when making our assessment;
responsibilities of change and their transformation towards a consumer-
rather we focus on whether boards and
performance. management clearly understand the focused organisational culture than others,
circumstances in which the firm’s viability and all have a distance to travel.” Central
“Culture in financial services is widely would be under question, whether Bank of Ireland (CBI), commentary on
accepted as a key root cause of the major accepted practices are challenged, and culture in retail banks.
approach rather than embracing a leadership and stepping up and actually
What Regulators customer-focused perspective; assigning saying this can be a positive thing for your
say about Retail insufficient resources to the Examination; firm as opposed to just a compliance thing
Banks or offering initial compensation proposals which in a sense is constricting.” Jonathan
As the retail banking sector continues to that fell well short of our expectations.” Davidson, Executive Director of
access and amend its cultural and Derville Rowland, Head of Financial Supervision, Financial Conduct Authority.
Conduct, CBI.
decision-making shortcomings, there are
It is recognised that banks struggle to
opportunities for credit unions to
These words provides evidence of cultural change their culture as historically they
consolidate ongoing success in member
shortcomings in the banking sector. failed to tackle behavioural change.
experience. The regulators recognise the
However, this realisation has led to Training for this type of change is not a
challenge.
change. Banks are becoming more linear process and needs continuous
competitive in the space of customer touch points to review, practice and
“During the course of the Central Bank’s experience, a realisation that when reassert desired behaviour. People change
Tracker Mortgage Examination, we applied early in the change process allows their behaviour gradually and on an
detected a number of cultural indicators for a greater return beyond immediate individual basis, so credit union support
that were standing in the way of fair customer satisfaction. should recognise the requirement for
consumer outcomes. For example, we continued investment in training to
found banks adopting a narrowly legalistic “The Senior Manager part is about achieve results.
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Why is Culture important?
Culture is of course complex and is woven communication and decision-making the introduction of ethical requirements post
into the formal and informal decisions that culture and values of their organisations. financial crisis. Culture audits and MCC
we make. In one form or another, most Culture and leadership are inextricably Culture requirements are terms that will
business strategic and operational linked. Culture has so often had a positive become familiar in the coming years.
decisions can be traced to the culture of impact at local level within the credit union
the boardroom. Leadership and decision- movement as strong values and ethos
making are then at the hub of behaviour provided for our members’ needs.
and culture in any organisation. That is Opportunities exist to use culture effectively
why, with reflection and lessons learned in achieving performance for your credit
from the global financial crisis, culture is union. There is a direct relationship
emerging as a hot topic with regulators. between the leadership function of
Regulators are increasingly moving management, Boards and committees to
toward an approach that accounts for both credit union and culture. Effective
culpability, responsibility and accountability. communication at an individual and
The CBI has indicated that regulated organisational level enables culture to be
entities can expect more intensive scrutiny positively influenced for the benefit of your
of their norms and conduct in 2019. common bond.
Regulators are suggesting that Boards and Recognising the increased dialogue from
managers are increasingly expected both regulatory jurisdictions, it is probable
through their individual and collective that greater cultural awareness will be
leadership to demonstrate through promoted in a manner similar to the
Structured approaches have greater of your leaders enables sustainable
What next? success when they identify skills and change, providing a measureable return
competencies to support and sustain through successful performance. Training
Culture and strategy programmes, leading required change. Well-designed training engagement should also be tracked
to change, in any organisation, can often incorporates applied skill development to employing the MCC Register on CU Learn.
struggle as they require new behaviours reinforce positive behavioural change. This tool identifies individual mandatory
that need Board and management support. Investment in training and the development annual training requirements.
Recognising that culture includes the way straightforward Cultural Audit questions to 2. Are there more one-way broadcasts
people interact with each other, how they pose; from leadership or grassroots
solve problems, and how they justify 1. What’s the communication style during conversations?
themselves are some initial and decision-making? 3. Could any of the above be improved?
Effective organisational culture, especially Culture and Risk training and development needs.
one including good leadership and n A MCC Register is available on CU Learn Use these opportunities to engage for
communication, has a significant effect on to track individual attainment of skills cultural success in 2020 and beyond.
job satisfaction and organisational and mandatory training requirements
n The Communications Department has
performance. The CBI recently strongly
recently published a Member
asserted that ‘leadership is a critical driver
Experience Toolkit, available for
of culture’. One of the most important
download at creditunion.ie
attributes of effective Boards as leaders is n CU L&D offers a range of training for
the capacity to develop and communicate Induction, the Board, Governance and
an appropriate risk appetite. Leadership. The suite of leadership-
The Irish League of Credit Unions (ILCU) focused courses, with a renewed focus
provides a number of resources to assist on applied communication and culture,
with the challenges identified. These will be available in 2020.
include; n The CU CPD scheme provides support
n The CUCC schedule of regional to your credit union officers. Consider
workshops where themes include enrolling them to provide for their
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THE IMPORTANCE OF
CULTURE
IN THE CREDIT UNION
IT AIN’T WHAT YOU DO IT’S HOW WOULD YOU DESCRIBE policies and procedures to follow. They
should live the values and lead by
THE WAY THAT YOU DO IT THE CULTURE IN YOUR
example.
(AND THAT’S WHAT GETS CREDIT UNION? Two areas the Board should review
RESULTS!) Culture within Operations when assessing its culture are:
Culture within the operations of a credit
n The Chair
Culture has been given much more
prominence since the global financial union will impact the majority of staff and
volunteers. All credit unions have a Most Chairs will require an element of
crisis and is now treated as a key
culture. whether they choose to or not, training based on their previous
regulatory priority. It is widely accepted
however they can influence what culture experience. Good practice will
that cultural failings in the banking sector
they would like to have. recognise skill gaps identified through
were a significant contributory factor to
Operational Best Practices to consider the credit unions annual Training
the economic crisis. It was discovered
include: Needs Analysis (TNA). They should
that whilst rules may have been followed,
n Do members, staff and volunteers feel
play a key role in ensuring the
wrong decisions were made.
diversity of the Board and encourage
safe to raise concerns within your different views and opinions, including
WHAT IS CULTURE AND credit union, within the normal line those of different backgrounds,
MORE IMPORTANTLY, WHAT management process, without experience, skillsets etc.
embarrassment or fear of retaliation?
IS THE CULTURE IN YOUR
CREDIT UNION?
Does your credit union support a n Avoid Groupthink
culture where the most junior of staff The objective is to create an
By its very definition, culture is a can highlight or question a process or
collection of beliefs, behaviours, environment where directors feel
procedure where appropriate? Are comfortable challenging popular
standards, attitudes and values of the people open to alternate views?
n Does your credit union embed a
people within your credit union, which in opinion, especially where an area has
turn set the tone of the culture within not been fully explored or debated.
culture of compliance and risk? For ‘It’s what we’ve always done’ is an
your credit union. example, is compliance talked about
The culture is shaped by multiple easy response, but should be avoided
at every team meeting and given the at all costs and be replaced with a
elements, for example from the attention it deserves?
n What is the communication structure
environment processes and strategies, to healthy challenging discussion!
perceptions thoughts and feelings. Directors should also be aware that
within your credit union and to both admiration and fear can often
It is set from top down and bottom up. members? For example, are all
If there is a need to review or change the drive groupthink and challenge sound
communications open and decision-making processes.Promote
culture within your credit union, it can transparent?
n What is the culture when receiving or
take a great deal of effort from multiple diversity in thinking, start by enrolling
people (people first have to ‘unlearn’ on the new and free eLearning course
responding to complaints? For Equality and Diversity Essentials.
values behaviours etc.), and they have to example, are they seen as an
show a desire to change. informative experience to improve
However, studies have shown people processes or identify training needs?
BANKING CULTURE
are likely to follow culture within an Studies have shown that firms are
organisation if there is significant peer increasingly willing to acknowledge that
Board
pressure to do so - good or bad! people are motivated and take actions for
The culture within the Board is one of the
reasons other than monetary rewards. It
most critical areas of culture within the
is recommended that the Board of
credit union as it sets the tone from the
directors and manager of the credit union
top and is echoed from the bottom up. (It
continue a practice that fosters a culture
should also be noted that Tone from the
which rewards appropriate behaviour,
Top is not necessarily the spoken word or
and not allow misplaced incentives to
rules made, it can often be behavioural
take root.
driven and perception).
A recent example of this was
The Board sets out the values that
evidenced in Irish retail banks with the
should be embedded, and devises
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findings from the Tracker Mortgage and the manager of the credit union Evidence of a poor culture could include:
n
Examination, conducted by the Central need to own and embed the required
High turnover of staff
n
Bank of Ireland (CBI). It identified a culture in their credit union - and drive
Increase in internal fraud
n
culture of achieving sales targets ahead the change if required. Just because
Poor member experience
n
of good consumer outcomes. To date, rules allow an activity to take place does
Miss-selling of products
n
lenders have paid over €580 million in not mean morally it is the right thing to
Increase in number of complaints
n
redress and compensation to affected happen. Processes and controls will not
customers, with a cost to the banks of Reputational damage
n
secure a good regulatory outcome,
over €1 billion. Higher loan book arrears
n
unless the right cultural mindsets and
The CBI also released a report in July Fines or sanctions from regulators
n
behaviours are embedded throughout the
2008 entitled Behaviour and Culture in credit union. Greater challenges in volunteer
Irish Retail Banks in which it Complying with rules is not enough, recruitment
recommends the embedding of a the credit union should embrace the n Low morale
‘consumer-focused organisational spirit of the rule or regulation.
culture’. The recommendation was that And of course, all the above has an
banks are to put the customer at the HEALTHY CULTURE impact on the bottom line of a credit
centre of every decision they make, and The Financial Conduct Authority’s union.
this should influence future strategies. message on culture is: ‘We cannot
Of course, credit unions have been specify the culture a firm should have, CHANGING CULTURE
doing this for years and already have a
but what we can do is help firms to For a credit union to change its culture it
distinct advantage with the unique
identify what is a healthy culture, and has to identify where it is at right now,
relationship they hold with their
how to get there.’ and where it wants to be.
members. This was evidenced only
An action plan can then be put in
recently by the winning of the CXi Awards
The benefits of a credit union having a place to bridge the gaps and training
for an unprecedented fifth year in a row.
healthy culture include: programmes implemented to help
Recent changes by retail banks to
improve customer experiences reflects a n Fair and ethical decision-making emphasise and enforce the desired
change in their priorities, now is the time processes which are customer behaviours, beliefs and attitude the credit
for credit unions to look for continuous centric union would like to adopt. Support
improvement. n Improved reputation change through sustainable policies
n Enhanced professionalism and developed in consultation with the Guide
CULTURE V GOVERNANCE integrity for Developing Policies available on CU
The Financial Stability Board states: n Effective controls Learn.
‘firm’s culture can defeat its formal n Strong oversight A healthy culture within your credit
governance.’ n Flexibility to adapt to challenging union will ensure that you enhance
Culture cannot be changed by simply situations relationships and maintain the trust of
introducing rules. The Board of Directors n Improved efficiency your members in the future.
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HOME LOANS CUSO –
INAUGURAL ANNUAL MEETING OF
PARTICIPATING CREDIT UNIONS
On Wednesday 16th October 2019, the Home Loans CUSO held
the Inaugural Annual Meeting of Participating Credit Unions
(PCUs) in the Midlands Park Hotel, Portlaoise.
The PCUs were represented by
directors, CEOs and senior
management. The meeting was
chaired by the Independent Chair of
the Mortgage Product Forum (MPF),
Billy Andrews. The agenda for the
meeting generated interesting
discussion. The below topics were the
key focus points.
1) Service Performance
Paul Farrell, Mortgage Hub, gave an
operational and financial
performance update on credit union
recruitment and home loan activity
by the PCUs.
Frank Doherty, Mortgage Hub,
presented a summary of the
Operations and Service Assurance
Green pins reflect 17 credit unions live on the
Review Report completed by the
service, with assets of €2.2 billion
Risk & Advisory Consulting Services
of the Accountancy Firm BDO.
OranGe pins reflect 12 credit unions signed up
for the service (but not yet live) with assets of
Billy Andrews, Chair of the MPF, set €1.5 billion
out and explained the key Business,
Strategic and Financial Priorities for
2020.
CP125 – Consultation on Potential Changes to the Lending
2) Outsourced Service Provider
Framework for Credit Unions
Mark Hyland, Link Asset Services
(Link), outlined how the service is The Credit Union News, Issue 11 - September 2019 published by the Central Bank of
working to date and highlighted the Ireland (CBI), explains how the proposed changes to the lending framework (CP125)
core steps that they support within are intended to support diversification in credit union loan portfolios. They would do
the service. so by allowing those credit unions with sufficient financial strength, competence and
capability to undertake additional home mortgage and commercial lending while
3) Mortgage Market & Trends effectively managing duration and concentration risk.
Michael Dowling, Dowling Financial, Among the proposals, the CBI proposed the removal of the existing lending maturity
presented on the mortgage market limits and the introduction of concentration limits, on a tiered basis, for house loans
perspective and outlook for 2020. and commercial loans expressed as a percentage of total assets.
The regulations are expected to commence following an appropriate transitional
4) Regulatory Expectations period. Should your credit union take the decision to engage in mortgage lending and
Bill Hobbs, Central Bank of Ireland, avail of the proposed concentration limits
updated the PCUs and spoke about arising from CP125, please don’t hesitate Mortgage Hub Contact Details:
key areas for credit unions to to contact the Mortgage Hub for Phone: 01 614 6973
prioritise when considering information on the Home Loans CUSO
Mail: mortgagehub@creditunion.ie
mortgage lending. Service.
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ommences!
Battle C
2020 SCHOOLS QUIZ
School children around the country are Communications, Paul Bailey said: About the All-Ireland Schools’ Quiz
getting ready to do battle as the Credit “We’re putting the war cry out for The quiz is divided into two sections;
Union Schools Quiz returns for 2020. children and schools to do battle in this Competition A for children up to 11
Credit unions on the island of Ireland are year’s quiz. It’s a fantastic opportunity years and Competition B for children
encouraging schools in their local for schools to nurture a culture of between 11 and 13 years. The winning
communities to get fighting fit and claim partnership among students, and we teams at the national finals will receive
victory in the 29th annual Quiz. As usual, would really encourage all schools to get €1,250 per school, with the runner up
the Quiz will culminate in a fiercely registered for the 2020 event. A core teams in each category receiving €750
fought national final at the RDS, Dublin in focus of this event for children to gain for their schools, adding up to a
April 2020. experience at teamwork to help equip fantastic prize fund of €4,000. Local
This year’s theme is ‘Let the Battle them with the skills necessary for and regional winners will also receive a
Commence’. A photoshoot to officially successful teamwork in the future.” range of prizes.
launch the Quiz took place with Dublin’s Last year, the winning schools were n Local quiz winners go through to the
Viking Splash on Grand Canal Docks in Quay National School, Ballina, Co Mayo regional final, and the regional
late October. in the under 11 years category. St winners and runners-up will compete
Each year around 25,000 Cronan’s Boys National School, Bray, Co for the national titles in April 2020.
schoolchildren take part in the Quiz. Wicklow claimed victory in the 11-13 n Local winners will receive prizes from
The Quiz begins with a knock-out stage years category. The runner-up teams their local organising credit union.
at local level which takes place in late were Dromclough National School, n Regional winners will also receive
January or early February. The winning Listowel, Co Kerry in the under 11 years prizes and their schools will receive
teams then progress to the regional category. St Joseph’s National School, cheques or a cash prize.
knockout stage in late February or early Skibbereen Co Cork and St Colmcille’s n The national winners and runners-up
March. National School, Mullingar, Co receive a silver salver, significant
The winning teams from the regional Westmeath were joint runners-up in the personal prizes for each team, and
stage will then make it through to the older age category. their schools are each awarded a
Grand Final in April 2020. Here they will Registration for the 2020 Schools substantial cheque.
be pitted in a nerve-wracking battle of Quiz is now open. Children interested in n Every team competing receives a
the wits against a number of other taking part can also log on to special certificate marking their
formidable teams of four. Today FM DJ, www.creditunion.ie and achievement.
Fergal D’Arcy, who was a huge hit at last brush up on their
year’s final, returns as Quizmaster this knowledge via an
year. online,
Speaking about the Quiz, Irish League interactive
of Credit Unions (ILCU) Head of quiz.
CU FOCUS WINTER 19 :: 17You can also read
