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Credit Union Australia (CUA) has announced that it will begin trading under a new name, Great Southern Bank, as it moves to cater to a younger audience.
CUA’s CEO, Paul Lewis, said the bank had conducted research which showed that it needed to change its name from a ‘credit union’ to a ‘bank’ due to younger adults not having a strong understanding of what a credit union was or how it operates.
He said: “This is vital so that more members and younger generations understand that we offer the same products, services and security that a bank does – with the benefit of reinvesting 100 per cent of our profit back into our customers.
“Reflecting our strong and proud Australian history, we will begin trading as Great Southern Bank later this year,” he said.
Mr Lewis added that along with the new name, the lenders would also offer “innovative” and “exciting” products and services aimed at helping “Australians achieve financial security and their dreams of home ownership”.
“This is a great move for our members – current and future – who will enjoy even more value, and we look forward to sharing more details in the coming months,” he said.
Mr Lewis said CUA would remain owned by its customers.
“At a time when high-profile new entrants to the banking sector are struggling, we are celebrating 75 years of customer-owned banking.
“We are a longstanding, trustworthy and vibrant alternative to the big banks, and this move will put us on the radar of younger generations who just haven’t been sure what ‘credit union’ means,” he concluded.
The move comes with a swathe of activity and changes in the customer-owned banking sector.
Victorian-based Pulse Credit Union Ltd and Teachers Mutual Bank Ltd (TMBL) recently announced that they had entered merger discussions and begun due diligence, which comes following predictions that players in the mutual bank sector would need to consolidate to survive.
In a speech delivered to the Customer Owned Banking Association (COBA) 2020 Convention in December, the deputy chair of the Australian Prudential Regulation Authority (APRA), John Lonsdale, suggested that it would be “prudent” for smaller banks to “consider the preparatory steps required for a merger or transfer of business” should they face a severe financial stress.
In his speech, Mr Lonsdale outlined that 2020 had been “a very challenging year for everyone, confronting the Australian community with firstly a health crisis and then testing the financial system with a resulting economic crisis”.
He warned that a large number of the small banks – and not only mutuals – have “business models that are challenged”, which could be exacerbated by the fact that consumers increasingly expect a strong digital banking offering (with relevant cyber security), which might be hard for cash-constrained mutuals to provide.
“Therefore, it is prudent that such ADIs consider the preparatory steps required for a merger or transfer of business, including criteria to identify potential partners at an early stage rather than wait for a deterioration in financial position,” he told the COBA conference.
“Hopefully, recovery plans never need to be enacted, but it is important for all APRA-regulated entities, even smaller ones, to ensure they have an effective plan in place if needed – and it is APRA’s role to supervise that.”