Australia’s largest credit union witnessed a small drop in profit for the year ended 30 June 2018 following investment in digital technologies.
Credit Union Australia reported a net profit after tax of AU$54.79m (£30.14m), down 1.9% from the previous year. The credit union, which dates back to 1946 and provides financial, health and insurance solutions to around 470,000 Australians, said the slight reduction followed investment in innovation and digital initiatives.
Retail deposits grew by 5.3% for the year to a record $9.22bn (£5.07bn) while loans under management were up 6.7% to $12.30bn (£6.7bn). Assets rose 4.1% to $14.32bn (£7.8bn).
During the same period, the credit union saw a net increase of 20,008 banking members.
CEO Rob Goudswaard said improving the digital offer has been a key focus for the mutual.
“We now offer members a full suite of digital wallets across Apple, Android and Samsung devices,” he added. “We’ve delivered an updated mobile banking app provided by Kony, who’ve received international recognition as a leader for their mobile app development platform.
“Members are benefiting from faster payments through CUA being an early adopter of the New Payments Platform (NPP), with 16,500 PayIDs registered by our members in the first four months. And we’ve had outstanding feedback from the 2,000 members piloting our iM CUA chat-style messaging app, which is the first innovation to come from Pivotus Inc, the international banking collaboration based in Silicon Valley that CUA joined this year.”
Mr Goudswaard added that member growth had been driven by the digital changes, brand awareness campaigns and an increase in the total value of new lending.
Meanwhile, CUA Health, an insurance business which forms part of the CUA Group, saw an increase of $1.49m on its previous full-year result, to a $8.99m Net Profit after Tax (NPAT).
“Affordability is the biggest issue facing the health insurance sector but I’m pleased to report that this year, we passed on our lowest average premium increase in almost two decades,” said Mr Goudswaard.
“We rolled out a refreshed CUA Health mobile app, and also launched three new lower cost hospital cover products this year. Our new hospital and extras package, aimed at first time buyers and young people, has a bonus feature to top up any gap on the first few claims.
“Finally, we entered into a collaboration with fintech Flamingo AI and recently began a pilot of its chatbot “SAM” in our CUA Health insurance business. This is not a replacement for our human service team, but should boost the number of new policies taken out via digital channels.”
A recent customer satisfaction list by Roy Morgan ranked CUA Health third on its customer satisfaction ratings for health insurers.
“Looking to the year ahead, our focus will be on delivering simple, competitive and effortless products and services, while maintaining the personalised service and care that members know and trust,” added Mr Goudswaard. “Our first priority is to deliver a seamless, streamlined end-to-end deposit process, with simplification of our home loan process to follow.
“I’m excited to share that we will shortly begin a wider rollout of our iM CUA app, progressively offering this to all current and future members with compatible Apple and Android devices.
“On the regulatory front, we are continuing to work with our industry bodies and government towards the legislative reforms that will give mutuals the ability to raise capital for the first time. We are expecting draft legislation to be released this year, with legislation to hopefully be passed by Parliament in early 2019. This is a huge win for mutuals following the Hammond Review into access to capital and will give us more flexibility to seize on future opportunities.”
