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NOVA, a new Alliance Bank®

29 May 2018 |Industry Updates
The nova alliance bank team celebrating their re-branding.

NOVA, a new Alliance Bank®

29 May 2018 |Industry Updates

NOVA is the most recent credit union to join the Alliance Bank® group. Like all mutuals looking to secure a strong and vibrant future NOVA’s board considered many options, their priority was to find a growth strategy that would enable them to retain their member capital, independence and staff while being able to provide members with an enhanced range of products and services. David Franklin, CEO, talks to us about why his Board chose the Alliance Bank® solution and what it means for their future.

David Franklin
David Franklin, CEO talks about the future.

Firstly, can you tell us why your Board decided to join the Alliance Bank® group?

The issue of longevity had been brought to our strategic planning sessions over the past couple of years. We felt we could not continue to grow strongly long term without major change.

The cost of meeting government regulation and Capital requirements looking forward five years no longer stacked up. So we asked ourselves do we give everything to a competing mutual or have the best of both worlds. As an Alliance Bank® we continue as an independent mutual with Bendigo and Adelaide Bank taking over back office functions. The choice for us was a clear one to make.

Why didn’t the NOVA Board decide to merge with a larger CU?

We considered this option, but it meant we would have disappeared. Our Members could have always gone to another local Mutual but they have chosen us over the past 54 years due to the personal attention and the relationships formed.  During that 54 years our members have accumulated a corpus of capital that we want to continue to use for them.

Our members are not just one of a massive herd. Choosing the Alliance Bank® solution allowed us to stay exactly as we had been pre-alliance with the advantage of more products and services.

Importantly our culture and relationships remain 100% intact.

Which is more cost effective, merging or becoming an Alliance Bank®?

In terms of money spent with our Third Party suppliers and the hours spent to merge our data into the new entity we believe the spend would have been similar either way.

Did APRA compliance and regulatory requirements play a role in your decision?

Without a doubt our Board and senior management spent most of its time and effort meeting APRA requirements. We really wanted to spend the majority of our time assisting our members and growing our business. With the Alliance Bank® solution this is now possible.

How will this new paradigm change the role of Directors?

They feel dramatically unburdened. The focus can move to our purpose of helping our members rather than refining and adding to the 48 Policies we had to satisfy APRA.

How have your members and staff reacted to the change?

It’s early days, but we’ve had nothing but positive feedback. Existing Members have experienced no negative impact and they love things like the new banking app that we could not afford to give them as a stand-alone institution.

Under the Alliance Bank® solution you have access to your member capital. How do you plan to preserve it and still deliver against your community purpose?

Our intent is to assist our membership donating the interest we make on this money into local charities and investing in shared value initiatives that will benefit our communities.

What does the future look like for NOVA as an Alliance Bank®?

We now see a long-term future with enormous growth potential. With the ability to meet member demand for larger loans and deliver effective SME banking solutions a new market is available to us.No longer do we have to think what will APRA try to hit us with next, but how we can grow our business and assist more members.

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Bendigo and Adelaide Bank Limited, ABN 11 068 049 178 AFSL / Australian Credit Licence 237879. AWA Mutual Limited®, BDCU Limited®, CIRCLE Mutual Limited®, NOVA Mutual Limited® and SERVICE ONE Mutual Limited® (Alliance partners) are independent mutual entities that have formed an alliance with Bendigo and Adelaide Bank. AWA Alliance Bank®, BDCU Alliance Bank®, CIRCLE Alliance Bank®, NOVA Alliance Bank® and SERVICE ONE Alliance Bank® are trademarks of Bendigo and Adelaide Bank Limited.

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