With shiny, new flagship offices in the heart of Adelaide’s CBD, Steve Laidlaw, the new Chief Executive Officer of People’s Choice Credit Union is determined to be different. There’s no staid counter service or cold marble lobby signaling that you’re in a bank.
Laidlaw, just three months in the job, doesn’t even have an office. With $9.6 billion under management and 345,000 members nationally, it’s Australia’s second largest credit union, and Laidlaw wants more people to know about its reach.
“We punch well above our weight. People’s Choice doesn’t get the profile it deserves as an employer or a significant contributor in South Australia. I think it’s partly because the media tends to follow those organisations that are listed on the ASX, for whatever reason. But we’re an organisation with a good story – we are one of the largest employers in the state and we contribute a lot to the community and social good through our work with Cancer Council SA, The Big Issue and many others.”
Laidlaw sat with InDaily in one of the meeting spaces at the new 50 Flinders Street headquarters.
Lee Theodoros: You’ve been CEO since 11 January 2016. It’s early days but what do think you can bring to the table at People’s Choice Credit Union?
Steve Laidlaw: The key point of difference for People’s Choice and the mutual sector more broadly is that absolute alignment between our ownership structure and our customers. They are one and the same.
I think if you look at what’s been going on recently with the larger banks, the big four, there is that tension between trying to achieve a shareholder return and doing the right thing by your customers.
For us it’s all about the member. It’s the whole reason we are here. I’m going bring a laser-like focus to that and reinforce that through everything that we do.
How does a small financial institution based in South Australia compete with the big four?
SL: The big four are in a very dominant position. They’re nearly 90 percent of the market and everyone focuses on the strengths that they have in terms of scale and their product stretch and everything else. But for us again, it’s really reminding people of the genesis of our sector and it was there to support members and prospective members as they try to improve their lives and the lives of their families.
If we don’t look after our members, our customers, and look after them well, we might as well not be here.
… at least once every few weeks I sit in the midst of the call center and listen to the various calls that are going on. I get some of my best information that way.
Banking has become very much an online service industry – how important to People’s Choice is the online offering versus shop fronts?
SL: The real dilemma and challenge that all banks are currently facing is bricks and mortar versus digital. If we look at the demographics within our membership base, we typically have our more elderly members wanting to use branches whereas at the other end of the spectrum the new millennials, for example, see no reason whatsoever why they should even have to step foot in a branch. You have those two poles apart.
So it’s trying to get that balance right and we’re all about providing a variety of channels through which our members can interact with us. I suspect over time there will be a shift to a greater level of digital offering, and the types of activities that occur in branches, which will continue to be very important for People’s Choice Credit Union, the nature of those transactions or interactions in the branch will change to be ones perhaps of more consultancy and that type of engagement rather than the typical transactions around banking that we have seen in the past.
Are you actively doing anything in the digital area, in terms of strategy or hiring staff to address the demand for online features?
SL: Yes, the short answer is yes, we are. I think it’s a very important part of our strategy because our members are demanding it, particularly the younger demographic, and again it can be quite complementary to our in-branch experience. People often think it’s one or the other but there’s no reason that both can’t interact. Our new flagship branch at 50 Flinders Street highlights where the digital can meet the traditional and it can be quite a comfortable marriage.
The focus for us again is ultimately trying to allow our members to do everything online that they could do in a branch and that’s sort of the ultimate objective.
For us, for example, we’ve been at the forefront of new payments technology. I think we were one of the first to have what we call ‘ready to pay’ which allowed people to pay – it’s starting to sound a bit commonplace now – but to use mobile phones to make payments, either with an android phone or with a PayPass attached to an IOS device is the most typical way and again we’re partnering with Cuscal at the moment to broaden those sorts of payment options, So for us, digital is very, very important but it is not necessarily going to be at the expense of the more traditional interaction points such as branches.
The People’s Choice model seems to resonate with younger people – significantly, about 40 percent of new members are under 30. Is there a deliberate attempt to capture that market? If so, what are you doing to appeal to young people?
SL: If you talk to an older demographic, people understand what a credit union stood for and what the point of difference is compared to the big four banks or non-credit union organisations. There’s been a concern and a challenge that perhaps that understanding hasn’t been there at the younger demographic – but I think that might be turning around a bit now.
Studies have been done on expectations regarding corporates from new millennials and they’re asked to list their top three things in terms of what corporates should do and virtually every study will say that corporates should be responsible and provide social good. Ours is an organisation which does provide a lot of social good through Cancer Council SA, The Big Issue, Riding for the Disabled, HeartKids and a number of others. We contribute to the community at 12 times the national average as a percentage of our profit. It’s very much a part of our DNA and we see that as our dividend back to the community in one sense.
I think social media and higher levels of transparency are only going to strengthen that because we frankly have nothing to hide. We treat our members well, we always act in their best interests and we treat our staff well.
We certainly do have our marketing and our messaging and our product development tailored toward a younger demographic as well, so we’ve had a number of accounts that we’ve developed for the younger generation like Activate and Zip which try to have that appeal to the youth market. It is important to keep renewing. On the way through you need a good mix and I think around 40 percent of our new members are under 30. So I think we are doing well in that space and having genuine appeal to the younger generation.
The offices at 50 Flinders Street are certainly not the norm for a banking institution. What’s the thinking behind the new address and the innovative fit out?
SL: We’re very proud of our new head office and the move has provided us the opportunity to bring our organisation in Adelaide, which was spread across three different offices, into one head office and to bring the team together. That was very much part of our thinking but we also wanted a fit-out that was not the marble and granite and gold stamp that everyone talks about. It was very much in keeping with the fact that we are certainly custodians of member funds but will provide more agile working and a comforting environment that would also facilitate efficiency. The footprint we’ve taken up is ultimately about one third less than we had previously.
Do you have an office or are you nomadic like your staff?
SL: I sit on a different floor every day – we go across floors 10 to 14 here – and at least once every few weeks I sit in the midst of the call center and listen to the various calls that are going on. I get some of my best information that way.
I think initially I was a bit lonely but now people come up to me and it’s really quite enjoyable meeting new people every week as I move around the building.
I really think you have to lead from the front, so if you’re expecting everyone else to do it, you have certainly got to do it yourself … it takes some adjustment but I’m actually enjoying it a lot.
People’s Choice is a national organisation with a head office in South Australia. Why the strong commitment to the state?
SL: South Australia has always been the home of People’s Choice in its various iterations. It’s the product of a range of mergers that have happened since 1949 so its roots go a long way back and of course it’s stretched out and expanded into the Northern Territory when it merged with Northern Territory Credit Union awhile ago and it’s now expanding in Victoria but we’re very proud South Australian organisation.
You have lived and worked overseas and interstate, in Vancouver and Melbourne as examples. Are you surprised there aren’t more corporate headquarters in South Australia?
SL: It’s disappointing that there are fewer and fewer large head offices of note in Adelaide. We’re certainly committed to remaining one. I’m Adelaide born and bred. I lived interstate and overseas for a little while but we’ve been back now for 10 or 11 years and I think Adelaide and South Australia are just the best place in the world to live and certainly the best place in the world to bring up a family. I’ve got a 15-year-old daughter and an 11-year-old son and we love it here. On a day like this, why would you live anywhere else?
There’s a vibe in South Australia that other states tend to write us off. Where do you think SA can be most competitive?
SL: We do round ourselves down a bit and we do worry about what others are doing. We should just focus on what we do well and be proud of what we do well. Again we’re in one of the best lifestyle cities in the world, we have great schools and we do have a good economy. Everyone talks about unemployment rates being high relative to the national average but if we look at it in the context of the broader economy, we’re doing very, very well. I do think we have to be a little bit adventurous. I think we have to take some risks but we also need to be more confident in the way we approach things, and have a brighter outlook and be thankful for the things we have rather than bemoan the things we don’t. I genuinely think we’re too tough on ourselves.
People’s Choice employs almost 1000 people in the State and even more across Australia. With increased automation of everything, including banking, will you be hiring more people?
SL: Yes we will be. Certainly growth is one of our key areas of focus. In banking, in order to survive you need to keep growing – as you do in most businesses. Our loan book is growing at around 10 percent per annum this year – we’re doing very well, we’re outperforming the market. Sure we’re always looking to be as efficient as possible and I think the shift to digital will create additional efficiencies for us, but again I think given our growth momentum we’ll be continuing to hire for some time.
Any plans to take business offshore?
SL: We’ve seen some of the majors get involved with offshoring, putting call centers and other support centers onto the subcontinent and outside of Australia, and I can tell you with absolute certainty that is not part of our philosophy. We will continue to hire Australians and not offshore any of our activities. Our growth strategy will require us to take on more staff but we’ll always look to be as efficient as possible.
SA is in a downturn – how do we get out of it?
SL: It’s the question on a lot of people’s minds, a lot of business leaders and a lot of politicians. I think you’ve got to look for new growth opportunities and continue to trust in yourself and trust in the state’s capabilities. For us, I need to focus on my business and make sure our business continues to be robust and a strong contributor to the SA economy in terms of employment and members’ and prospective members’ needs, So, all I can say is continue to focus on the positives and continue to grapple the opportunities. Don’t be afraid to take some risks.
South Australia can be a little conservative in terms of its approach sometimes and I think there is an opportunity for us to be a little more adventurous and perhaps out-of-the-box thinking around other opportunities that might arise.
Read more of our “10 minutes with…” interviews here.
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