Industry Focus

5 in 5 series with Elizabeth Crouch AM on why the Mutual ADI sector is embracing technology and innovation

Published on September 21, 2023

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Few can claim to have careers as diverse as that of COBA Chair Elizabeth Crouch. From leadership roles in government, to leading an industry body and now leading company Boards, Elizabeth has decades of experience in shaping organisational cultures and leading high-stakes teams, united in purpose and chasing a shared goal.

In this 5 in 5, Elizabeth speaks about COBA leading through a period of great change in the operating environment. She credits customer-owned and mutual banks for being advanced in their ESG thinking, in rapidly responding to escalating cyber threats and in remaining steadfast in their customer centred focus, a focus which always stands the sector in good stead. She also discusses the challenges and opportunities ahead for the sector and explains why technology will play a strategic role as the sector navigates a complex and changing future.

You have an illustrious career with many senior roles across several industries. Can you tell us about your journey and what have been the highlights?

Careers rarely pan out as you imagine, and that’s certainly been the case for me. At 17, I started my career in government, working in a people-facing role at a social security office. Dealing with complex and deeply personal issues for those clients taught me a lot about the importance of being both sensitive and practical.

My next big career move saw me leading the building and construction division of the federal industry department, a role which opened the door to me being appointed as CEO of the Housing Industry Association. As the first women to hold that role in the history of the Association, it was quite momentous – for me and the builders!

In this the now third stage of my career, I’ve had the privilege of leading and serving on various boards spanning industries such as transport, higher education, health, and technology. Each of these roles has provided me with valuable opportunities to develop strategy, foster organisational and cultural change and position these companies and organisations for greater success.

In terms of highlights, I’ve had the honour being a Deputy Chancellor of a university, of chairing the Board of children’s hospitals and the board that delivered Sydney’s Opal card, which was a transformational piece of technology infrastructure for the city and its people –it’s not often that one gets to be a part of something like that.

I’ve also had the opportunity to buy and sell companies as a non-executive director in the listed company space, great experiences that teach you much about how people perceive value.

How would you describe your leadership style and how you lead others?

For me, leadership is all about building great teams, teams that work with a shared purpose and shared values. I aim to be ‘inclusive’ and ‘collaborative’ in my leadership style, always seeking to take people on a journey and make a real and positive impact.

During my time chairing the board at RailCorp, I learned that it’s often the quietest people in a room who are deeply reflective and highly attuned to what’s really going on. As a leader it’s important to be able to identify those people and encourage their highly valuable contribution. By not asking or having those conversations, we can miss meaningful insights or key observations that can be the difference in achieving real and lasting change.

Focusing on the Mutual ADIs sector and your role as Chair of COBA, how do you see the financial services industry evolving over the next five years, and how do you think Mutuals can play a role in shaping that evolution?

Customer-owned banks have made such an extraordinary contribution to Australia caring for their customers and their communities, a commitment they have demonstrated for over 100 years. They’ve been diligently going about this, often under the radar, but they are now really coming into their own with the increasing focus on purpose driven businesses.

Operating on a profit-for-purpose basis, customer owned banks continue to deliver great services to their customers and remain very involved with regional communities. Many of them had a bond historically with professions such as nursing, the military, or state emergency workers, and they remain uniquely connected to their customers. The sector has also been forward thinking in their commitment to ESG, supporting climate change and affordable housing as well as a range of projects important to their community. So, they’re well positioned now and heading into the future.

Regulation and prudential control continue to impact the sector with external shocks like the collapse of Silicon Valley Bank in the US sending shockwaves internationally. Australia has an extremely well-regulated banking and financial sector which gives customers comfort in their banking choice. COBA advocates on behalf of the sector to ensure regulators understand the nature, opportunities and risk profile of customer owned versus shareholder owned financial institutions. We want to ensure the sector is appropriately regulated and well positioned for growth and innovation.

What role does technology play in the operations and future growth of COBA and the mutual ADI sector?

Technology and innovation are crucial as customer-owned banks and mutual ADIs endeavour to meet customer demands. Today’s customers are tech-savvy and demand tech-savvy solutions. As a sector, the technology is there for us to harness and build innovative solutions and offerings for our customers. The challenge is that these offerings also need to be as secure as possible, keeping cyber threats and scams at bay.

With smartphones putting the kind of computing power never thought possible into everyone’s hands, designing core banking solutions and systems to deliver the functionality demanded by customers while enhancing security, remains a key priority.

Growth also means protecting against new threats and the sector needs to leverage technology to continue to anticipate and mitigate emerging risks. Sector leaders must remain vigilant, keeping up with new tech and developments and exploring opportunities for collaboration: both within the sector and beyond and with the right technology partners.

Managing third party suppliers, IT and network-related risks will be key and it will be crucial for customer owned banks to partner with trusted advisors and experts. There is a lot of opportunity in this area and the right strategic partnerships can help the sector further strengthen its defences.

How do you prioritise and manage risk in the financial services industry, and how does it influence decision-making at COBA?

Much of how we assess and manage risk is driven by the nature of markets, how we manage credit, liquidity and operational risks and how we’re regulated. The financial services industry has a host of prudential standards and reporting obligations that stem from frameworks and structures designed to safeguard the sector against key risks.

While in the past, these standards were predominantly about regulating financial risks, newer prudential standards cover a broader range of issues around governance, cyber security and operational risk management. Regulators are focussing on how boards are composed, the skills around the table and how they regulate and govern their financial institutions.

Key risks are of course, fraud, financial and cybercrime. Cybersecurity is an area that’s close to my heart. After recognising cybercrime as an existential threat to business and the community, I returned to university after nearly 4 decades, completing a Master’s degree in cybersecurity, something that has proven highly valuable as we support the sector in responding to these threats.

COBA does a lot of work with members around cybercrime. We collaborate and work with bodies like the Australian Financial Crimes Exchange in the fight against financial and cybercrime, sharing intelligence and countering threats. Yet, for all this effort, some customers remain vulnerable, especially when emotions are being exploited including through romance scams.

The sector is also closely monitoring international trends in this area including how regulators are responding. In the UK for example, regulators have moved to penalise banks that allow these transactions to proceed, but the jury is still out on where the obligation lies when against all advice from their bank, a customer still chooses to transfer money. Aligning risk and regulation and achieving the right balance will be key to how customer owned banks best support their customers and thrive into the future.

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Elizabeth Crouch
Chair, Customer Owned Banking Association (COBA)
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