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The future of Australia’s mutual sector: our top 5 COBA 2024 insights

Published on October 8, 2024

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This month’s annual Customer Owned Banking Association (COBA) convention drew an impressive cohort of attendees, including the industry’s best and brightest, as leaders came together to discuss the sector’s most pressing issues. Under the theme Ignite the Future, leaders explored the current challenges, best practices and opportunities, all aimed at generating actionable insights and fostering positive change.

It has been widely acknowledged in recent years that Australia’s financial services sector has been under constant attack and scrutinised closely by regulators and the public alike. Even the big four, including NAB, have confessed how tough it has been, asserting that “every bank is being attacked all the time,” a situation NAB has labelled “asymmetrical warfare”. Unfortunately, this is not only a problem for the major banks but also felt across the sector, including by Mutual ADIs. The current challenges leaders face emphasises the need for collective vigilance and innovative cybersecurity measures to uphold the safety and security of banking.

Against this background, the main discussion of the day at this year’s COBA convention was the future of innovation and technology and how it will reshape the financial services sector. The industry discussed AI at length regarding its impact on the sector – both good and bad. It appears that leaders are working hard to balance the hope and concern it raises. They have one eye trained on what’s coming next, yet they tread with caution as they witness an increase in AI-driven cyberattacks, new regulations changing daily, and a thorny cybersecurity landscape. A recent Gartner survey revealed that AI-enhanced malicious attacks are the number one emerging risk for enterprises, and the mutual sector is not immune to this.

Yet, despite the various challenges, the future is bright. So, in summary, here are the standout themes that emerged from this year’s dialogue.

Our top 5 themes that emerged from COBA:

1. All eyes are on AI

Futurist and innovation expert Dr. Bruce McCabe highlighted AI’s potential to positively revolutionise member services through human-like avatars, offering personalised and efficient interactions. However, AI is also causing cyber chaos, which must be faced head-on. According to Deloitte, AI is augmenting attacks. In their recent study, over 90 per cent of respondents  indicating they had at least one compromise. AI is double-edged sword, capable of both protecting or attacking enterprises, but there is a silver lining – with automation, AI can enable enhanced threat protection.

2. The rise of green loans

The Australian Government is collaborating with financial institutions to expand sustainable funding options for homeowners through a $160 million commitment via the Clean Energy Finance Corporation. The new consumer loans will empower households with access to discounted finance for energy-efficient home improvements.

Trust reappeared in session titles, such as Crafting trust: the future of reputation management, underscoring how critical trust is the financial landscape. The key to future business success is a trusted workspace which can only be achieved when there is a clear vision implemented that integrates proactive security measures, hybrid work-friendly measures, and tailored compliant solutions aligned with business objectives. From trusted workplaces to partnerships, trust is critical in all that we do.

4. Leaders are embracing a people-first, cyber-aware culture

According to expert leadership Dr. Kirsten Ferguson, leaders must lead with empathy to build trust to foster a thriving organisational culture. A people-first culture can also support the adoption of new initiatives. According to McKinsey & Co, businesses that embrace a people-centric mindset while applying new technology solutions are 4.2 times more likely to outperform their peers, achieving an average of 30 per cent higher revenue growth.

5. Security is a shared responsibility

Cybersecurity isn’t just the job of leaders. The human element of cybersecurity cannot be overstated and in fact, the World Economic Forum has found that 95 per cent of cybersecurity issues can be traced back to human error. In theory, all workers should be held accountable to uphold cyber security initiatives, but in practice, it’s still challenging to implement.

What does this mean for customer-owned banks in the future?

People are at the core of purpose-led banking and though the sector continues to evolve and modernise, this will never change. As COBA’s Chief Executive Officer Michael Lawrence said in this year’s welcome, the customer-first ethos that was instituted almost 180 years ago continues to drive customer-owned banks forward. In this current cyber landscape, leaders of customer-owned banks and all financial institutions endeavour to protect their customers from scams and data breaches.

In summary, the mutual sector is facing one of its toughest periods, yet optimism persists. The value of AI-powered workplace tools and the transformative potential of AI is vast, but its potential must be highlighted alongside the challenges of AI-driven attacks. Trust is the cornerstone of these discussions, essential for AI adoption, identifying malicious actors, nurturing customer relationships, and selecting trusted experts to guide modernisation and cybersecurity efforts.

To learn more about the state of the mutual ADI sector, download our latest whitepaper here: Securing the digital future for Mutual ADIs and their members through a human-centred approach.

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