STOCKHOLM, Sweden—Canada’s largest credit union has even larger ambitions for the role it believes it can play, and one of the reasons it is looking to grow is to have an even greater impact at scale.
As Vancity Credit Union’s CEO, Wellington Holbrook, told the World Credit Union Conference, “We have a dream around how we might transform the economy to make it more equitable for everyone.”
But it’s also a dream being affected by geopolitical realities and the realities many of its own members are facing, he said.
Vancity is well-known in its Vancouver and Southwest British Columbia market, in part because it annually contributes 30% of its profits to reinvestment in its communities. That practice, Holbrook said, has meant hundreds of millions of dollars have gone back into supporting local organizations.
Holbrook, who has been with Vancity Credit Union for 18 months, said Vancity “leans differently, works differently and that is a major asset.”
From the Oldest to the Newest
As he would outline during his remarks, its vision for the positive role it believes it can play spans the country’s oldest native citizens to its youngest immigrant citizens.
As Holbrook reminded, Canada is a country that’s long been very open to immigration and has been the recipient of many refugees, many of whom have been challenged to integrate into the banking system, he said.
Holbrook said Vancity responded by offering a program to provide banking services and for immigrants that includes access to credit.
‘Very Profitable Business’
“Actually, it’s proved to be a very profitable business for Vancity,” Holbrook said. “It goes to show that when we are doing good it doesn’t have to mean giving away business. In fact, it’s just how we do business differently.”
When it comes to doing things differently, Holbrook noted Vancity began talking sustainability and climate change long before many had heard of the terms, and in the 1980s the credit union became the first provider of sustainable investments in the country when it introduced a series of funds.
“We were committed to ethical, sustainable investing long before it was cool and long before a lot of folks really maybe appreciated how important that was,” Holbrook said. “In 2008 Vancity was one of the first financial institutions in the world that was declared carbon neutral. These are things that are just in our blood.”
Thinking Differently
Noting all of the change in the world and particularly in Canada’s neighbor to the South, Holbrook shared, “It’s time for us to reinvent ourselves too. As cooperatives, we need to be thinking differently about the challenges we are facing in the future. The world is going through a massive geopolitical shift and change, particularly if you are in the vortex of the United States–and that’s affecting Canada in a very specific way—is really changing our worldview around the future.
“We are seeing disruptions around global trade flows, many in which have been in place for decades, where we’ve seen quite a bit of prosperity created by global trade. And now we are at risk of seeing much slower growth.”
That slower growth, he said, will raise unemployment and mean less government assistance is available, which will have its greatest negative affect upon the bottom income-earners.
Big & Meaningful
“These things are big and meaningful and they require solutions and I’m here, in part, to make an appeal to all of us as cooperatives and credit unions that it’s time for us to stand up again,” Holbrook said. “For many of you, your credit union was rooted in a time where your community needed change, it needed support and it needed help. That might even be very recently. But for many of our credit unions that have become more mature, we have perhaps become a little bit complacent about how we’re seeing ourselves play a role in supporting our communities. Once again, they’re going to be needing us and the call to action is here. Right now is the time for all of us to be thinking about how we’re doing things differently.”
Losing Sleep
Holbrook said that today some 40% to 60% of Canadians say they are losing sleep over money and are very concerned over their future and the future of their children. What many had counted on as a sure thing for retirement is anything but sure, he observed.
“They are desperately looking for hope for a brighter future. And credit unions are one of those places they look to for leadership,” Holbrook said.
Not About Being the ‘Nice Bank’
Holbrook said credit unions cannot continue going on “as being kind of like other banks, but a little bit nicer. We’re not going to be providing the hope and optimism that so many people need today.”
Holbrook said credit unions are rooted in providing community resilience, and because CUs aren’t subject to the “whims of shareholders and the best quarterly returns,” but instead their member-owners, they are able to better serve their members.
While that remains a foundation, he called on credit union leaders to think differently around how they build their businesses.
“We do see the next decade as being a very significant area of transformation for us,” Holbrook stated. “What does that mean? It means we are going to start aggressively growing our business because, one, we think we need to be larger so we can support more people in in this challenging future. But it goes beyond that. We’re thinking about how we’re evolving our business and operating model and how we redeploy our capital in very different ways, creating more disruptive products.”
Vastly Different Markets
Holbrook said part of that work is finding ways to better serve underserved markets and small businesses.
It’s all part of preparation for a vastly different financial services landscape, according to Holbrook, who said Vancity is already “redesigning our business.”
“We’re very bullish and ambitious about what that could look like. But make no mistake–we know we’re going to be making mistakes as we learn into that future. That is my call to action.”
How to Prioritize?
All that said, Holbrook was asked how Vancity goes about prioritizing where it invests.
“We do have this ridiculous ambition that we want to change the world, but if you try to change everything, ultimately change nothing changes,” he said. “So, we did make some very difficult choices and we actually narrowed our focus into making changes in four key areas.”
Areas of Investment
Those four areas are:
- Investments in the indigenous economy
- Affordable housing. Holbrook said in the Vancouver market it requires a household income of at least $250,000 to have any shot of buying a home.
- Climate
- Safe access to financial services
