The first day of AMI’s conference at Surfers Paradise (traditionally called "the winter conference") had a fascinating mix of analysis and case studies as well as a look into the future. And the standard was high. Here’s a snapshot:
On sub-prime and the credit crunch: Steven Anderson (Infochoice) presented his data on the disruption in the financial markets in the last 12 months.
- mortgage funding dropped by more than 50% in 12 months
- until September 2007 13% of all home lending was from securitised funds; this has all but disappeared
- the major 5 banks now account for 80% of all new lending
- the big 4 have increased their market share to 60% in the last 6 months
- the "flight to quality" by customers has taken the focus off pricing
- the nexus between the 90 day bank bill rate and home loan rates has been broken
Here’s the Implode-O-Meter tracking the US lenders’ collapse.
Margot Sweeny (Summerland) and Geoff Grant (CUA) gave case studies of their respective credit unions’ response. A common theme was the need to focus on costs, business processes and service delivery and the need to re-inforce with members the difference between mutuals and banks. The potential for high-level co-operative marketing was discussed. The CUA difference.
The discussion on marketing linked into the earlier talk by Charis Palmer (Banking Review) on disruptive innovation in financial services and new technologies for interacting with members. She talked about the need for "authenticity".
On governance: There was a case study on board disruption and another on the process leading to a merger.
But the last presentation (the Jack Ross Memorial lecture) by Wendy McCarthy was a great combination of "war stories" and lessons learned over a long career particularly with not-for-profits. She emphasised the need for boards to have a strong ethical framework and that boards should reflect the community they serve.
On director selection: first look at skills, then consider gender, race, cultural, age diversity. And include a thinker and a "wildcard" (a person who asks questions from left field). Never exclude a person who has no governance experience if they’re willing to learn.
Summary: a well-balanced and interesting day.