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Newsletter, December 2016

 

Message from the Secretary General

Unico activities 2016 in facts, figures and highlights

2016 has been a very active year for the Unico cooperation. We had 39 committee meetings and 83 conference calls, which is comparable with 2015. Nevertheless, we lost a full-time staff this summer when Mikko Knuuttila, one of our much-appreciated project managers, left the Unico Secretariat for a new challenge at Raiffeisen Bank International. Today, the secretariat employs 4.5 FTE.

Unico meetings took place mostly in Brussels (9) and Helsinki (8), followed by Paris (5), Frankfurt (4) and Vienna (4).

Highlights

We have had several significant events this year: the HR forum, the Unico International Learning Expedition, the Unico Innovation week, the Documentary Business Workshop and the SME Forum among others. These successfully brought together experts of our member banks.

I also would like to highlight the ‘pan European online e-payments’ project, that is developing a joint solution for banks to deal with PSD2. PSD2 will give new entrants to the market direct access to bank account information and enable them to initiate payments. The solution focuses on what banks can do to remain relevant in the payments area. Thanks to the commitment and enthusiasm of the project members we have come close to a final proposal. No matter the final decision, the project yielded valuable research and development information in the area of online business e-payments.

This summer, Unico’s focus was reviewed in light of the increased Unico activities and the changes occurring in the financial industry. The main conclusion of the review, which was supported by our governing bodies, was the need to focus our activities on five major challenges that co-operative banks are facing:

  • Joint business (raison d'être of the founding of Unico in 1977)
  • Digitalisation / innovation
  • Strategy under the new regulatory environment
  • Governance and supervision
  • Costs

This lead to a reorganisation of our communities into a three-level co-operation framework that aims to improve efficiency.

This change of governance has not proven yet to safeguard and push the Unico co-operation to the next level. Since we are all convinced of the value of co-operative banks and their importance in the European banking landscape, my strongest wish is for the Unico governing bodies to jointly explore potential ways in which they can strengthen and further develop the potential of this co-operation, bearing in mind the changed banking environment.

Let's guarantee together that our co-operative roots and our customer orientation will continue to make a difference.

On behalf of the Unico team, I would like to thank all members and supporters of the Unico community for their continuous commitment and dedication to the Unico cooperation.

Best wishes for the Holiday Season and a happy, healthy and successful New Year.

Geert van der Horst
Secretary General

 

Interview with Leonardo Rubattu, General Manager ICCREA Banca

Can you introduce yourself in a ‘Twitter-style' couple of lines?

I’m an ICCREA manager who works for a new model of credit cooperative system in Italy, that focuses on local needs as well as having an international approach using innovative instruments and methods.

You attended your first Unico Board meeting in Washington earlier this year. What were your impressions?

It was a very interesting and animated meeting. The discussion held in Washington mainly focused on the future of Unico Banking Group. Improving the effectiveness of the Unico working model and strengthening the impact of Unico activities on member banks' competitiveness and efficiency is the prior objective the association would like to achieve in the coming years. Getting started with Unico at this meeting with such a strategic agenda was a very stimulating experience. I had the impression that Unico is a very important place where main European cooperative banking groups can learn from each other.

In October, Iccrea Banca became the parent company of the Iccrea Banking Group and the reverse merger with Iccrea Holding was formalised. Can you elaborate on this?

The reverse merger between Iccrea Holding and Iccrea Banca is coherent with our 2016-2018 strategic plan, which is strongly focused on simplifying the corporate architecture of the Group for purposes of greater efficiency and ability to respond to the changing requirements of the market. The operation carried out, furthermore, ensures the operational continuity and recognition of Iccrea Banca on the national and international markets.

In the very changing European banking landscape, how do you see the future of co-operative banks in Europe?

The cooperative banks need to focus on two directions that, in some ways, need to be integrated. On the one hand, it’s fundamental to be innovative and follow the developments of  new markets, in terms of technical resources and strategic ways to involve customers and partners. On the other hand,  European cooperative banks have to cooperate and work together: this is the best way to boost forces and resources for continuing to improve our services to local banks.

Iccrea joined the Unico Banking Group in 1992. What are the benefits of Unico for Iccrea ?

Iccrea  exploits its  membership in Unico in several and different aspects. First of all Unico represents for us a 'cultural enhancement'. Attending Unico governing bodies meetings helps Iccrea to receive important information about what is going on in other European countries from a political, regulatory and strategic point of view. Such information is essential for foreseeing future trends that could also affect our national banking industry and prevent eventual negative effects that could impact our business.

Secondly Unico grants Iccrea with the opportunity to progress through 'training and exchanging experiences'. Meeting other cooperative banking groups allows Iccrea to compare its strategy, its products and its working mode with the European benchmarks. Some initiatives, such as the Learning Expedition that Unico has been promoting in the last few years represent a very important tool for supporting this specific goal.

Last but not least, Unico is useful for 'doing business together'. Unico allows member banks to launch common operational initiatives and to develop joint banking operations that can turn into new business and higher visibility.

What are for you the most significant opportunities that the Unico banks could take together over the next few years?

Corporate governance, internal organisation, individual interests and national reference markets differ quite a lot among Unico member banks. Discussions at Unico meetings frequently highlight this point. Nevertheless, all Unico banks have to cope with the same challenges related to the rapid changes in infrastructure and new trends in the international financial markets. Working together in Unico represents an incomparable opportunity for cooperative banking groups to optimise investments aimed at dealing with such changes but also for being more powerful and influential on national and international markets as well as on the European regulatory institutions. There are plenty of business areas and sectors where Unico banks could join forces to achieve better economic results. I think, for example, the management of the PSD2 effects, the Capital Markets Union or in the field of international trade finance. European banks could also join together to emphasise their cooperative nature, unlike traditional banks, especially at this time when the trend is to standardise every business and social sector. 

Finally, it is worth to be reminded that some Unico member banks are competitors in the market. It is anyway essential to consider that cooperation - at least in some specific sectors - always brings a better solution for all players.

 

Unico Innovation Week inspires action

Colleagues from the Unico banks met in Helsinki  in November at the first Unico Innovation Week, an initiative of OP Financial Group together with the Unico Secretariat. The week brought together specialists in the field of innovation and digitalisation of banks around two large events in Helsinki: Ultrahack and Slush.

The week started with Unico's participation at Ultrahack, one of the largest hacking events in Europe, attracting 350 attendees from 190 projects. Unico colleagues joined the Fintech part of the event as mentors and jury members to support and select the most interesting and innovative ideas from 14 projects.

Hibbo won the prize for its idea for banks to stay relevant for children in an era where cash is disappearing. It focused on providing visible representations of the amount of money saved. In the coming months the group will look into ways to introduce the Hibbo concept to interested Unico banks.


Mr. Karhinen congratulates the winning team Hibbo.

The second part of the week consisted of many pitches from start-ups (e.g. Holvi, a Finnish bank focussing on SMEs) and Unico banks (e.g. OP’s smart mobility project and Rabobank’s Fync). The pitches shone a light on the current innovation projects of banks and how can the areas addressed be of use to other banks. How do we prevent banks from needing  to reinvent the wheel and how can we make sure that knowledge and experience is shared among banks?

During the final part of the week, the Unico banks were the guest at OP’s lab at Slush, the leading start-up event in Europe, bringing together 17,500 attendees, 2,300 start ups and 1,100 venture capitalists from more than 120 countries. Keynote presentations were given by Kristian Luoma, head of new business development at OP, and Brett King, the co-founder and CEO of Moven, a New York-based mobile banking start-up, on the future of banking. The event was an opportunity to learn from the different approaches and energy of the start-up community.

The challenge now is to turn these fresh ideas into tangible results for Unico banks. The group that gathered in Helsinki expressed the wish to stay in contact and take follow-up action. "You do not talk yourself into innovation, you act your way into innovation!” said Jochem Baars, from Rabobank during his pitch.

Pictures, movies and quotes from the Innovation Week can be found on Twitter: @unicobanking, @kluoma, @blicklog, and #ultrahack, #OPxSlush,  #unicobanks and #slush16

 

Forum on Co-operative Banks and innovation in SMEs Financing in Brussels

On 9 November the Forum on Co-operative Banks and innovation in SMEs Financing was successfully held at the European Economic and Social Committee (EESC). This was the 7th consecutive year that the International Confederation of Popular Banks (CIBP), the European Association of Co-operative Banks  (EACB), the UNICO Banking Group and the European Association of Craft, Small and Medium-Sized Enterprises (UEPMA) organised an SME event. The European Commission also took part.

The conference looked at the growing role of technology players in SME financing and discussed their interaction with more traditional cooperative banks. SMEs account for 99 % of Europe's businesses, provide 2/3 of private sector jobs and contribute more than half of the total added value generated in the EU. But they often struggle to raise the capital they need to carry out research, develop new products and penetrate new markets. Crowdfunding, peer-to-peer lending and capital market financing, combined with more traditional cooperative bank loans, can open up new financing opportunities for PMEs. The European Fund for Strategic Investments (EFSI) can also provide lifeblood by mobilising private capital to finance strategic investments in the EU.

Three specific issues were tackled in three different panels:

  • Cooperation between crowdfunding platforms and cooperative/popular banks in SME lending: turning threats into opportunities
  • Innovative SME financing with the European Fund for Strategic Investments (EFSI): experiences and the way forward
  • How is the regulatory framework affecting the role of co-operative banks in financing SMEs?  
In his opening speech EESC President Georges Dassis stressed that "financial technology and cooperative banks must be viewed not only as competitors, but also as partners. The best results will be achieved by using them both".
  
  
Geert van der Horst, Secretary General of Unico introduced the second round table on innovative financing SME with EFSI and financial instruments. He stated: "The cooperative banking system makes a difference having its unique and long-term commitment to solidarity, responsibility and sustainability. But the banking system can no longer take care of that alone, capital requirements and the expectations raised by FinTech companies demand banks to take different actions. "
  
Andrea Benassi, Head of Public and International Affairs of ICCREA Banca concluded the round table by emphasising the strategic relevance of financial instruments for SME and the 'proximity banks': "Our banks will be soon in direct competition with the so-called Fintech which, in payments and e-bank are definitely more competitive and, by the way, are forcing big banks to acquire new companies or launch new 'Fintech departments'. On the contrary in those forms of banking – such as corporate lending - requiring forms of assistance and 'expert' brokering, the market space is relevant and can grow thanks to the use of EU financial instruments allowing capital relief and the intermediation of 'central banks' such as ICCREA banking group."

There was general agreement that the financing of SMEs should be as broadly based as possible to ensure optimal access to finance at every stage of their development. At the same time, participants made it clear that the local presence of traditional credit institutions, especially in rural, remote and peripheral areas, remains essential for SMEs, with 77% of SME funding in Europe still coming from banks - mainly cooperative and savings banks.

Panelists also stressed that there must be an adequate regulatory environment for all funding channels. Proportionality and simplicity should be a guiding principle for EU institutions to avoid unnecessary administrative burdens on credit institutions when implementing new rules. Cooperative banks voiced their concern at multiple regulatory requirements for banks and joined the European Parliament's call on the European Commission to assess the negative impact of these requirements on their lending to SMEs when reviewing the so called Basel III regulations.

Herve Guider, General Manager of EACB concluded the event by stating 'diversity of business models contribute to the stability of the financial framework'.

 

Developing UniCash service quality

Lloyds Banking Group hosted UniCash Best Practice Exchange at its Edinburgh offices on 20-21 October. The event, which brought together nine participating member banks, was approved by the UniCash Management Committee after the finalisation of the new Master Cooperation Agreement. The overall aim of the meeting was to further develop the UniCash quality of service.

The specific goals of the Best Practice Exchange were to :

  • Discuss the basic service level;
  • Learn about each bank’s account opening procedures;
  • Map common challenges; and
  • Find ways to improve the UniCash alliance.

One of the most successful aspects of the event was the focus on ‘real life case studies’, which were prepared in pairs and presented to the group.

The event was hailed a success by all attendees and representatives from Lloyds Bank  and it was recommended that this exchange be continued on an annual basis.

“The best practice exchange was a fantastic opportunity to welcome the alliance’s member banks to Scotland’s Capital. Each member bank shared the practices and processes that they follow when dealing with corporate referrals including information on the workings of their KYC processes in an effort  to challenge and improve how the alliance works together. After this excellent and much-appreciated exchange by the delegates,, we look forward to hosting UniCash events again in the future”, said Adam McFarlane, Product Manager International Payments of Lloyds Banking Group.Adam McFarlane

 

 

Johann Strobl to become CEO once merger of RZB and RBI takes effect

The Supervisory Board of Raiffeisen Bank International AG (RBI) has appointed Johann Strobl (57) as CEO of the combined bank comprising Raiffeisen Zentralbank Österreich AG (RZB) and RBI. The appointment will become effective once the merger has been entered in the commercial register. 

Johann Strobl holds a PhD in Business Administration and has over 27 years of banking experience, 18 of which were spent at Bank Austria Creditanstalt where he last served as CFO. In 2007, Johann Strobl left to become Chief Risk Officer (CRO) at RZB. He has been a member of RBI’s Management Board (CRO) since 2010, and has acted as deputy CEO since 2013. 

The appointment of Johann Strobl as CEO of the Management Board follows the decision of Karl Sevelda (66) to resign from his position as a member of the Management Board once the merger of RZB and RBI takes effect.  

"Johann Strobl enjoys an excellent reputation in Austria and internationally, knows and understands both Raiffeisen as well as our home market Austria and CEE and is experienced in communicating with the financial community and the supervisory authorities. I am glad that he accepts the challenge and I know that RBI is in good hands with him. We can be very satisfied with RBI's overall development and its future direction", said Walter Rothensteiner, Chairman of RBI's Supervisory Board and CEO of RZB.

Johann Strobl has confirmed RBI's ongoing commitment and support for Unico Banking Group.
 

Unico community on International Business Referrals meets in Vienna

Six Unico members and two Austrian Raiffeisen landesbanks kicked off Unico’s International Business Referrals as an autonomous community in Vienna.

“The lively discussions and following consensus proves that it is necessary to cooperate and exploit our UNICO strengths for customer retention together”, said Rudi Lercher, chairman of the community.

The delegates confirmed the added value of having partner banks in countries where one is not present. In every referral, the highest priority will be given at all stages to the customers. It is imperative for each bank to live the ‘gentlemen’s agreement’ to never ever acquire a referred customer in the home country.

In practice, each bank will nominate a contact person for all international referrals and the delegates keep the members of the governing bodies of their bank up to date on the developments in this community.

‘Know your customer (KYC) guidelines, to prevent banks from being used for money laundering, among other criminal activities, are considered an opportunity for the banks to make the impossible possible and emphasise the value of the partner-bank relationship concept.

"Rabobank actively follows its customers abroad. Besides our own international network, referrals to a befriended bank safeguards the relationship with our customers. Unico is a valuable platform of partnerbanks, Rabobank cooperates with", said Edwin Strijk, International Business Advisor at Rabobank.


Delegates from six Unico banks in the ‘International Business Referral’ meeting in Vienna.

 

Germany's cooperative ideal included in UNESCO's intangible Cultural Heritage list

Germany's concept of cooperatives was included on UNESCO's Intangible Cultural Heritage list on Wednesday 30 November 2016. The United Nation's heritage body aims to safeguard diverse traditions by adding new ones to its coveted list every year. 

It is the idea of doing business in a social way, with a focus on the greater good of the community.

The world's first commercial cooperative can be traced back to 1849, when a group of 57 shoemakers in the small town of Delitzsch, Germany, pooled their resources to protect themselves from exploitative capitalism.

Today, about a quarter of Germany’s population are members of a cooperative, which besides farmers and craftspeople, includes 90 per cent of its bakers and butchers and 75 per cent of its retailers. Some cooperatives have also been set up specifically for students to gain experience. Associated knowledge and skills are transmitted by cooperatives, universities, the German Cooperative and Raiffeisen Confederation, The Akademie Deutscher Genossenschaften, the German Hermann-Schulze-Delitzsch Society and the German Friedrich-Wilhelm-Raiffeisen Society.