Mutual banks back fintech accelerator mLabs

Mutual banks back fintech accelerator mLabs

Member-owned credit union CUA will turn to young, digitally savvy entrepreneurs to help it address a gap in its business: luring in more young, digitally savvy customers.

The Queensland-based company is one of seven mutual banks that have signed up to a new fintech accelerator program run by professional services firm KPMG. The mLabs 12-week program will connect the mutual banks with 14 start-up companies in an attempt to promote innovation.

Beyond Bank, Greater Bank, Heritage, IMB (Illawarra Mutual Bank), Police Bank, and Teachers Bank have signed up alongside CUA to work closely with the start-ups to come up with solutions to sector-wide issues, and create prototype products and services.

Melissa Witheriff, senior manager of innovation and strategy at CUA, said areas the bank expected fintech start-ups may be able to help included “understanding key challenges for youth about saving, and meeting financial goals”, particularly how these related to home ownership. The mutual also wants to create a better digital experience for its health insurance customers, she said.

“At the end of the accelerator we’re excited to have up to three ideas taken through to business case, that will be enable us to achieve a greater member experience and develop some commercial outcomes,” Ms Witheriff told The Australian Financial Review.

Although a partnership with a big-four bank may bring a huge group of potential customers, the mutuals, which have a combined customer base of more than 2 million, hope fintechs recognise the sector’s own selling points.

Ms Witheriff said fintechs would find collaborating with smaller banks was advantageous. “We have this agility in decision-making,” she said. “We don’t have multiple layers like you would in a large organisation.”

Former IAG chief strategy officer Leona Murphy, who departed the insurer last year and is now a director of fintech hub Stone & Chalk, said mutual banks have a closer connection to their customers and a stronger community focus than the big four banks. These qualities “should enable them [the mutuals] to drive innovation in a different way”, she said.

Ms Murphy will be one of a handful of mentors to the banks during the program.

“They [the mutual banks] just don’t have the platform and investment capacity that the big banks do [to innovate],” she said. “By creating mLabs … this will create an opportunity for them that they wouldn’t be able to do on their own.”

Mutuals have not been left completely behind in the fintech revolution. G&C Mutual Bank and the Maritime, Mining and Power Credit Union are both minor shareholders in peer-to-peer lender SocietyOne. CUA has worked with Stone & Chalk and Brisbane start-up hub River City Labs on other initiatives.

Fintechs chosen by KPMG to participate in the first mLabs accelerator include digital customer acquisition start-up Avoka, loan origination software provider Cloudcase, Blockchain loan solution Moneycatcha and budgeting app Pocketbook.


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