“Trust is perhaps the single most important underlying element of running a financial cooperative.” Eric Dillon, CEO Conexus Credit Union
Cryptocurrencies, such as Bitcoin, and their underlying distributed ledger technology (aka: blockchain), are getting a lot of attention these days.
To get a better understanding of the impact this technology might have on co-operatives in the financial industry, we asked one of our favorite credit union leaders, Eric Dillon, to give us his take on the technology and how it might affect the organization he manages.
Dillon is the Chief Executive Officer at Conexus Credit Union, Saskatchewan’s largest and Canada’s sixth largest credit union. Founded in 1923 (Sherwood Credit Union), and headquartered in Regina, Conexus now manages over 7 billion in funds and boasts around 120,000 members. (And I’m one of them.)
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Dillon is a prolific Twitter user (you should follow him). So, I was aware he’s been thinking about this technology and what it means for the sector for a while now. But I was still surprised and impressed by his nuanced answer to how financial co-operatives, technology and trust are (or can be) linked.
“It is my view that Distributed Ledger Technology (DLT) could perhaps fundamentally change the way that banking is done today,” he said. “Conexus is participating in some pilot projects using DLT and we expect to learn much from those pilot projects.”
That said, Dillon suggests there is “a significant amount of evolution required” before we’ll see these technologies in “more mainstream applications.”
So, how does trust fit into this?
Much of the hype around blockchain is linked to its distributed ledgers, which advocates claim will increase trust in financial transactions because of the technology’s inherent security and transparency. So, we asked Dillon what role trust plays in his everyday banking strategy.
“Trust is perhaps the single most important underlying element of running a financial cooperative,” he said.
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He makes a great point. The purpose of a co-operative is to serve its members’ interests. Plus, each member gets a vote and has the opportunity to run for a board position. Together this means co-ops do better when their members do better, and decisions are made by those whose interests are served by the co-operative. Trust is clearly very important.
So, do financial co-operatives have a future in the brave new world of Big Tech and new technologies, like blockchain?
“I would absolutely suggest that the cooperative model is a very important strength as financial services evolves,” Dillon said. “We believe that given our cooperative structure and our relationship with our member owners that they will have higher trust in how their information is managed, used and distributed and the protocols associated with same.”
Dillon also suggests credit unions remain focused on their members when implementing any technology and provide a solid financial literacy offering.
“We believe that while members are demanding technology solutions to provide them real time access and information about their money, they are also very desirous of quality financial advice from institutions that they can trust,” he said. “Credit unions are very well positioned to help with that provided they can offer comparable technology solutions to provide convenient access to their [members] money and the data around their financial life to support quality decision making.”