‘We get good s*** done’: The Co-op way to a friction-free customer experience – David Cunningham, CEO, The Co-operative Bank

David Cunningham Co-Op Bank

“Where the industry has failed is the archaic way we are still dealing with bank switching, which in most cases still requires a signature. The mind boggles.”

NZ’s own The Co-operative Bank has carved out a unique niche among the Aussie big four as a customer-owned bank with digital innovation firmly at its heart. With the dust of Covid now settling, Co-op is doubling down on its innovation program, positioning Open Banking, open data, and accessibility at the front of its innovation agenda.

Here, Co-op chief executive David Cunningham gets candid around the bank’s push to deliver friction-free customer experiences, the still “archaic” approach to bank switching, and why a legislative solution is, for better or worse, the likely way forward for NZ’s Open Banking rollout.

FST Media: The Co-operative Bank sets itself apart as one of New Zealand’s most prominent customer-owned banks. How does this unique structure impact Co-op’s approach to innovation – both at the customer end and in the back-office?

Cunningham: As a co-operative business, our purpose (‘to benefit our customers’) and beliefs (‘fairness, mutual benefit, individuality and future focus’) are important drivers of what we do and how we do them. This comes to life externally through our brand position of ‘Doing Right by People’.

The way this flows through into our innovation agenda is that we always look through the lens of ‘What is the right outcome for our customers?’. This is always a balancing act, as what some customers want may be very different from what others want. We have to make decisions that are best for our customers overall. A good example was our removal of cash withdrawal activity from branches. A handful of customers still used this service, but it was a significant cost overhead which was a poor use of the Bank’s resources. With lots of other options for customers to get cash (ATMs, eftpos withdrawals), we focused on educating customers on how to get cash in a different way.

We also intently focus on listening to our customers and ensuring that we communicate change to them. We recently replaced our old mobile app (which was launched in July 2014), and the new improved app has a pretty different look and feel – all based on what we learnt our customers wanted from their bank’s app. For me, our comms strategy was the most important part of the project.

Finally, I talk to a lot of customers. If a customer emails me with a compliment or a gripe, I pick up the phone and talk to them. It gives me a really good perspective on what matters to them and helps me understand the impact of our innovation and change.


FST Media: Take us through Co-op’s digital agenda over the next 12 months. In a year of crisis and financial hardship for many consumers, how is the bank evolving its digital services to keep pace with an emerging financial services ecosystem framework?

We’ve continued our focus on self-service development to enable customers to do anything from anywhere, when it suits them, all under the guiding principle of removing friction for them. We’re growing as a bank, so ensuring our platforms can do this flexibly and sustainably while delivering what our customers need is a big focus.

One area of focus is in the Open Banking arena – both open payments and open data. In New Zealand, it’s a real dilemma for the industry, as there is no legislated Open Banking or Consumer Data Right (CDR) framework – yet. The emerging Open Banking eco-system being driven through Payments NZ is still in relatively early days and, to be honest, until all banks are fully committed, I don’t think a lot is going to happen which benefits customers.

My observation is that the industry is moving slowly on the elements of Open Banking that drive commercial outcomes – such as sharing of account information for credit decisions. Some banks seem to be investing in third-party applications that use older technologies (aka, screen scraping), whereas the ideal industry solution is the Payments NZ eco-system.

I suspect we’re headed for a legislative solution – which isn’t the best outcome in my opinion.


FST Media: Without necessarily the resource heft of the big four, in what ways has Co-op sought to differentiate its digital service offerings from that of its rivals and establish itself as a viable alternative?

Cunningham: I’ll put it bluntly: we get (good) shit done. Having worked in big banks, the benefit of a smaller player like Co-op Bank is that we have low overheads, a fairly simple suite of solutions, and we attract great people who love working for a customer-owned business

As mentioned, we recently re-built our iOS and Android mobile apps inside a year, which is a huge undertaking for a bank of our size. This was not just the code base, but a redesign of the user experience to be even more human-centred. That focus on our customers is central to our thinking.

The proof is in the pudding – we had our app audited by iSky Research using a friction methodology (think taps, swipes, clicks, speed, and ease to get key tasks done) and our app has the least friction in the NZ banking market.

We’re also looking at accessibility improvements like narration of the screens for blind and partially sighted users. It’s that focus our people have on our customers that is genuine and real.


FST Media: As banking industry veteran, what defines a successful customer interaction in the digital age?

Cunningham: That’s the first time I’ve been called a veteran, but I guess 30 years qualifies me!

A successful customer interaction in banking, or any industry, is about removing friction. Don’t ask for information if you have it, or can get it, without asking the customer (except for permission to get it). Design processes with the customer or staff member in mind, and user-test to refine. Make it a beautiful, frictionless, and personal experience.

One thing that springs to mind where the industry has failed is the archaic way we are still dealing with bank switching, which in most cases still requires a signature. The mind boggles.

With open data and the electronic age we live in, this should be easy to solve and will help overcome customer apathy to change banks, because it’s perceived as being just too hard.


As an industry, we’ve talked about this for more than 20 years with little progress. It’s a great use case for Open Banking.


FST Media: The Covid crisis has seen a period of rapid change and transformation for the banking sector. How effectively do you feel the sector has evolved to meet customer needs through this period? What further changes, particularly in the digital space, will the sector need to deliver to support consumers in the transition to a post-Covid economy?

Cunningham: Covid has accelerated existing trends. Most of us had probably used Zoom or Teams or Workplace Chat. But that usage exploded. Most New Zealanders didn’t use cash that much, but for the six weeks of an NZ-wide lockdown, we barely used cash at all. Many businesses hadn’t enabled tap payments, but most did during Covid.

I think Covid has accelerated the redefinition of the role of the branch. At Co-op, we see branches – in fact, all human-assisted channels – as adding the most value for complex service and sales interactions. So ‘pinning’ a card in-branch, making a cash deposit or withdrawal, printing out a statement – all of these things don’t really belong in-branch any more and digital solutions are already there. A challenge is to take the laggards on the journey of adopting new ways of doing things. Sending emails to them won’t do the job; it’s about person-to-person engagement.


FST Media: With banks now readily embracing AI and chatbots, for better or worse, what impact do you feel these technologies will have on current forms of customer engagement? 

Cunningham: For us, the place of AI will be in assistance rather than takeover. It’s about creating efficiency in the right places.

In the customer engagement sense, we would never have a bot that we pretended was a human; that’s not our style. For simple high volumes questions from customers, I think chatbots have a place.


But I still really rate the importance of the phone call! We’ve recently implemented Amazon Connect, a cloud-based customer interaction platform. This has enabled us to decentralise our inbound calls around our front-line teams rather than have a centralised contact centre. For a small bank, this leverages the broader team to cope with the ebbs and flows of inbound calls. At any time we can now have 150+ people available to take calls. Interestingly, our frontline staff are loving this and our customer calls are now almost all answered within 60 seconds. It’s also enabled us to remove voicemail functionality, which was a huge time-waster and frustrating for both staff and customers.

For me, it is important to focus on slick, frictionless digital processes and maintain that human touch where customers want it. Incidentally, we’ve found very little interest from customers in video interaction, which we thought customers would adopt given the widespread use during lockdown. That hasn’t eventuated for us.


FST Media: In preparing The Co-operative Bank to thrive in this new era of digital-centric, customer-focused financial services, who – or perhaps what industries – do you look to for inspiration?

Cunningham: I love looking to the exercise world! Companies like Les Mills, which has taken fitness global from an NZ base, with 140,000 instructors around the world, almost entirely using digital solutions. Their mission is awesome: “We’re on a mission to create a fitter planet”.

And I think we can learn a lot from the fitness app Strava, which tracks exercise (cycling, running etc.) and incorporates social networking features. It connects beautifully to GPS devices like Garmin and presents your stats in simple, insightful, and surprising ways – such as showing all your previous efforts on a route or segment, and other Strava users’ efforts.

The social feature can be really motivating too. Unlike a ‘like’ on Facebook which comes with little effort, a ‘kudos’ on Strava needs work. I recently completed a 300km bike ride in a day and the kudos and comments flowed! I could also see other people that had done the same route, including one of the guys I rode with that day. Appropriately, his nickname is ‘Mad’.


FST Media: Finally, what do you feel is most characteristic of your leadership style? How has this served to inspire and motivate your workforce to problem solve more laterally?

Cunningham: When I stepped up into the role of CEO at The Co-operative Bank, the previous CEO gave me one bit of advice: don’t try and be someone who you aren’t.

So I bring my whole self to work. I’m passionate, energising, crazy, ready to learn, a bit random and, more than anything, I love seeing humans be successful. Hopefully, that creates a fun and caring work environment where people love their jobs, which for me is the essence of creating brilliant things.

David Cunningham will be a featured keynote speaker at the Future of Financial Services 2021, Auckland conference, exploring the evolving roles of cloud and digital, and why the ‘human touch’ still matters in banking.