Future. Shaping. Now.

Annual Report 2020

Ceo Message

Ian Burns

President and CEO

Forward-Thinking Actions Shape Unprecedented Times

Looking back at the start of 2020 there was a sense of enthusiasm and anticipation. Alberta Central was initiating its shift to becoming a marketplace connector utilizing the Prairie Payments Initiative (PPI) as a significant first step. Created to deliver an efficient and modernized payments infrastructure to prairie credit unions through IBM’s payments-as-a-service platform, we spearheaded one of the largest agreements of its kind in Canada to empower credit unions as the owners of a new era of payments processing for their members. This included Alberta Central leading the formation of the Prairie Payments Joint Venture (PPJV) to oversee the PPI.

Then came the abrupt onset of a global pandemic, affecting everything from an already downtrodden economy to the way organizations across the world thought about their work. We knew the pandemic reality would bring an entirely new set of challenges, requiring an agile organizational response. We wasted no time in identifying three key priorities: protect our employees and keep the organization operationally resilient; elevate our support to members; and continue to execute on our strategic priorities.

2020: Forging Ahead Against a COVID Backdrop

As the pandemic went full throttle, our most important priority was the safety and wellbeing of our employees. Transitioning swiftly to a primarily remote workforce, we needed to stay resilient. Thanks to excellent business continuity plans, our operations continued without member impact. We also needed to equip our employees with what they needed to be successful in their roles. This included creating access to online wellness programs to support any mental health impacts and ensuring the physical office space for those remaining onsite was safe and abided by all government-mandated protocols.

“Despite the challenges 2020 brought, Alberta Central did not waiver. We made a choice to thrive and stay focused on our members and our future.”

To support our members, we increased credit union engagement, influenced the inclusion of credit unions in the province’s listing of essential services to remain open throughout the COVID state of emergency, hosted numerous webinars around employee legislation and crisis communications, and supported understanding of federal financial relief programs through regular updating and description of the programs for credit unions. In addition to our COVID response and support, we continued to execute on our strategic priorities. We strengthened our own governance and business processes; we influenced key policy changes to benefit the system including finalizing insurance regulations and the corporate income tax rate decrease from 10% to 8%. We also generated awareness of the system through marketing campaigns, economic thought leadership, launched a new grant program to Alberta small businesses and entered into an agreement with the Bank of Canada under the new standing term liquidity financing program to provide “last-resort” access for credit unions to emergency funding in a timely manner.

2021: Forging Ahead With a Reinvigorated Backdrop

Now into 2021, the air has shifted. As the world begins the long but welcome process of emerging from the pandemic, the renewed energy is palpable. Alberta Central will keep the momentum in its evolution to being a marketplace connector. We will do that by looking for partnership opportunities, innovative products and services development, and collaborating with other stakeholders to optimize system-owned entities. The strategic pillars that drive the achievement of our strategy – customer-centricity, innovation and diversification – also remain consistent as many of the supporting actions begun last year are multi-year, and will therefore continue into 2021.

Championing the Credit Union System is Alberta Central's Purpose.

In all of this, the main driver is our member credit unions. While 2020 saw more change that anyone could have anticipated, one thing did not change - credit unions always come first in everything we do. Our purpose is to champion the system and provide value and expertise to all of you. We look forward to serving you well in 2021 and beyond.

Chair Message

Perry Dooley

Chair

Board Leadership in a New Normal

What a year.

2020 brought to the world a pandemic that impacted everyone and everything, amplifying and accelerating some of the biggest challenges in our society. For businesses, it called for the urgent need for systemic response in areas including business resiliency, human resource planning and stakeholder management and support.

As I sat in my role as board chair, I considered how a board of directors should support an organization during a pandemic. In normal times, our role is to govern by acting in the best interests of the organization, to support by asking critical questions, and to champion by celebrating and furthering the mission of the organization. In such an unprecedented year, all of this was still required but I knew we needed to take it a step further — we also needed to serve.

That meant that as a board we needed to keep the lines of communication open and listen carefully to executive management. It meant staying up to speed on the status of the issues or concerns the pandemic presented and it meant being available as a group or as individual directors to provide advice and additional insight to management's pandemic response if they needed it. Thanks to consistent reporting to the board by management throughout 2020, we received pertinent updates on: how employees were managing from a culture and mental health perspective, any required support for member credit unions and the effectiveness of business continuity plans as the majority of employees transitioned to remote work. We also quickly pivoted to virtual board meetings and planning sessions, including getting forbearance from our regulators to modify our AGM to a virtual format.

“To be successful, Alberta Central’s board of directors must be strongly committed to innovation as the path to success.”

Championing a Vision in the New Normal

Aside from a duty to serve, we also had to continue to champion effective delivery of the organization’s strategic plan and vision to be a marketplace connector. In 2020, the board continued to rally Alberta Central’s lead role in the Prairie Payments Initiative (PPI) and the Prairie Payments Joint Venture. Created to spearhead innovation, the PPI was a significant first step in connecting credit unions to the knowledge, products and services they need to be competitive in the payments landscape. Taking a new and innovative approach with a like-minded partner in IBM for payments modernization, was a departure from prevailing central thinking that products and services must be built in house. This program has come with its challenges but through continued resiliency and commitment, it will give prairie credit unions a strong foundation on which to build excellent member experiences.

In 2020, the board also successfully completed 18 months of work and consultation with credit unions on our dues and governance processes in accordance with bylaw stipulations. 2021 will see a continued focus on how we can best support the organization to further cultivate its vision to be a marketplace connector. This will come through innovative governance, which is about more than just observing the organization’s desire to create change, it’s about evaluating innovation in our own board processes to support what management strives for. If we expect management to create, we must offer the same in return through out-of-the-box thinking, collaboration and a demonstrated commitment to being an innovative partner, all while ensuring management’s plans balance strategic opportunities within an appropriate risk appetite.

On behalf of the board of directors, thank you to the Alberta Central team and to member credit unions. We appreciate your continued support and feedback and look forward to an exciting 2021.

Our System by the Numbers

For 2020 the number of credit union members decreased slightly, but system assets remained strong.

Branch Locations

194

Credit Unions in Alberta

Full-Time Employees

3,371

System Members

615,865

$28.24

$2.69

$142.7

System Assets in Billions

System Equity in Billions

System Earnings in Millions^*

*Net income before tax and patronage bonus. Data as of October 31, 2020

Driving Meaningful Change as a System Leader

Highlights of work in 2020 include:

1. Prairie Payments Joint Venture (PPJV) formalized with the mandate to deliver an efficient, cost-effective and modernized payments processing infrastructure for prairie credit unions.

Implementation of the IBM Payments-as-a-Service platform.

Support services such as accounting, communications, legal and risk and compliance provided to the PPJV.

Initial efforts kicked off to source additional payments volumes for the PPJV; growing our capabilities to be a marketplace connector.

2. Efforts to increase awareness of the credit union difference with Albertans.

Media and public relations strategies developed and executed to increase credit union awareness, including the launch of the Alberta Central Big Future Innovation Grant.

Enhanced digital strategy developed and executed throughout 2020.

3. Leadership of the Digital Transformation Collaboration Project continued in partnership with credit unions with significant progress made:

The development and implementation of a process for 11 Alberta credit unions to offer COVID-19 Canada Emergency Business Account interest-free loans and submit the loan reporting, resulting in Alberta credit union business members receiving more than $80,000,000 in government funds.

Support to the collaborative working group of 11 Alberta credit unions and one Saskatchewan credit union as they migrated from MemberDirect to Celero’s Xpress digital banking platform.

4. Continued focus on bringing value and expertise to credit unions.

Increases to existing collaboration amongst system finance leaders with extensive meetings during the early stages of COVID-19 to provide updates on market and economic conditions and share information on liquidity levels and loan deferral activity.

Entry into an agreement with the Bank of Canada to provide “last-resort” access for credit unions to temporary central bank liquidity, ensuring access to emergency funding in a timely manner.

5. Ongoing advocacy efforts to grant Alberta credit unions a voice on important issues.

Influence on key policy changes to benefit the system such as finalizing insurance regulations, decreasing corporate income tax rates from 10% to 8% and the government’s adoption of measures designed to level the playing field for Alberta-based financial institutions (including government-owned financial institutions).

Securing participation on behalf of the Alberta system in the Financial Data Exchange Canada and Canadian Credit Union Association’s Open Banking Legislative Committee to ensure credit union participation in the development of an open banking framework for Canada.