July 17, 2012
Rabobank Nederland, a financial institution with the reach of a global bank and the roots of the credit union movement, will showcase its success story at the Northwest Credit Union Association’s (NWCUA's) Convention and Annual Business Meeting in October.
Arnold Kuijpers, Rabobank's director of corporate affairs, will keynote the General Session on the morning of Wednesday, Oct. 3, 2012.
The Netherlands-based Rabobank was founded in the late 19th century with traditional cooperative principles.
“Everyone wanted access to banking services, whether deposits or loans—farmers, shopkeepers, individuals,” said Kuijpers, describing beginnings that will sound familiar to American credit union leadership. “They were unserved by the banks.”
The banks began to pay attention to that clientele in the 1960s when employers started direct deposit in the Netherlands. Rabobank was accessible, well-spread-out across the county, and well-positioned, Kuijpers said, to accept new customers. Once the banks noticed the potential, competition became fierce and Rabobank responded.
“We had to adapt and become more efficient, so our members and customers would get products at lower cost,” Kuijpers said. Rabobank’s non-profit model made that possible and “prevented banks from being too greedy,” he continued. “We had a low profit margin, so the banks could not afford to overcharge.”
Kuijpers believes the model has endured and evolved because of the “solidity of the model and the quality of the people, both in terms of capacity and integrity.”
Today, Rabobank is a world leader in food and agricultural lending. According to the 2011 Annual Report, Rabobank is comprised of 139 independent, local cooperative banks in the Netherlands and 872 foreign places of business. It serves 10 million customers worldwide, 7.5 million of whom are in the Netherlands and 1.8 million of whom are members.
Rabobank has targeted expansion in rural areas similar to its successful Netherlands locations. Foreign locations include New Zealand, Ireland and California, and the focus has not strayed far from its 19th century farm roots.
“That’s where we came from,” Kuijpers said. “That’s where we have a lot of expertise.”
Yet Kuijpers said that while it has remained true to its agricultural history, Rabobank sacrificed some local autonomy to become more of an international force in order to better serve its customers. He sees a necessity for similar evolution if financial institutions are to remain competitive.
“Because of a relatively high fixed-cost component in the production and deliverance of financial retail services, volumes of customers, accounts and transactions are paramount in order to be able to provide them at low cost, and therefore to avail of the capacity to compete,” Kuijpers said. “If an institution is not big enough to avail of this benefit on its own, it should look for others with the same need. This will start as ‘a nice thing to have,’ but in an environment characterized by increasing competition, it will end up as ‘a necessity to survive.’”
Editor’s note: Rabobank’s governance model includes volunteer boards, much like the American credit union structure. In Thursday’s Anthem, we will report on more of the insight Kuijpers will bring to this year’s Convention.
Questions? Contact Training Programs Coordinator Yuri Jung: 206.340.4817, email@example.com.