Iemas Financial Services – The Spirit of Cooperation
We learn how a different kind of financial services firm is supporting its members.
Iemas Financial Services is the biggest financial co-operative in South Africa. It offers a wide range of affordable and competitive financial products and services through contractual agreements with more than 620 Employer Groups across South Africa. Co-operatives offer a unique customer relationship, whereby an individual employed by a contracted Employer Group who uses one of Iemas’ products or services becomes a part of the organisation.
“Our unique co-operative business model is based on the principle that our organisation is owned by, and operated for the benefit of those using our services (referred to as members),” explains the co-operative’s Group CEO, Banie van Vollenhoven. “Thus, our members annually share in our profits based on the products or services they used during the year.”
Iemas has had extensive experience assisting its members with their financial affairs over its 80-year history. The company provides financial services and a product portfolio that includes secured asset financing, like vehicle financing and pension-backed loans, comprehensive insurance solutions, unsecured financing, including educational loans and personal loans and a country-wide accepted close-loop purchase card.
The Quality of Being Human
Talking to van Vollenhoven, it’s clear he’s passionate about the unique gap customer-owned co-operatives provide.
“Our main purpose as a co-operative is to function and operate to the benefit of our members and living it out in the spirit of ‘Ubuntu’ – [Ubuntu derives from a Nguni word, Ubuntu meaning ‘the quality of being human’]. To the observer, Ubuntu can be seen and felt in the spirit of willing participation, unquestioning assistance (a-la cooperation), warmth, openness, personal dignity and – in a more philosophical sense – it means ‘the belief in a universal bond of sharing that connects all humanity’,” van Vollenhoven explains. “This is the core of why we do what we do, hence our stated core value of being a caring partner. This will never change as the co-operative business model essentially means that when an individual uses our products, he/she becomes a member of our organisation, and as such has a say in how we run our business and also share in the benefits of our collective successes.”
In turbulent times such as these van Vollenhoven believes the role of the co-operative is more important than ever.
“In an ever-changing financial environment where our members’ needs are also changing, we are constantly looking at new and innovative ways that will ensure ongoing value-creation to our members – which can be measured tangibly through rewards to our members and is evident in the engagement experience,” he says. “This includes an open and warm welcoming of our members, quick turn-around times with loan applications, free financial wellness workshops (in some cases on employer-group premises) and ongoing email-based advice to financially educate our members helping them towards improved financial awareness. With our member’s ever-evolving needs, we continue to add products such as savings products, retirement planning and investments, which will assist our members on their journey towards improved financial wellness.”
Of course, just because Iemas is able to help its members through economically challenging times doesn’t mean the business is immune to that environment itself.
“As with any financial services provider, we are faced with the challenges of the current dire macro-economic environment as well as with the current challenges in our local economy,” van Vollenhoven admits. “Both are under pressure and more specifically, in South Africa, we are faced with a high unemployment rate (>29%) and low economic growth (a growth rate of 1.5% is expected for the end of 2019). As such, our members are also under immense financial pressure, which has a major impact on their payment propensity causing demand for loans to dwindle. This risk, coupled with inherent inflationary pressures in our cost base, have a direct effect on the short-term running and longer-term sustainability of our organisation.”
Iemas is responding to these challenges by finding yet more ways in which they can provide support to their members.
“We find ways in which we can add real value to our members. As mentioned earlier, we invest by providing financial wellness workshops and life file (estate planning and retirement readiness) training at all the employers whom we have agreements with,” says van Vollenhoven. “We equip these employees to plan for their future, manage their finances more responsibly and prepare for internal as well as external pressures/risks that may affect their finances. We also believe that our unique business model gives our members a sense of belonging and peace of mind that they are part of something bigger and that they can look forward to being rewarded every year. We continuously look at new ways in which we can improve our offering to our members more efficiently through the implementation of new systems and technologies.”
This level of care and support extends not just to Iemas’ members, but their staff as well. The company’s people strategy is aimed at establishing and maintaining an organisational culture of performance, in support of sustainable growth.
“We strive to provide a healthy work environment with ongoing support by means of people and leadership development, diversity integration and home-grown employee wellness programmes,” explains van Vollenhoven. “In promising to be a caring partner to our members, it is expected of Iemas employees to conform to the corporate values of professionalism, integrity, ownership and accountability, dignity, teamwork and innovation. We live these values through our daily conduct and ensure alignment through investing in performance management and skills training – and – being customer focussed”.
Facing the Future
As a forward-thinking organisation, we are now busy with the implementation of one of the more visible phases of the Iemas Business Modernisation programme. This phase is specifically aimed at providing a new platform on which Iemas’ digital transformation will be anchored.
“It includes a major upgrade to our core product suites and will allow us to switch off the legacy systems which, up till now were holding us back,” van Vollenhoven points out. “These provide us with an improved service delivery “bus”, with easier active system interfaces (ASI) allowing us to provide flexibility to our members through creating more product and digital channels available on a 24/7 basis as opposed to being restricted to official office hours.”
In addition to making technical advances, Iemas is also investing in its human capital, by creating specific knowledge roles and opportunities for its employees, which includes analytical abilities and skills, as well as a complete and continuous improvement of its customer-focused culture.
“Following shortly after this major (more internal visible) system enhancements, we will be launching our much-upgraded payment card, which will be launched early in 2020,” van Vollenhoven shares with a smile.