Desjardins Group's new building in Toronto's financial core has thrown down the gauntlet to the surrounding financial services firms.
The country's largest co-operative institution has opened a new building on King Street West, which will house almost all of the company's offerings, from banking to insurance, under one roof. The ribbon was cut Wednesday in a ceremony intended to mark the company's place among the major Canadian financial institutions.
Executives say the King Street space represents the way the Desjardins network of credit unions will operate in the future – integrated, efficient and willing to compete with the country's financial giants, such as the Big Six banks.
Though the compact office mirrors a similar Desjardins facility in Montreal, it is the first of its kind in Ontario. Desjardins Voyageurs Credit Union will provide banking services, but clients can also get home and auto insurance, retirement planning help, business and credit card services at the central location. There is even a separate door out the back of the building to meet regulatory requirements for housing banking and insurance in the same place.
"It's easy for our clients and members to come to one place and have everything here," said Monique Leroux, chief executive of Desjardins. With $210-billion in assets, Desjardins group is the fifth largest co-operative in the world, and the fifth-largest deposit taking organization by assets in Canada.
Now in the second year of her second four-year term as CEO, Ms. Leroux is ushering in some key strategy changes. "We have tried to position Desjardins, as much as we can, as a preferred partner of co-operative organizations in this country," she said. For example, Desjardins is providing new business banking offerings to large co-ops out in Western Canada.
Ms. Leroux explains that Desjardins has a dual strategy. The company will also be looking to add through acquisitions – especially if it means keeping credit union members out of the clutches of acquirers with non-co-operative business models. In the event that a credit union could be an acquisition target for such a company, "it could make sense for us to be there to seize this opportunity to keep it within the movement," she said.
Ms. Leroux is passionate about expanding and promoting the co-operative business model. At the same time, however, Desjardins allows its vast network of financial service credit unions or "caisses" to operate with some autonomy. "We're working on the same strategies, but not necessarily with the same tactics," Ms. Leroux said. The DNA of the group is decentralized, which can be both a challenge to manage and a strength that allows the businesses to serve clients differently depending on geography and needs.
Part of that strategy often includes letting acquisitions continue to operate under their own name. "We respect that they feel their name and brand is the best to serve members and customers," Ms. Leroux said.
At the end of 2010, Desjardins acquired High River, Alta.-based Western Financial Group for $443-million. At the time, Western had 121 offices in British Columbia, Alberta, Saskatchewan and Manitoba. The figure has since climbed to 175 locations.
"In a short time we have really developed the footprint, so that's part of the strategy. There are still additional opportunities in front of us," Ms. Leroux said.
Like its competitiors, Desjardins is also investing heavily in technology, such as mobile and internet banking tools.
But all of the strategic initiatives, including the new centre, lead back to deepening the commitment to the credit union business model, Ms. Leroux said.