Strategy

Q&A: Vancity's Tamara Vrooman

She's balanced previously unbalancable government budgets - now she tries her hand at Canada's largest credit union.

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As the recently installed CEO of Vancity, Vrooman now heads Canada’s largest credit union, with $12.3 billion in assets. In September, she replaced Dave Mowat, who moved on to ATB Financial in Alberta. Known for her rapid rise in B.C.’s provincial government, as deputy minister of finance she pushed the province to its first AAA credit rating in more than two decades. In her first major move at Vancity, earlier this month Vrooman restructured, taking the number of senior managers who report directly to her down to nine from 28, as she deemed the company overly top-heavy. Vrooman sat down with Canadian Business reporter-researcher Regan Ray to discuss the role of credit unions, her new position and Vancity’s future.

What is your proudest achievement in government?

The role I played around settling absolutely every one of the public-sector agreements without a strike. The strategy we used was, for the private sector, not all that radical — a signing bonus — but for the public sector, it was quite a change. To take the extraordinary windfall we got from high natural gas prices and put it to a productive use in terms of labour stability and peace in the province over the next four years and through the Olympics — I’m pretty proud of that.

What was it about Vancity that made the switch to the private sector attractive?

That’s funny you say making the switch, that’s actually a campaign of the credit unions to get people to switch. The fact that it was a large financial institution but yet shared a lot of the values that I hold in terms of public service. When you are in charge of 30-plus billion dollars of the taxpayers’ money, your job is to manage that prudently so you can maximize the benefit in the community. And that’s what I see Vancity doing.

Can you imagine yourself at one of the big banks?

At this point it’s not as appealing to me, but maybe bit by bit we can start to change the way the banks think. You can see that already. They are thinking more about the role a major financial institution plays in the community and a little bit more about how they do business. They still don’t have a woman CEO, so they’ve got a ways to go in my mind, before we can really consider them to be progressive in every sense.

What are the advantages Vancity has in today’s intensely competitive financial services market?

We have the ability to be a bit more nimble and dynamic in terms of the products we offer. It’s difficult for a bank based out of Toronto to understand all of the issues right across the country and to develop niche regional products.

On the flip side then, what are the major challenges facing Vancity?

Different regulatory systems are one of the biggest challenges. It’s an issue credit unions have that banks don’t because banks are regulated federally and credit unions are regulated provincially. That’s definitely one barrier to geographic growth. What makes a credit union isthat we are community-based. We make decisions locally, we get to know our members, we live and work where they live and work, and when you start to expand beyond that we need to make sure that we keep the key thing that differentiates us from a large bank, which is the local decision-making. That’s the biggest challenge: how to keep the credit union niche while you grow.

What do you see as Vancity’s role in developing a more competitive environment in Canadian banking?

We’ve seen a real change in the financial services landscape, particularly in the United States and even internationally, with the collapse of some lenders. There is now more than ever an opportunity for a quality, long-term alternative to the big banks to come and take over that second-tier place in the market. We certainly have been relatively insulated from this credit crunch because of the decisions we’ve made. Vancity is well positioned to serve that market that looked to alternatives like Dundee that are no longer in the market.

You mentioned the campaign to “make the switch.” How are you going to draw people away from the big, bad banks?

Vancity isn’t afraid to take risks. And we do things to serve the community that banks simply won’t do. If people can take care of themselves and their families financially, not sacrifice that one bit — in fact, get excellent service — while at the same time contributing to their community, the environment and social causes, why wouldn’t they do that?