So much has happened in the last week. I hope you are safe, healthy and managing as best you can. I want to commend you for the incredible adjustments you have made to your organizations in order to support your employees, members and customers.
Central 1 pandemic readiness and response
As I mentioned in my update to you last Monday, Central 1 has moved most of our employees to remote work. Our teams are working diligently to ensure all critical functions continue to operate. We are readily available to support you with our full range of products and services to assist you and your members navigate this new reality of physical distancing. I encourage you to reach out to your relationship manager, member relations staff or our Client Support Services team.
Government of Canada Direct Deposit Initiative
Central 1 is working with the Government of Canada and Payments Canada to help develop a system-wide initiative to drive adoption of direct deposit of government benefits through our digital banking platforms, MemberDirect and Forge.
This project has an aggressive timeline, as the Government of Canada has requested implementation by early April. Work is well underway by our teams on this project.
We will share further details of our plans with you shortly, including the specific steps needed to implement the CRA’s enrolment process.
Digital Banking, MemberDirect and Forge
I recognize that a stable and enhanced digital banking platform is more important than ever to you and your customers. We’ve seen this confirmed throughout last week as fifteen more clients signed on to Forge.
We continue to progress with Forge’s development and feature functionality within Forge Retail and Business banking. Forge Small Business also remains on track for build completion and pilot readiness soon. We have also implemented several tactical changes to advance our onboarding processes for Forge.
We are maintaining close communication with current Forge clients regarding the Digital Banking System (DBS) Upgrade, to ensure that we are in alignment on this complex, yet critical initiative. In consultation with our clients and partners, we have agreed to proceed with the DBS Upgrade on April 5.
With a heightened focus on stability and availability in this current environment, and in discussion with many of you, we are reducing the volume of changes applied to MemberDirect for the immediate future.
All proposed changes are being reviewed with increased scrutiny to minimize risk. We will only deploy changes that address critical and strategic business needs for our clients or our business partners. If there are changes needed by your organization, please reach out to either your relationship manager, or the client support services team for further assistance.
Treasury and Market Update
Our Treasury team is closely monitoring financial markets and the broader economy, as well as the potential impact to the credit union system. We have created an online resource for Treasury Tools, Resources and information for COVID-19. This page will be updated regularly to provide you with resources and tools to support your funding and liquidity needs during this uncertain period.
We have prepared a Summary of Contingency Funding Plan Actions to ensure you have access to the latest available information about government and Central 1 programs. We will update the summary as new programs become available. To support your liquidity planning, the summary is organized by liquidity risk level, similar to the schedule in the sample Contingency Funding Plan template on Secure Site.
Central 1 has access to some of the recently announced federal programs as well as access to other federal support, such as the Standing Liquidity Facility and the Standing Term Liquidity Facility offered by the Bank of Canada. Access to these programs facilitates asset liquidations or borrowing in order to provide funds as needed.
We strongly encourage you to update your Contingency Funding Plans for all available liquidity resources.
Our Treasury team hosted two calls last week. The first was a call with credit unions that are National Housing Act Mortgage-Backed Securities (NHA MBS) issuers to discuss recent changes to the Canadian Mortgage Housing Corporation’s Insured Purchase Program, and how securitization can be used to improve your access to funding. To listen to a recording, click here.
Our second call was a general market update on the economy, market activity and provided general guidance to assist you as we navigate through these unprecedented times. To listen to this recording, click here.
Our economics team is closely monitoring and analyzing trends and conditions. This past week, one of our economists contributed to several media interviews regarding the economic impact of COVID-19. The team collectively published an analysis of the current recession, a commentary on the impact of COVID-19 on Ontario’s economy, a statement regarding the Bank of Canada’s latest emergency rate cut and the usual weekly economic forecasts for B.C. and Ontario. To read these reports, click here.
IFRS 9 Loan Loss Reporting Platform includes COVID-19 modelling impacts
Central 1 is well-positioned to support you in meeting your reporting and analytical needs for International Financial Reporting Standards (IFRS) 9. Our IFRS 9 Platform is a loan loss model that provides modelling capabilities in addition to pre-formatted and populated reports to support your regulatory and financial statement disclosures. Our model has updated economic parameters and incorporates expertise from our economics team, including commentary and forecasts. This enables you to calibrate and prepare for potential impacts to your IFRS 9 expected credit loss provision as the situation evolves. For more information, click here.
Our technology and remote working capabilities continue to effectively and efficiently allow the most of our payments staff to work from home. Cross training resiliency has been built into our staff plans to ensure the Automated Funds Transfer (AFT)/Wires desk is always adequately covered, even in the case of a staff member becoming ill.
Central 1 and Group Clearer implementation work continues with our vendor, Expertus, to modernize wires and clearing and settlement, and ensure we are ready for the introduction of the new Lynx system in 2021.
On Friday, the Interac Board of Directors approved moving the mandated dates of Interac Instant to June 2021, with a temporary reduction in working group activity until the situation stabilizes. Recognizing this project is still of high importance to you, we intend to continue development at this time and will be reviewing timing with key stakeholders. We are here to support you in prioritizing this work, while respecting the current environment and allowing time for emerging priorities. Central 1 will continue our active 1:1 engagement with Interac, as one of their Implementation partners, influencing the launch plans and helping address product marketing and other implementation opportunities, to help you and the system prepare for the new Interac features.
We will monitor the overall Payments Canada and Interac roadmap and timelines for payments modernization. If there are any additional roadmap changes, Central 1 will share with you in a timely manner and the team is available to assist you with any questions you might have.
Keeping you informed
I will continue to send you weekly emails to provide you with a summary of our actions and important highlights on how Central 1 can support you and your members. In addition, we have dedicated pages for COVID-19 updates on the Secure Site and central1.com, as well as daily updates through The Hub.
If you have any questions or comments, please reach out directly to me, our relationship managers, member relations staff or our Client Support Services team.
President & CEO