1. Reinventing ‘mutual’
Rowan Dowland

2. Bank Australia
1957
CSIRO Employees Credit Union
1957 – Various different mergers occur, industry & community credit unions join force, we launch mecu
1 September 2011
A credit union becomes Australia’s first customer owned Bank
August 2015 bankmecu became Bank Australia
Overview of Bank Australia

3. Sydney CBD flagship branch
Footprint
Total assets
$4.0 billion
Sydney CBD flagship branch
Second half 2016
FY16 growth
Loans 20%
Deposits 12%
Capital reserves
$437m
Capital adequacy
18.67%
Customers
126,000
Staff
350
24 Branches
In VIC, ACT, NSW, QLD & SA
Contact & Lending centres in regional Victoria
Bank Australia at a glance

4. Our Strategy Sets Our Future Direction
Our core business is retail banking
Vision:
To be Australia’s leading customer owned responsible bank
Australian Customer Owned Bank of the Year 2016
We are in business for our customers who own the Bank
Purpose:
To create mutual prosperity for our customers in the form of positive economic, personal, social, environmental and cultural outcomes
By living our values we will achieve our vision
Responsible to:
Our customers
Communities
The environment
International cooperative principles remain part of the Bank’s corporate strategy to this day

5. Purpose
Post WWII – Provide everyday working people with access to credit
GFC – Customer owned model that is honest and transparent
Today – values based bank creating mutual prosperity
1957
CSIRO Employees Credit Union
1957 – Various mergers see industry & community credit unions join forces - launch mecu
1 September 2011
Become Australia’s first customer owned bank
17 August 2015 bankmecu becomes Bank Australia
2003 – Adopt sustainability as a driver of the bank

6. Strategic Planning Matrix
The Board’s strategic plan must satisfy the following five principles:
Governance adherence to values create mutual prosperity
Growth at system or above
Performance – net interest margin must cover costs
Productivity – minimum performance ROA >0.40%, Cost to Income <75%
Risk Management – Capital 12.5%, Liquidity 10.0%

7. One simple value proposition

8. Expectations

9. Brand Values

10. Our Target Market
Traditional
Current
New

11. Target Market Customers
Metrotechs are:
Generally very satisfied with BA and are more likely than the average customer to recommend us to someone
Again about half consider BA their main bank
They are more likely to have an online savings account, everyday banking account and debit care with us – and less likely to have a term deposit – again you can see stage in life determining the kind of products that people need

12. Target Market Customers
As you can see from the Strategic Plan – we remain very focused on our identified target market – socially aware customers.
I’m sure you’ve all heard about Leading Lifestyles and Metrotechs by now – I know the marketing team is working on some additional tools and information to help every staff understand who our target market is and how we’re working to attract them to the bank.
For the first time our customer research is helping us understand these two groups better.
Leading lifestyle customers are:
Generally satisfied with Bank Australia and show a good likelihood of recommending the bank to others
About half consider BA their main bank, which is a good thing
They are less likely to have a home loan and more likely to have a term deposit – mainly due to their stage in life – being slightly older

13. Target Market Customers
38.13% or 45,546 customers are in our target market (Q4 FY16)

14. Target Market Customers
44.71 % of new customers are from our target market (Q3 FY 16)

15. Target Market Customers
Average age of new customers is 36 years. (Average age of all customers is 49)
49% of all new customers are aged 18-39

16. Target Market Customers
Average customer value (deposits & loans) of our target market is $63,544 (Q3 FY16)
Average customer value of our traditional target market is $37,802 (Q3 FY16)

17. Why People Join Us
Over the past couple of years we’ve been attracting record numbers of new customers by focusing both on our responsible values based brand and on ensuring we are highly competitive in our pricing.
As you can see that it is both of these strategies that are driving new customer acquisition – values and pricing.

18. Customer Centric Issues most important to our customers
Acting on climate change
Reducing domestic violence and its impacts
Encouraging growth in renewable energy
Treating refugees fairly and humanely
Improve mental health in the community
Closing the gap between indigenous and non-indigenous Australians
Protecting endangered species and habitat

19. S&P Global Ratings
“We expect Bank Australia’s business base to strengthen (including indicators such as share of main bank customers and share of wallet) following the bank’s rebrand to Bank Australia.
We believe the move provides a stronger emphasis to the bank’s underlying ethos - responsible banking – which in essence, attempts to capture socially aware customers.
We believe Bank Australia’s primary focus on responsible banking which is entrenched at all staff levels of the bank is an attractive feature for customers and point of differentiation to support its expectations of continued growing customer support.
We also consider management’s articulation and effective messaging of its ethos to both new and existing customers is a positive point of differentiation with some peers”.

20. Points to Consider Questions For Friendly Society Pharmacies
Why would I shop at a FSP?
How are you different to you competition?
What’s your strength?
Who is your target market?
What’s their CX expectation?
How and where do you create value?
Do you have a social licence to operate?