Customer owned banks pump up the publicity as majors face the heat

The Customer Owned Banking Association (COBA) recently launched a new campaign dubbed “Own Your Banking” to encourage Australians to look beyond the big four at alternatives in the banking sector.

The campaign was a direct response to the growing interest and enquiries from the public about customer-owned banking following the negative stories about the majors coming out of the royal commission, according to a news release from COBA CEO Michael Lawrence.

“Our model is the only alternative that can claim it is solely customer focused because 100% of its profits are used to benefit customers,” Lawrence said in a statement. “Four million Australians already own their banking – they are customers of mutual banks, credit unions and building societies across Australia.”

Providing customer-centric alternatives
Heritage Bank supports the campaign because it helps open the eyes of more people to the viable and customer-centric alternatives the mutual sector offers, Heritage Bank CEO Peter Lock told MPA.

Revelations of the royal commission have alarmed people, prompting them to look for alternatives. However, Lock finds that “many don’t realise that the customer-owned sector offers the same high-quality banking products and services, but via a much different model that is much more focussed on people rather than profits”.

Credit Union Australia (CUA) also welcomes the campaign. “Many consumers are shopping around for alternatives, so it’s important that our sector is educating consumers on the difference between ownership models in banking,” CUA spokesperson Morag MacKinnon told MPA.

Lock sees the campaign as an opportune time for the sector to remind Australians that there are many other lenders that people can depend on “for a more satisfying banking experience”.

Going the extra mile
To improve the experience of brokers and customers, Heritage has been reviewing its technology solutions over the past year. By collaborating with an IT company, the bank is able to provide a more efficient mortgage workflow program that leads to quicker loan processing, turnaround times and decisions. Heritage’s next project promises to deliver brokers a quicker response and application approval time that’s fully documented.

CUA has recently started seeing signs of increase in broker lending. The lender believes it’s primarily due to its product changes, such as a range of competitive three-year fixed rates for residential investors with rate reductions of up to 0.35% p.a. on some products, according to Morag.

Heritage’s investment in the broker channel includes sponsoring industry events such as the Opportunities for Women initiative run by the MFAA.

For CUA, the campaign builds on its brand awareness activities, which includes traditional marketing and investment in sporting sponsorships with the Queensland Cricket Association. CUA is also working closely with the Combined Industry Forum.

Over the past 12 months, Heritage has seen a shift towards non-major banks because people are becoming more aware of the offerings. While Heritage hasn’t seen an influx in loan flows yet as a result of the big four tightening credit, it may be on the horizon, Lock said.

“The overall sentiment has definitely moved away from major banks in recent times,” he added. "This will no doubt have a positive impact on Heritage and other non-majors.”

 

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