Technology giving mutual banks ‘a competitive edge’
2 December 2013
Technology is giving the nine mutual banks the opportunity to secure a competitive edge against their larger brethren, says Defence Bank Chief Executive Officer Jon Linehan.
Citing the example of Defence, he says 86% of its transactions are now online – reflecting both a diversified client base spread across Defence installations in the northern part of Australia and a young client base with 62% of members aged between 18 and 45.
“What mutual banks can do is move quickly to offer the availability of options for the consumer, varying from the branch, online video – a major Defence Bank initiative – and social media, and by doing so be cost competitive with the major
Linehan says that these new avenues for interacting with consumers are obviously open to the larger banks, so what the mutuals have to do is be smarter in how they use this technology.
“There’s no doubt in my mind that Australian banking is a long way behind other sectors of the economy in its use of social media.
“This means there are opportunities that will allow the mutuals to enter this space more quickly as, in many instances, they are less tied to the traditional branch system.
“There’s no better example of this than the video centre that was first established by Defence Bank for conferencing between staff, and now is being used to give a human face to our staff as they talk to our more than 90,000 members.
“Not only does it save the cost of flying financial planners to remote locations, but is also addresses the critical issue of trust.
“When people are talking about large sums of money, whether it’s a loan for a house or their superannuation, then they want to put a face to the person they are talking to. The difference between that-to-face interaction and a first-name person in a call centre is, in our experience, very significant.
“What the video is doing is not only providing access to advice, but also access to trust and personal interaction.”
Linehan says what compliments the mutuals’ potential advantage with technology is the small branch networks.
“In saying this I am not decrying the branch network. It will remain integral to the banking system, with the significant transactions such as lending and large investments still the domain of the branches. It reflects the fact that customers still want to see the branches; the bricks and mortar give them a sense of security.
“That said transactions across the counter are expensive, and the banks they move quickly to use the new technologies while still retaining a core branch network will gain a competitive edge,” he says.
For further information, contact Jon Linehan on 03 8624 5872 or email@example.com
About Defence Bank
Defence Bank is a Mutual Bank with more than $1.4 billion dollars in assets under management and more than 91,000 members. Defence Bank commenced operations in March 1975 as Defence Force Credit Union Limited (Defcredit) before becoming Defence Bank in 2012. Today, Defence Bank has 43 branches around Australia.
Serving those who protect us
Since the global financial crisis Defence Bank has doubled its size, capital and earnings. It is regarded as one of Australia’s most innovative Mutuals and has record levels of member satisfaction and staff engagement.
Its members are typically located outside metropolitan areas and often in remote locations which are commonly underserviced by the large Banks. It’s why Defence Bank focuses heavily on delivering technology solutions. Members tell Defence Bank that they want more flexible Banking choices, which means Defence Bank is constantly looking for new technology to deliver what members want.