Bendigo to shed ‘old ways’ and ‘re-engineer’ practices

In an address to shareholders, outgoing Bendigo and Adelaide Bank chairman Robert Johanson stressed the non-major’s commitment to transforming its banking practices to better align with changing consumer preferences, adding that traditional modes of banking are increasingly falling out of favour with consumers.

“Customers are choosing to deal with us remotely,” he said.

“Our customer interactions and relationships are intermediated most often by the internet and the mobile phone, not by face-to-face conversations, though the ability to do that when needed is highly valued.

“We all expect immediate and seamless access and functionality whenever we choose, and wherever we are.”

Mr Johanson – who will step down from his role as chairman following Bendigo’s AGM on 20 October – called into question the utility of proprietary networks, adding that Bendigo Bank would be reimagining its service proposition.

“Everything needs to be reassessed – the role of branches, the usefulness of old data systems and ways of working,” he said.

“[A] major re-engineering of the way we work together and connect with customers is underway. This will affect every part of the business and every relationship.

“The old way of working and its cost are simply unsustainable.”

As part of its digitisation strategy, Bendigo has invested in online home lending platform Tic:Toc and mobile banking platform Up.

Adelaide Bank has also sought to strengthen its presence in the broker channel, by launching white label funding arrangements with Aussie Home Loans and Connective.

Mr Johanson’s remarks follow an analysis by UBS Research, which found that mortgage origination via the big four’s proprietary networks has fallen from a peak of 48.3 per cent in 1H13 to 37 per cent as at the close of 1H19.

Meanwhile, the major banks’ share of the broker market increased from 30.6 per cent to 34.5 per cent over the same period.

As a result of the shift in channel origination, the major banks’ share of new home loans has dropped from 78 per cent in 1H13 to 71.4 per cent.

ANZ CEO Shayne Elliott previously called into question the efficiency of the branch network in the mortgage origination network, claiming that it was “not a terribly efficient or well used avenue for home loans”.

[Related: Power of big 4 ‘fading’ as branch origination dwindles]