Bendigo Bank touts customer credentials in stellar financial results

Bendigo and Adelaide Bank MD says the group's customer standing and leading position as a trusted retail bank will help it grab marketshare in a volatile market struck by trust issues

Customer satisfaction and advocacy are the cornerstones of commercial success for Bendigo and Adelaide Bank and have put the organisation in the best opportunity possible to grow in a volatile environment where trust and reputation are paramount.

That’s the view of the group’s managing director, Mike Hirst, as he went through the ASX-listed financial provider’s strong half-yearly financial results today.

Bendigo and Adelaide saw underlying cash earnings grow 10.7 per cent to $225.3 million year-on-year, resulting in net profits of $231 million. Total income was also up 6 per cent to $842.9 million, leading Bendigo and Adelaide Bank to offer a final fully franked interim dividend of $0.35 per share.

Managing director, Mike Hirst, said the results reflected the bank’s focus on customer, driving success for its stakeholders, and status as Australia’s most trusted retail bank. The group topped the Forrester Customer Experience Index for Australian organisations for the third consecutive year in 2017 and also has the highest home loan customer satisfaction rating of the banks, according to Roy Morgan research.

“The bank experienced strong growth in loans to home owner occupiers in an environment where competition for those customers remains fierce,” Hirst said by way of example. “While lending to home investors was curtailed by caps applied by APRA, all other metrics indicate that we are fulfilling our customers’  needs by providing a premium banking experience.”

Bendigo and Adelaide Bank chief customer officer, Marnie Baker, outlined the core pillars of the bank’s strategy as enabling customer choice, exploring new opportunities for growth, partnerships, developing its employees, and driving capital and operational efficiency. The ambition is to deliver success for customers and partners in an environment where all people grow, contribute and feel valued, she said.

To illustrate how far Bendigo has come on this path, Baker noted a 2.52 per cent rise in net customer numbers growth over the half year, and a customer Net Promoter Score (NPS) of +27 over the period. The bank also saw its employee NPS increase 65.9 per cent and its diversity and inclusion score lift 76.6 per cent over the half, with gender diversity in senior leadership growth now at 40.5 per cent.

Baker then took investors through the longer-term investments Bendigo is making to keep its customer and strategic focus. Among these are improvements to platforms, voice-of-customer and mobile relationships, as well as increasing digital capability. This includes better data and insights mining, the launch of Bendigo’s digital bank, and the group’s partnership with startup, Tic:Toc, allowing customers to secure a home loan in just 22 minutes online thanks to real-time processing and risk assessment technology.  

Related: Read more: Bendigo Bank rolls out customer-led metrics framework



Bendigo and Adelaide Bank invests in real-time personalised interactions with customers

Another focus is adjacent market partnerships, such as that with universities like Deakin University, a shared value partnership to provide a Community Bank that’s already exceeded expectations and is achieving positive outcomes, Baker said. To date, community Bank has delivered $183 million in community contributions and encompasses 320 branches with 90 in communities without another provider.

“We’re actively working with other university to grow this opportunity and have two unis going through the initial campaign process, plus eight others interested in speaking to the bank,” she said.

Bendigo has also partnered with the National Disability and Insurance Scheme, plus several other organisations to create a new online marketplace, Because. This allows support provides to compete and assess models, Baker explained. This new marketplace then opens up broader markets for Bendigo, such as aged care, she said.

Keeping the focus on staff is another vital piece of the puzzle, Baker said. “It’s clear in this environment that resilience is essential for our people, and the culture we are looking to build around innovation, collaboration, engagement and just having a go, has led us to launch a new program, Equip, this past year,” she explained. 

This saw Bendigo bring on 50 trainers and 260 coaches nationally and has been widely attended by staff, with feedback overwhelmingly positive to date, she said.

“With all the change and opportunity present to us, we needed to improve our ability to respond, to drive simplicity and drive productivity to get to market faster with innovation and continually deliver improvements,” Baker continued. “We’ve been on a journey, and rolled out the Agile way of working, initially in our technology areas, but also now across the wider organisation.”

But with so many brands and business models, it’s important to simplify to better present to the market. This saw the amalgamation of Rural Bank customers into Bendigo systems. The group has also reviewed its telecoms business and has entered into memorandum of understanding to merge its telco business with specialist local telco company, Bendigo. The deal is expected to complete in March.

In addition, partnerships are a strategic priority, providing growth and new reach, capability improvements and adaptability and improving the bank’s ability to utilise emerging technologies, Baker said. This was key to the newly formed digital bank, for instance.

Overall, Hirst said the organisations is a great position to grab market share in today’s current market conditions.

“We are moving into a very positive environment for this organisation,” Hirst concluded. “If you think about the things challenging the industry at the moment, they’re things that are going to play in our favour and smaller participants. The focus by the government on competition, and desire to build a level playing field, the issues at risk at the moment for other players around trust, risk, reputation and doing the right things for customers, are all going to play into our hands as we move forward.

“The opportunity for our bank has never been greater.”

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+:google.com/+CmoAu

 

 

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