Royal commission fallout leaves door open for community banks

Marnie Baker’s comments came on the first official day of a national community banking conference in Bendigo.

The conference is a chance to share ideas and network. It is also an opportunity for franchises to contemplate opportunities in the fallout from a royal commission that has seen many banks, lenders and superannuation groups under the spotlight.

Related: Lending practices questioned as Rural Bank – an arm of Bendigo Bank – fronts banking royal commission

Ms Baker said the royal commission had underlined the need for Australia’s financial institutions to take the best interests of customers, and community expectations, into account.

She said those values are at the very heart of the community banking model, which means there is an opportunity for Bendigo Bank’s network of 321 franchises to attract more customers.

“It’s a wonderful model of empowerment and sustainability because communities themselves run these banks. The profits are shared with that community to go back into building infrastructure and social fabric,” Ms Baker said.

In the two decades since community banks started, Ms Baker said over $200 million has been provided back into communities.

As community banking notches up 20 years of operation much of the discussion has turned to how it has helped transformed local economies.

Related: How one local community bankrolled a better future after being left behind

Many communities took up the model to counter centralisation and a drain of jobs and capital.

Former Bendigo Bank managing director Rob Hunt said he is not surprised by the resilience of the idea, even though it initially faced industry doubt over communities’ capacity to succeed.

“It’s transformed local economies in the sense of what they can do. People can say ‘we can do that, we can raise the money’,” Mr Hunt said.

“That’s what is really uplifting for me – of seeing people going from being angry about the loss of bank branches and wishing someone would come in and bless their town through to getting on the front foot and telling them (government investment bodies) to come and join us.”