6 ways community banking makes a difference

By Beth Wallace

In the wake of the Hayne Royal Commission, banks are realising the importance of having a purpose that extends beyond shareholder interests alone.

It’s a concept that Bendigo Bank’s Community Bank has subscribed to since its inception 22 years ago, with its shared-value ethos placing customers and communities at the core of its business. 

For Nan Caple, chair of the Community Bank National Council, this philosophy appeals to the growing cohort of people that want to bank with a socially responsible institution. 

“They want the dollars they spend to have more than just an impact on themselves,” she says.

Here, Caple outlines six benefits of Community Bank’s “profit-with-purpose” strategy.

1. It strengthens communities

In the late 1990s, more than 2,000 bank branches closed across Australia, leaving many regional and remote communities without banking facilities and driving economic decline. Even in today’s largely cashless society, Caple believes access to local banking and financial services is imperative – not just to ensure an inclusive financial system, but to build prosperous and sustainable communities. 

“It’s about holding communities together, creating a reason to gather and providing a nurturing environment to do business,” she says.

2. It redistributes profits locally

Community Bank profits are invested back into the communities that generate them via grants, scholarships, sponsorships, donations and partnerships. Over the past 22 years, the network has invested more than $250 million in Australian communities – A$21.7 million in the last financial year alone – for projects such as sporting facilities, emergency services upgrades and cultural programs. 

Caple adds that these figures don’t factor in the multiplier effect, whereby seed capital from the banks is leveraged by local fundraising efforts and government support. 

“There have been examples of million-dollar sporting facilities created and hospitals kept alive in rural communities off the back of these initial grants,” she says.

3. It empowers people to shape their communities

With Community Bank branches operated as franchises, it’s up to the directors of each local enterprise to decide how to spend their profits. This model equips leaders with the skills, knowledge and confidence to improve their communities on their own terms. 

As Caple explains: “It's the people who live in a community that are best placed to create projects that will enrich that society.”

4. It supports local economies

Aside from providing an income stream, Community Bank offers local employment, leadership and investment opportunities; likewise, salaries, rent and other expenses associated with each branch are recirculated into communities. 

In FY2019, the Community Bank network employed more than 1,500 people, with A$134 million in wages and services spent locally and more than A$3.07 million paid in dividends to local shareholders.

5. It builds brand awareness

It is not just customers and communities that benefit from the Community Bank model. Thanks to the network’s broad reach, partner Bendigo Bank is recognised for its strong community connections – a reputation that engenders trust and respect across the entire business. 

Caple says bank branches have even become rallying points for relief efforts during times of crisis, such as last summer’s bushfires, adding: “That's come about because we've had presence in these communities.”

6. It delivers customer insights

Through its customer and community-focused model, the Community Bank network gains deep understanding of its clients’ needs – insights that Caple says can be fed back into the wider business. 

“You've got 1900 directors, 1500 staff, 70,000 shareholders and there are terrific opportunities to work with these people about how life can be improved and how the services can be delivered in a better way,” she says. 

“It provides an incredible connection to communities from a broad customer base.”

To find out more about Bendigo Bank’s community work visit https://www.bendigobank.com.au/community/.