Becoming Australia’s first ever customer owned bank is strong recognition by our regulator and the Reserve Bank of Australia of mecu’s work, over more than half a century, to create one of this country’s strongest and most successful mutually owned financial institutions.
In the very best traditions of the first ‘people’s banks’ to be created in Europe back in the 19th Century, "bankmecu" is about to embark on a journey offering Australians a new kind of banking. A responsible approach to banking where the customers own the bank.
"bankmecu" is a new kind of bank. It will be accountable to its customers.
Unlike all other banks we will not exist to simply maximise profits for a group of external shareholders. Instead we will take a responsible approach to banking and maximise benefits and value for our customers.
I encourage you to celebrate this achievement and I invite you to become a part of the future in banking at "bankmecu".
This question and answer sheet has been put together to help you understand why we have decided to call ourselves "bankmecu".
Helen Clarke
Deputy Chair
Why does mecu wish to call itself “bankmecu”?
- The change in name is about setting mecu up for the next chapter in our future. Attracting the next generation of customer owners who are interested in a responsible approach to banking. It is an historical and natural evolution for mecu.
- The Federal Government of Australia wishes to see the mutual banking sector provide greater levels of competition to the country's major banks.
- The Government is encouraging mutually owned credit unions and building societies to create the 5th pillar in banking.
- Creating consumer choice means raising awareness of the mutual banking alternative.
- In late 2010 the Federal Government of Australia invited a small number of Australia's largest credit unions and building societies to apply to the Australian Prudential Regulation Authority (APRA) to use the restricted term 'bank' in their name believing this would help credit unions like mecu better appeal to consumers.
- As a customer owned bank mecu would occupy a unique position in the market – combining the best attributes of mutuals (friendly, caring) with banks (secure, wide product range and accessible) in addition to our unique brand of responsible banking.
- Research we have conducted reveals acceptance by mecu members of the concept of a "customer owned bank" as opposed to being a "shareholder" and a "member".
Did we ask our members what they thought?
Yes. On learning of the Government's position mecu conducted a series of focus groups across the country to help us understand exactly what our members thought about this opportunity.
What did our member research tell us?
- Our research told us that mecu members already consider mecu to be 'my bank'.
- Our members also told us loudly and clearly that they did not want mecu to become a large bank motivated like other banks to make big profits at the expense of its customers, personal service or a more responsible approach to banking.
- Our members also told us they regard themselves to be valued customers and owners of mecu.
- We heard that people are very concerned and frustrated about the often impersonal and inflexible way large banks can treat their customers, preferring instead to maximise profits for their external shareholders, often at the expense of their customers.
- mecu 'customers' told us they believe an opportunity exists to create a new kind of customer owned bank and that mecu is well positioned to make this transition.
- The people we spoke with also understood how important it is for mecu's future prosperity that we attract a new generation of people who can offset the change in demand for services that will occur, as existing mecu customers grow older.
- These mecu 'customers' told us that as long as we stay true to our cooperative values and philosophy and continue to operate mecu in ways which truly reflect what's important to them then calling mecu a customer owned bank should help us appeal to other people who are looking for a better way to bank.
Why this name?
- When we did the research amongst our 'customers' we asked people to consider a series of other names expecting they may want to change the name altogether. They didn't. Instead people told us there's been enough changing of names over the years and that it was time to adopt one name and stick with it.
- Also a number of new 'customers' who have joined mecu since 2003 have only ever known us as mecu so they saw no reason to change the name.
- And finally mecu has developed brand recognition amongst the sustainability sectors here in Australia and around the world. We have won many awards for our work and built a reputation as mecu. Retaining the mecu in "bankmecu" means we don't have to start this process all over again.
So what are the 3 key reasons we are now going to call mecu a customer owned bank?
- We have a responsibility to our 'customers' to ensure mecu is well positioned to take advantage of this new and changing Australian banking environment.
- Calling mecu a 'customer owned bank' will position our cooperative strongly for the future and create additional 'customer value'.
- Cooperative banks have existed in other countries around the world for more than 100 years. We now have an unprecedented opportunity to create Australia's very first customer owned bank.
So what makes a 'customer owned bank' different to other banks?
A customer owned bank is a bank owned by its customers.
The term 'customer owned bank' has strong appeal because it is ....
- A bank that is accountable to its customers owners
- A bank that puts its customer owners first
- A bank that returns benefits back to its customer owners via better service and pricing
- A bank that creates wealth for its customer owners rather than its external shareholders
- No other publicly listed bank in Australia can ever make these same claims
So what's in it for the members, staff and the community?
We believe by appealing to more people who are in search for a better way to bank we will continue to grow mecu and by doing so we will;
- Further enhance value for mecu customer owners
- Create new jobs and employment opportunities for our staff and the communities we work in
- Impact more people's lives through our approach to responsible banking
So what’s changing?
Mainly it's our name and language that's changing.
- We will adopt the new business name "bankmecu".
- We will call ourselves a customer owned bank.
- The word member becomes customer and the word shareholder becomes owner because that's the language we discovered people already now use to describe mecu and their relationship with us.
And what remains the same?
There are some technical processes we have to implement that apply to banks that don't apply to credit unions but importantly our cooperative ownership, values, products, personal customer service and responsible approach to banking all remain the same.
One more time…
"bankmecu" reflects all the desirable characteristics of a modern strong financial institution in a way people can better relate to:
- The phrase customer owned bank is a powerful brand position that will gain acceptance, particularly amongst younger people
- Member, membership and mutuality are not concepts in the context of financial services that are well understood
- These new words reflect our customers' language
- People want to bank with someone they can trust with their money and trust to act ethically – "bankmecu" can make this claim
Does this mean we will remain part of the mutual banking sector?
Yes. There is now a new kind of mutual – it's called a customer owned bank and "bankmecu" will make history by becoming the first customer owned bank to trade in Australia. Everyone who has supported mecu and all the various credit unions that make up our history can be proud of this achievement.
Will members still own shares?
- Yes. Ownership of "bankmecu" remains the same as it is now.
- Each customer will continue to own one share.
- This is central to being a customer owned bank.
What exactly does this mean for mecu and when does our new name and logo come into effect?
- We think this change of name represents an exciting new step forward for mecu.
- It positions mecu for the future in a way we think better explains our unique mutual ownership to existing customers and new generations of people in search of a more responsible approach to banking.
- Our company name will remain mecu Limited. We will simply adopt a new business name called "bankmecu".
What does this mean for our interest rates & fees?
We will continue to offer competitive rates and fair fees. Calling ourselves a bank doesn't change the fact we will continue to work for the benefit of our customer owners.
How come it was not necessary for customers to vote for this change?
Adopting the new business name "bankmecu" does not require a change to our constitution so a member vote is not required.
How will our profit be distributed?
Again there's no change. Our profits will still be owned by our customers. They will continue to be transferred to general reserves where they are invested to generate returns that contribute to the running of "bankmecu".
This is exactly what occurs now.
Will mecu be listed on the stock exchange?
No. We will remain mutually owned and "bankmecu" will not be listed on the stock exchange.
Will our mission and values change?
No. Our values, culture and strong commitment to a more responsible approach to banking remain exactly the same as they are now.
Does this mean we are moving away from our commitment to sustainability?
Definitely not. If anything it strengthens the case for sustainable development and responsible banking.
By adopting the position of a customer owned bank and responsible banking we aim to attract new people to "bankmecu" who have not previously considered banking with a credit union.
Does this mean bankmecu will be more secure and will deposits still be government guaranteed?
Again everything remains the same.
All banks, credit unions and building societies must meet the same set of strict prudential standards and are regulated by the Australian Prudential Regulation Authority. The Federal Government deposit guarantee will continue to apply to funds held with bankmecu.