More Stories Like ThisShared Value
How Banking Can Benefit Communities
How Banking Can Benefit Communities
Related
Finance & Investment
Water & Sanitation
In the spirit of using the power of storytelling to motivate others to implement shared value in their organizations, I wanted to share the story of the Australian bank that I work for, Bendigo and Adelaide Bank Limited. In essence, the bank does a deal with communities to share the value of branch banking with them.
In response to bank branch closures in rural Australia, about 15 years ago Bendigo and Adelaide launched what we call "community banking" here in my country. (It should be noted that there are some significant differences between this model and community banking in the U.S.) Under our model we partner with local communities who have a demonstrated demand for branch banking, in which the community assumes responsibility for parts of the offering that benefit from local connection (e.g. local marketing, customer acquisition, relationship management, etc.) and the bank assumes responsibility for parts of the offering that benefit from scale (IT, compliance, capital/funding). The community is then remunerated for those responsibilities based on the size of the relevant business, and after costs, spend the majority of that remaining remuneration in the community by way of community grants.
For example Anglesea is a coastal community in Victoria, Australia that is especially prone to bushfires; and the local volunteer fire brigade was in need of funds to revamp their outdated fire station. The new building would include a training facility to better educate volunteers and conserve water used during practice sessions. By partnering with the Bendigo and Adelaide community bank branch in Anglesea, the brigade has been able to start raising the money they need. Bendigo contributed $A100,000 to the project directly, and the rest is being sourced through the community using a funding website and the selling of “sponsor bricks” with donor names on them to build the new fire house. The final product will be a top-of-the-line, greener facility that should produce better-trained volunteers.
In the 15 years that we have been operating this community banking model, over $A110 million has been granted by these communities to projects that they have recognised are important to them. In addition to the fire station, these funds go to a number of other projects that benefit the community: From funding arts education programs to providing healthy breakfasts in schools. You can see some of these stories and more by visiting our YouTube page. It is easy to see that there is little difficulty in these sorts of outcomes being achieved through the traditional philanthropic initiatives of a major enterprise.
The model follows an internal philosophy of seeking to feed into prosperity and not off it. It brings a co-creation or shared value flavor to the bank’s retail offering, and deepens the relationships between the bank and its ultimate customers. The network has organically grown to 300 branches in Australia operating under this model. After 15 years of operation, the co-creation/shared value aspect of the model is recognized as being very powerful, and I'm sure it's potential is not yet fully realized.
If you have a shared value story to tell, share it with us by filling out this online form and we may feature your story in an upcoming post.
FEATURED
Spotlight
Business Fights Poverty is proud to be a Founding UK B Corp.
© 2021 Business Fights Poverty. The Business Fights Poverty logo and tree device are registered trademarks. View Terms and Conditions.
