The Financial Health Exchange has been reaching out to our members across the country and beyond to find and share examples of good practice in financial health work. We got into contact with Carly Wright, Senior Corporate Affairs Consultant from customer owned Bank Australia to discuss how their basic bank account forms part of their wider financial inclusion strategy. Carly is also the project manager for Bank Australia’s Financial Inclusion Action Plan.
Founded in 1957, Bank Australia is a 100% customer owned, responsible bank. They aim to be a genuinely progressive bank that creates mutual prosperity for their customers and the communities they live in. For example, through its Impact Fund, Bank Australia distributes 4% of its after-tax profits each year to projects that address social and environmental issues chosen by customers.
What were the drivers that told you there was a need for a basic bank account?
In 2015 the bank went through a major rebrand and as part of this we updated our retail products and changed our fee structure. While we already had a fee-free pension access account, it was limited to aged, veterans and disability pensioners, so we got a lot of customer feedback highlighting the need for a basic account with eligibility beyond those areas.
In 2016 we were invited to be one of 12 trailblazer organisations in a national financial inclusion initiative – a government funded program to help address the disadvantage faced by more than 3 million Australians who are excluded from mainstream financial services. In the process of developing our Financial Inclusion Action Plan we saw an opportunity to address this feedback and introduce a basic account to ensure all our eligible customers have access to fee-free banking.
How did you go about developing it?
The account was modelled on the Australian Banking Association’s basic account guidelines, which have been adopted by a number of banks in Australia.
We listened to feedback from customers and also sought feedback from a number of partners, including street magazine The Big Issue. We ran focus groups with Big Issue vendors, who are either homeless or financially vulnerable, to gain insight into what they needed from a bank – a basic account with no fees was paramount.
What are the requirements and criteria of the basic account?
Eligibility for the basic account is available for anyone with an active Commonwealth Pensioner Concession Card or Health Care Card (a card provided by the Australian Government to low income earners). Government pension or relevant benefit payments need to be paid into the basic account.
The Bank Australia Basic Account
- No account keeping fees
- Free monthly statements
- No minimum deposit amounts
- The ability to set up and cancel direct debits
- No overdrawn fees
- The ability to access a debit card (VISA debit) at no extra cost
- Free and unlimited transactions through: branch (over-the-counter services), telephone banking, internet and mobile banking, Electronic Funds Transfer at Point of Sale (EFTPOS) and bank-owned and networked ATMs across Australia.
What do you hope the impact of the product will be?
The account means customers who need it most will have access to fee-free banking and can more efficiently manage their finances. However, it’s really one piece of a much bigger puzzle when it comes to increasing the financial inclusion and resilience of our customers and the communities they live in.
How will you measure the impact?
For the basic account, we’ll continue to track the uptake and ensure branches are offering it to eligible customers. More broadly, we’ll be working against a national framework that will track the progress of our Financial Inclusion Action Plan through data collection and analysis of customer behaviour over time.
What has the response been?
We’ve had a really positive response from customers and stakeholders. Particularly from our partners in the financial inclusion space like Good Shepherd Microfinance, the organisation which coordinates the National Financial Inclusion Initiative.
How does it fit into your financial inclusion strategy?
As a customer-owned responsible bank our approach to banking promotes financial inclusion. We were established out of a need to help people who had been excluded by mainstream banks from accessing banking services, and staying true to these origins has helped ingrain financial inclusion in our DNA.
Our financial inclusion practice has focused on responsible lending and providing access to products and services that fit with our customers’ needs. We avoid putting customers in positions where debt puts them under financial pressure by only lending to those who have the capacity to repay debt. And we work closely with vulnerable customers and communities to help them manage their money.
The national FIAP program provides us with an opportunity to challenge ourselves, learn and work with partners to make a much greater impact.
How does working in partnership impact the initiative?
Being one of the financial inclusion trailblazers in Australia, we have the opportunity to work with other like-minded organisations to tackle the issue of financial exclusion. The collaborative approach of the initiative means we will be able to share learning and knowledge, test ideas and work with partners to make a tangible difference.
What’s next for Bank Australia?
Bank Australia’s commitment to financial inclusion is already embedded in the operation of the bank. Being a leader in the national financial inclusion program has motivated us to push ourselves to build on this and create greater positive impact.
We employ a holistic approach to financial inclusion, rather than creating separate services for people who have been excluded. We don’t provide financial literacy or fee-free banking in isolation. Instead we are designing a model to meet multiple needs, for example, financial literacy, low cost products and referrals to financial counsellors and other social supports.
There will also be a strong focus between financial inclusion and areas that are important to our customers, like reducing family violence and its impacts, reconciliation with indigenous peoples and fair treatment of refugees.
Read more about Bank Australia’s Financial Inclusion Action Plan here.