Money Minute – December 14 2017 Changing Face of Banks

Changing Face of Banks

Ross Greenwood: Ill tell you what, sitting in the heart of Australia’s great retail precincts, in Pitt Street Mall, in the middle of the city, gearing up for Christmas, and of-course, its busy.

But the breaking news out of finance today is the Commonwealth Bank. Yesterday, late, it filed its statement of defence against the allegations it had more than 56,000 breaches of AUSTRACS provisions, which means they had to report each time there was a transaction of more than 10,000.

Now, the Commonwealth had admitted that it did not report in a timely matter more than 53,500 occasions. Now, the whole point about this is, it says it comes from one breach – that’s the way in which its trying to mitigate the amount of fine it gets hit with.

But the whole point about this is, AUSTRAC today is likely to hit the Commonwealth with 100 more breaches. It could even allege some allegations but it actually allowed money to be sent overseas for terrorising financing.

Anyways, more of that later one.

The face of banking, as a result of that, is changing no doubt.

But also retail. So let’s say for an example, earlier this week, the ANZ sold out its life insurance business for about $2.4 billion to Zurich.

Then we go to retail here, say for an example Westfield. The Lowy family of course sold out its Westfield European business for some $33 billion.

So the face of retail, the very face of banking it changing.

Across the road, right here – you got Microsoft. Its all about the experience, just like an Apple store.

So when it comes to banking, things have to change. And that’s being seen today with the opening of a new bank. Well actually its more like a store, a retail precent. This is Suncorp.

Suncorp is well known for insurance and banking. So what they’ve done is create a new shop front, right in the heart of the Pitt St Mall.

Now, you might argue “why one earth would you go an do all of this stuff?”

Well, Chris Flemming is the stores manager for Suncorp. Chris is with me now –

Chris, this does not look like a bank. There is a coffee shop, there’s the whole thing. Why on earth would you do this? What can a person do in this store they couldn’t normally do in a bank branch?

Chris Flemming: Yeah, Ross. As you can see, we are doing things differently here at Suncorp. Its not just about coming in for a Home loan, we can link in conveyancing, building, pest, and the insurances that can go with it.

Ross: But you’ve made this look like a retail store – quite deliberately, haven’t you?

Chris: Yeah, l we need to design stores like this with the customer in mind,. Make it easier, simpler and be in the heart of where customers are coming to shop with a retail mindset.

Ross: But is this also because people these days are using online services, so much more, that the need for a old-=fashioned bank branch is not as great as it once was? So therefore, when people come in, and interact with you physically, that they are excepting different things?

Chris: Yeah, I think people want experiences, and that’s what this store does. It is about coming and having great conversation, grab coffee and we can support people to financial wellbeing.

Ross: You’re serving coffee here, are you charging for them or not?

Chris: No, no – all free.

Ross: Free Coffee from the bank, who would’ve thought that.

So can I tell you that this is the way in which banking is changing, retail is changing in this new online world.

Markets

Overnight, the Dow Jones Index up 136 points. The Dollar 76.2 US Cents.

 

Quicklinks to recent Money Minute progammes

 

Money Minute – December 14 2017 Changing Face of Banks
Money Minute – December 12 2017 Bitcoin Bears Have Claws
Money Minute – December 11 2017 Delicate China
Money Minute – December 8 2017 The Next Tax Crackdown
Money Minute – December 7 2017 Family Budget Squeeze
Money Minute – December 6 2017 Amazon Fizzler
Money Minute – December 5 2017 Tech Drives Cheap Prices
Money Minute – December 4 2017 Rates on Hold
Money Minute – December 1 2017 Banks Commission
Money Minute – November 30 2017 Bitcoin Boom
Money Minute – November 29 2017 Economy is ‘Robust’
Money Minute – November 24 2017 Myer Crisis Meeting
Money Minute – November 22 2017 Tourist Dollar Battle
Money Minute – November 21 2017 Who Pays for Tax Cuts?
Money Minute – November 20 2017 Bank Royal Commission?
Money Minute – November 17 2017 Job Prospects Brighter
Money Minute – November 16 2017 The Big Squeeze
Money Minute – November 15 2017 High Noon At CommBank

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