How Heritage was named the "Best Bank in Australia"
When Forbes released the list of the best banks in the world, few would likely have tipped Queensland-based Heritage Bank to be among the best in the world and number one in Australia.
When Forbes released the list of the best banks in the world, few would likely have tipped Queensland-based Heritage Bank to be among the best in the world and number one in Australia.
It would have been easier, however, if you'd looked at last years' results where Heritage was named tops in the nation. They were also recognised by JD Power as being Australia's Most Authentic Bank.
We asked Heritage Bank's CEO Peter Lock to give his opinion on why Heritage comes out on top and why customer-owned banks are leading their big four competitors.
What does being listed among the best banks in the world - and the best in Australia - mean to you?
Being rated number one in Australia means Heritage is living up to our "people first" philosophy and delivering for our members. As a customer-owned bank, everything we do is about what's best for our members. Unlike the listed banks, we don't have the inherent conflict of trying to serve both customers and shareholders. We don't have to maximise profit to pay dividends to shareholders. That means we can focus totally on delivering for our members.
The Forbes accolade is based on a survey of customers, so our number one ranking means we are giving them great value and a great experience with their banking. It's also wonderful recognition that a regionally-based bank such as Heritage can not only outperform the best in Australia, but match the best in the world. We're very proud of the honour and we hope it helps more and more banking consumers around Australia to consider us as a viable and satisfying alternative to the majors.
What would you say are your key points of differentiation?
What shines through to me is our authenticity. We're absolutely genuine about putting the interests of our members first, and everything we do is centred on their needs. That authentic care for our customers is not something that can be faked, it's hard-wired into our culture. That's why international analysts JD Power named us the most authentic bank brand in Australia earlier this year. Our genuine customer centricity is reflected in the experience our members receive when they bank with us.
That means extremely competitive rates, a wide range of products, comprehensive online banking channels, a 24/7 Australian based contact centre, and friendly personalised service. It's an outstanding overall package. That's backed up by independent analysis from research company CANSTAR, which found that our customers were almost $79 million a year better off last financial year through banking with Heritage rather than one of the big four banks.
I'm sure you don't consider gathering global accolades when you go to work each day. What are your primary motivators?
As a mutual, we are motivated every day by what's best for our members. That's why we exist. We're owned by our members and they have trusted us to be the custodians of their continued financial wellbeing. Heritage has a 145-year history of helping our members achieve their financial dream.
I feel a real responsibility to honour that legacy by setting up Heritage to be successful for another 145 years, and more. So I am also motivated by the need to ensure Heritage keeps evolving and meeting the changing needs of our members over time. One of our four key strategic objectives is to build a bank to be proud of, which is all about striving every day to be better and build the value of our bank for our members.
How do you keep your team focused on your core mission?
We put a lot of effort into reinforcing our vision and mission, and our core values. Our team are 100% on board in focussing on doing the right thing by our members. That's an ingrained part of the Heritage culture already. I constantly hear amazing stories about how our team members go above and beyond their regular duties to help out our customers. So our job becomes reinforcing that mindset and channelling their commitment in a positive way. A good example is our Heritage Heroes staff awards program, which recognises outstanding performance by our team members in categories that are based around our values.
The awards recognise and reward our team members for ways of working that support our core mission. Even better, the awards recipients are nominated by their fellow team members, so their colleagues are taking the time to congratulate them for a job well done. That peer recognition is a powerful way to reinforce our culture.
How have COVID restrictions changed your operations?
We've had to make significant changes to the way we operate but I am very proud of our team for the way they have adapted quickly and continued to be very productive. We've kept all our branches open, with extra hygiene precautions and limits on number in a branch at any one time.
About 70% of our normal office-based employees have been working from home, which is really quite different but has been very effective. We're offering hardship relief packages to customers hit by COVID, and we've had a huge spike in the number of calls to our contact centre, especially in the earlier days of the pandemic. That meant we had to be creative in our response.
We drew together people from other parts of the business to create a hardship response team, and assign staff from branches to answer calls to the contact centre. The hardship team did a fantastic job, processing the equivalent of three or four months of lending applications in just a few weeks. A significant trend we have noticed through COVID has been an acceleration of the shift to digital banking, and a move away from cash. People were unable to get out of their homes and access cash, so online banking become the only option.
We've had many customers, who had never previously used online banking channels, trying them out for the first time during COVID - and loving them. We've even had customers bringing flowers into branches to thank our staff for setting them up for online banking, because they found it so useful. This acceleration of digital has been happening right across the industry, so it does represent a fundamental shift in banking.
You held senior roles at traditional banks, like CBA and St George Bank. What did you take from those organisations and apply to Heritage?
I learnt a lot about leadership during my time at the bigger banks, especially being able to closely observe the senior leaders of those organisations and being exposed to their different management styles. What also became clear to me the different impact you can have as a leader.
The sheer size of CBA meant that decisions you took could have implications at an industry level. However, at St George and even more so at Heritage, the decisions you make have impacts on individual customers. The smaller organisations are much close to the coal face and you need to be very aware of the direct impacts decisions have on customers.
Conversely, what are you able to do with Heritage that you wouldn't have been able to do at one of the big four?
At a smaller bank like Heritage, the CEO has a hugely influential role in setting the tone and the culture of the organisation. The team members are looking to you for their lead, and they feed off the energy you show. If you are energetic and enthusiastic, that flows through the rest of the organisation, and sets the tone. There is a much more direct impact from what you do.
Similarly, the smaller nature of Heritage allows us to do things much more quickly. You can make a decision today and see the impacts of it tomorrow. The big banks are like battleships, they pack a fair punch, but they are unwieldy and take a long time to change course. Heritage is like a patrol boat, much more nimble and flexible. The ability to make decisions quickly and implement them helps us respond better to customer needs.
