Bendigo wins accolade for Community Bank
Bendigo and Adelaide Bank has been ranked thirteenth on Fortune Magazine's prestigious Change the World List for its unique Community Bank model, which reinvests money into the neighbourhood it serves.
The 2017 list highlights 50 leading companies that are innovating to solve the world's biggest challenges through core profit-making strategy and operations. Companies were ranked based on the three criteria of measurable social impact, business results and degree of innovation.
This ranking sees Bendigo and Adelaide Bank as the leading Australian company and second in the world for a commercial bank. JP Morgan took the number one spot.
“Shared Value is a concept now gaining global momentum, although it has been central to our strategy for Bendigo's entire 160 year history," Mike Hirst, Bendigo’s managing director, told AB+F.
“The key to the success of the Community Bank model is the partnership mindset that the bank and our community partners hold. It’s about growing the business for the benefit of all stakeholders – the community company, the bank, the staff and the community at large.
"By feeding back into the prosperity of the community we grow their wealth and the banking business. In the early days the motivation for the Community Bank was returning banking services to towns that had seen all the existing banks leave.
"Today it is more about earning a revenue stream for communities to help them be sustainable and vibrant. Every community has banking business within it and this model enables them to share in the value that business creates. It’s a win, win, win!"
Hirst added that the success of the model is undoubted, adding that it is a testament to how business and community can work together to create value.
"In many locations it is the Community Bank that is the most locally-connected institution, leading and funding the community in areas of economic and social development on projects that the community has identified as important locally," he said.
"Often the funding provided through the Community Bank is leveraged with funds from the three tiers of government because the community is putting skin in the game through that bank funding. It is amazing to see what some communities have achieved.”
Commenting on the ranking, the Bendigo chief said that to be recognised among international enterprises committed to strengthening the connection between corporate and community success by addressing social and environmental needs was confirmation that the regional lender's business model is ahead of its time.
"The performance of the financial system is ultimately only as good as the benefits it delivers to its users - whether they be individuals, communities or businesses. We believe that to be truly successful, all stakeholders in our business - customers, staff, shareholders, partners and suppliers - must feel fairly rewarded for the effort they put in to helping our business be successful," said Hirst.
The Community Bank concept was developed as community angst grew when Australia’s major banks reduced their branch presence by about 30 percent in the 1990’s, leaving many regional towns without a local banking presence, according to Hirst.
Bendigo provides the banking infrastructure and licensing requirements, while the community runs the branch and generates valuable funds to invest into their community.