What is a customer-owned bank?
Customer-owned banks or mutual banks, provide consumer banking services such as credit cards, home loans, personal loans, savings accounts, and term deposits like any other bank. The key difference is in the ownership structure. The bank is owned by its members rather than shareholders.
Certain issues or changes may require a member vote according to the constitution of the customer-owned bank. Profits are reinvested back into the products and services rather than being distributed through shareholder dividends.
The customer-owned banking sector collectively serves more than 4.5 million Australians and brings with it the strength of $139 billion in assets.
What is the customer-owned banking difference?
Customer-owned banks serve a smaller customer base than the Big 4 banks. This means that you have access to personalised service from the staff and an overall enjoyable customer experience. Customer-owned banks are in a mutually supportive relationship with their customers and have a commitment to supporting the local community.
The key difference is that profits are reinvested back into the banking products and services offered to members. This relates back to the ownership structure which is important, as products and services are enhanced rather than profits getting distributed to shareholders as dividends.
When researching loan or deposit rates, you’ll find that rates on all financial products with customer-owned banks are competitive. The customer-owned sector provides competitive banking solutions with outstanding customer service, a can-do attitude that is committed to local communities, low and fair fees and competitive mortgage rates.
What kinds of services are offered at customer-owned banks?
Customer-owned banks generally offer the same products and services as traditional banks. These include home loans, personal loans, credit cards, business banking, term deposit and savings accounts. Easy access options such as online banking, visa cards, app banking and contactless mobile payments are also available.
Add on services like insurance and CTP Green Slip are available for members at Horizon Bank.
Simple investment options such as self-managed super fund accounts and term deposits are available subject to eligibility.
How do customer-owned banks help the community?
The customer-owned sector invests in community projects, organisations and events.
More than 60% of customer-owned banking institutions believe community involvement is a key differentiator to their business.
At Horizon Bank, we have sponsored many community events, some for a number of consecutive years in a row. Examples include:
15 years for the Thirroul Seaside & Arts Festival
9 years for the Merimbula Classic
8 years for the Bega Show
We have philanthropic affiliations with many charitable organisations that we support throughout the year. During winter many of our branches collect food, clothes and warm blankets for their local Homeless hub or refuge. At Christmas time, all of our branches engage with their local communities to collect non-perishable food, toys and gift vouchers for various churches and charitable organisations. The organisations we have supported include:
Albion Park Youth & Community Care Inc.
Bega Women’s Resource Centre
Narooma St Vincent De Paul
Supported Accommodation & Homelessness Services Shoalhaven Illawarra (SAHSSI)
Thirroul Need a Feed
Wollongong Homeless Hub
Tips for choosing a customer-owned banking institution
When choosing a customer-owned bank, here are some tips on what to look for:
Fair and ethical banking – customer-owned banks care about where they invest. For example, at Horizon Bank, we act as responsible and influential environmental citizen, as such, we do not directly invest in, or provide loans to, any company in the fossil fuel industry.
Customer-focused – the customers own the bank, so they’re put first. Customer centricity is at the core of all business operations. Opening an account should be easily done online, over the phone or in person.
Responsible lending – customer-owned banks make sure that the customers they lend to, can afford repayments without being adversely impacted.
Community support – customer-owned banks have a strong track record of supporting the communities their customers live in, whether that be through sponsorship or in-kind support.
Accessibility through branches - branches and people are key to the customer-owned difference. At Horizon Bank, we continue to maintain all of our branches. We place faith in our members and that segment of the community who value local, personal banking. We understand that people may prefer a brick-and-mortar bank if they like being able to walk into a building and speak to a person or lender face-to-face and o talk to people they trust.
Talk to a local - Horizon believes in providing easy phone access for members to contact their local branch, without the need for an overseas call centre. Get in touch with the friendly local team at Horizon Bank today. We're here to help you with your banking needs.
The content in this article has been prepared by Horizon Bank for general information only and it is not intended to be professional advice. It does not take into account your objectives, financial situation or needs. You should seek your own legal, accounting, financial or other professional advice where appropriate, and consider the relevant Product Disclosure Statement and Terms and Conditions before deciding whether to acquire any products or services offered by Horizon Bank and/or its affiliated partners. We do not recommend any third party products or services referred to in this article unless otherwise stated and we are not liable in relation to them. Any links to third party websites are for your information and we do not endorse any content on those sites. Horizon Credit Union Ltd ABN 66 087 650 173 AFSL and Australian Credit Licence Number 240573 trading as Horizon Bank.