Ben Woods (BW) 0:03
This is Ben Woods, Archivist, Australian Mutuals Archives, interviewing John Tancevski, 30th July 2025. Ok John, can you tell us a little about your educational background?

John Tancevski (JT) 0:21
Certainly, I started as a BHP trainee, so an accounting diploma, and I followed up with a Bachelor of Commerce degree, major in accounting. I then did a Master’s in Business Administration, with a bit of a bent on E-commerce and strategy, and then followed up with study at the Australian Institute of Company Directors. And I’m a fellow of the Society of Certified Practicing Accountants. So for a guy who doesn’t like school, Ben, I’ve done a lot of it.

BW 0:46
Did you say E-business, E-commerce, right? Yeah. Okay, might get back to that a little bit later. What brought you to accounting to begin with?

JT 0:58
Yeah, I did an accounting diploma. I did a traineeship with the steel works locally in Wollongong, and did the four year accounting diploma, which put me onto a degree with another four years of torture, but managed to complete them both, which was always good.

BW 1:13
But is there any particular reason why accounting? Or did you have a flair for numbers or was it just a way of getting into business?

JT 1:21
To be honest, I kind of fell into it. I was good at maths and economics at school. They were probably my pet subjects, but the opportunity for a traineeship came up locally, and I didn’t know what I wanted to do at the age of 18. Big surprise, most boys get a little bit lost at that time. So I did it and thought, let’s start there and see what happened next, basically. The rest is history.

BW 1:42
Fair enough. I noticed you were born and grew up in the Wollongong and Illawarra region. That seems to be quite a strong area for credit unions and mutuals. Do you think there’s a culture there that might’ve had a different effect on you than if you grew up in the suburbs of Sydney say?

JT 2:16
I’m an immigrant Ben, so I came from Macedonia. Born in Macedonia, raised in Wollongong. That’s where dad got his first job. So that’s where we grew up, did the education, etc. But it really does lend towards the classic phenomenon of credit unions and mutual banks. Regionals, strong, parochialness, that tribal mentality. So the three types of credit unions, as you know, in this country, there’s the regionals, strong because they’ve got a very high penetration or a very high awareness. There’s the industrials, which are police, teachers, nurses, defense related. And then there’s the larger ones. You try and spread out so the regionality pieces are very strong. Tie into mutuals, gives them a great presence to three generations banking with the organisation. That’s where dad banks, that’s where I bank, has kind of worked quite well for the sector.

BW 3:09
So I guess the Illawarra has got that. It’s regional and it’s got that big industry.

JT 3:20
Yes, all that. I started work, remember at BHP steel, which is now Bluescope, but when I had my first job, I literally was a trainee, and my boss walked up to me and said, where are you banking son? I said, Well, I haven’t decided yet. Maybe I’ll work it out in the next couple of weeks. I might go up the road to bank. No, we’ve got a credit union, bank with them. He literally walked me down the road, knocked on this hole in the wall, which is a little screen. The shutter pulled up said, this is Johnny’s new trainee. He’s going to bank with us. They opened an account for me. Come back on Thursday when you get paid. I came back on Thursday, the hole in the wall opened up, and I was a member of AIS Employees Credit Union. So that history has always been quite strong.

BW 4:08
That was my next question. When did you hear about credit unions that was through the BHP, which was the AIS?

JT 4:16
Australian Iron and Steel Employees Credit Union, it was called originally, and ended up being City Coast Credit Union. I ended up joining them sometime, probably 15 years later, but it was a fascinating place, literally, there’s a hole in the wall. The little branch location on site at the steel works. And back in those days, we used to get paid in cash. So you got cash over the counter, and that was the local shopper.

BW 4:40
Did you have any extra involvement while you were still working at BHP? Did you have any involvement with the credit union, apart from being a member at that stage?

JT 4:52
Obviously, as you’re 18 years old, once you get to TAFE, I needed a car loan, so I went up to the local bank and asked for a car loan, the bank manager was graciously going to give me a $2,000 car loan at 18% on a bank card or some other devious device. And I thought that sounded a bit rich, and literally walked down to the credit union as a customer, and they sorted me out, got my first car and literally banked with them ever since.

BW 5:20
Very good. Was there a link between you being a member and your job later at City Coast?

JT 5:40
No link. Literally, I was just a customer when I first joined them in 1980 it must have been. And as I said, they took care of my first bank account. They took care of my first personal loan for a car, and when I got married, they took care of my first home loan. It was back in the era when interest rates were 18%. So we only went to 15 and a half, but that was enormous on a mortgage, and I still remember the credit union trying to do the right thing for customers, but it was certainly only a customer relationship back at the beginning.

BW 6:09
And so, your first role with credit unions was as Manager Corporate Services, as well as acting CEO at City Coast. Was that daunting? That seems to have been your highest position at the stage and was that daunting to come into a new field at such a high level?

JT 6:34
It was quite different. Look, I came from public companies, so BHP, listed as part of BHP group, I worked for McPhersons, which is a printing group. I worked for the private hospital sector. So a number of listed companies, Bridge Oil, in the oil technology sector, and a private venture capital firm out of Sydney. So I worked on a number of corporate entities, and was kind of used to that cut and thrust, but for family reasons, I had a job in Wollongong because we’re having our first child. So we thought that was a great opportunity to work in Wollongong. I’d been traveling to Sydney, Southern Tablelands, etc, so I’d been traveling and commuting for many years, and took the opportunity to take a role at home. So coming into the credit union was vastly different. There was much less pressure on corporate profitability. The focus was different. So there’s a fair bit of adjustment that had to go on, not from a daunting perspective, but from a different angle. You know, when you’re looking for the first dollar to save or the last dollar to make. It was all about trying to get the customer somewhere in the picture.

BW 7:43
Ok. Then, how would you describe your time at City Coast and what were your biggest achievements there?

JT 7:59
Yeah, it was a fascinating place, and I can only pay homage to the late Brian Mackey, the CEO at the time who brought me in. Brian’s a very collegiate, collaborative guy who was very much focused on we only existed for the benefit of customers, and that’s where his focal point was. So every time my commercial mindset would bring me into making an extra dollar, it was always balanced out with the perspective of the customers. So City Coast was a very unusual shop at that time. So we’re about $300 million in assets. Had a good regional presence, but we’re like all institutions making big margins that can put a lot of pressure on our day to day operations. So the question was, can you get bigger and better, or what’s the next step of our evolution? And one of the best achievements we had was this concept of traineeships. So we’d bring in about 10 kids, 18 years old, every year as part of the workforce. They’d do a transfer through the various departments of the credit union and learned banking. We had a philosophy. I couldn’t teach you to smile, but I could teach you to bank. So we actually gave these kids opportunities. They stayed with us for four years until they finished their diplomas or degrees, whatever they were studying, and then they went on to bigger and better things. But we did that for five or six years, and with the benefit of hindsight, that was one of the best education programs I think I’ve ever seen where great kids came through, we gave them great opportunities in return, and they gave us a mindset of can do. So it was one of the great learnings for them, and also one of the great learnings for us.

BW 9:41
So can you tell us a bit about the evolution of City Coast after that?

JT 10:01
So I left in 2002 when I finished as acting CEO, Brian had unfortunately fell tragically ill in the role. He was unable to continue, so I filled in as acting CEO for about six or seven months while the recruitment process went on. I then left City Coast to join Australian National Credit Union in Sydney, and unfortunately, 12 months later, Australian National Credit Union merged with City Coast and took it out. I had the unusual pleasure of helping to grow City Coast from its humble beginnings and then merging it into the Australian National group, which is a merger between Endeavor in Sydney, and Advantage in Victoria. So we took City Coast out the following year.

BW 10:46
Ah ok.

JT 10:52
Look, it was a great acquisition for Australian National. It was highly viable, very profitable for us. Unfortunately, I was a bit split, because helping to grow a great little Illawarra institution, and then seeing it merge out of the region was always a bitter sweet memory.

BW 11:11
How would you compare the roles and cultures at City Coast and Australian National?

JT 11:26
It was vastly different. At City Coast we did make we did a couple of small mergers, and I think I mentioned the Illawarra Area Health Services Credit union, Brambles Credit Union, Southern Copper Credit Union. So we got the taste for small mergers. But Australian National was a merger institution, so led by Rob Nichols, who has a great legacy in bringing consolidation to the Australian credit union sector. And that was part of their mantra to try and consolidate institutions up to larger entities. The difference in the model Ben is quite noticeable, because if you think about credit unions from the highest 40,000 feet perspective, they’re all niche institutions. Now, as I said, they either serve a regional niche in country towns or regional locations, an industrial niche like police, nurses, defense, teachers. But when they get too spread out or too thin, we can start to look a bit like banks. So the big challenge for Australian National was how was it going to find a point of difference when it had no regionality, no industrial specifics. So it had to find its own little niche, and we ended up merging with CUA out of Queensland, another three or four years later. So that’s when I joined Community First. But they were vastly different institutions. I said mergers were done for different reasons. In City Coast, the mergers were giving us a little bit more reach into employer groups, really consolidating that local presence, whereas in Australian National, mergers were trying to give us different regional perspectives and different markets, that were probably spread a bit too thin.

BW 13:04
Okay, that’s great. I wanted to mention your interest in e-commerce. We’ve been digitising our film collection of different mutuals, and apart from Cuscal, as you’d expect from peak bodies, we seem to have more City Coast films than anybody else. I don’t know for sure if that’s because that’s what we were able to collect, but I think it had to be something to do with City Coast having a particular fondness for film and TV promotion more than many other places. Did you have anything to do with that? And is that something you’re into?

JT 13:55
Very supportive of promotion. The gentleman who led most of that’s a guy by the name of Graham Sweeney. I literally had lunch with Graham a few weeks ago and he had a very tight budget. So the management team with Graham Sweeney, Joanne, Hinge, Anne Rouse and myself with Brian, were very much about trying to create a brand presence in the Illawarra. And Graham’s creative genius, on a very small budget, managed to create the loan ranger ads, a whole self deprecating view of the institution. We didn’t take ourselves as seriously as banks. We took our business really seriously, but Graham had a great, comical bent, so I’m trying to bring people an awareness to a small competitor in town, so consumers didn’t have to go to the big four banks. They actually could go to someone who was a bit different. And I said, City Coast in those days, operated a very tight budget, but Graham did some wonderful things and his team did some wonderful things in the marketing space.

BW 14:51
Very interesting. And the e-commerce studies is that because that’s the way of the world, or were you particularly interesetd in that as well? And what’d you get from it?

JT 15:02
Yeah, look, we were very big on trying new things, so I was leading a team internally at that time, trying to play with web pages which were quite new. The whole concept of web delivery was new. So we wanted to be early into the market. We managed to implement the Fiserv system, which is a centralised core banking system, the sector bought into many years ago. We actually bought the front ends of the Fiserv system as well, and did a joint venture with Connect Credit Union in Tasmania to bring front ends. So we had an integrated front end/back end solution onsite. I was trying to work out how we could integrate that to a customer offering so you actually could do web banking or get involved with some web applications in the early days. Now, you can remember at that time, whilst we take that for granted, that didn’t exist, so we were very much in the play space. Just didn’t have the resources to fully commit, but we did some interesting things in trying to get things much more automated, self help, more customer centric, and try to use e-commerce as an enabler to achieve some of those goals, right?

BW 16:04
Very interesting. Ok now, Community First, I guess when you look back, people will say they associate you with Community First, can you tell us a bit how you came to the role and how did it evolve from there? And I guess that includes it becoming Community First Bank too, but that was towards the end of your time. But, how did that come about? And how did that evolve?

JT 16:39
I’m grateful to say we had many adventures in the early days of Community First, when I joined, was about 300 odd million dollars in assets, and had a few challenges. We were into the personal loan broking space at the time, and unfortunately, that didn’t go well for us. We ended up with a fair few bad debts and a lot of learning and education that we took from that experience. We had a team that was quite segregated. We had a big cultural journey to go on, and we just had a major management transition where most of the previous management team had retired at the same time. So it was about starting afresh. And as I said, the world was changing. Consolidation was coming. Technology was changing rapidly. We’re all involved in technological core banking system evolutions, and we needed to make some decisions. So the early days were quite tough. I think we made a $50,000 profit in my first year, and had too many deferred costs on the balance sheet for me to remember fondly. Lots of challenges and lots of changes. So we embarked on a strategic planning process that said, here we are today, and what are we trying to be and where are we trying to go? And if we put the customer at the centre of that experience, we only exist for the benefit of customers. And I think that’s the part of the mutual segment that should be emboldened or tattooed on everybody’s arm. We only exist for the benefit of customers. And if you get that focus and lens right, you change perspectives. So in 2006 we wanted to go retail concept stores and see the evolution of retail financial services. So we actually opened a retail concept store in Macarthur, in the Campbelltown region, and we took out all barriers to communication, removed glass perspex screens and jump screens and counters and all that sort of stuff. And we put a concierge at the front of the store. He or she would meet you at the front of the store, walk you to the back at that time, you pass over your card as identification. He or she would swipe your card. The details would come up. I’d like $200 please. They’d hand you $200 from the telecash recycler. You’d sign a receipt, and then they’d say, Hey, Ben, we sent your home loan inquiry last week. Can I talk to you about that? You’d sit down at cafe style seating in an open atmosphere environment. We’d offer you a tea or coffee, so we’d have a quiet chat, and then we’d play your favorite song in a jukebox behind you. The whole concept of that was not only to create a different presence, make it a much more relaxed experience, because remember, the biggest financial transaction of your whole life is a mortgage, and we try to take the pressure out of that experience so we can hold your hand. You may be a doctor, lawyer, accountant, finance expert, but you are not a home loan person. You don’t know our products and features as good as our staff or as well as our staff, and you certainly don’t know all the ins and outs of how to pay your mortgage off faster, but you haven’t experienced it yet. So we would use our knowledge and the skills of staff to add value to that conversation by walking through options for the customer, then they’d follow up with a call centre contact or an execution with a mobile lender at home or come back and sign some documents, but we took away all barriers to communication, and we tried to create a retail concept store in 2006. People thought we were crazy.

But actually, if you roll forward 20 years, that’s what they all look like. Yeah, with or without the jukebox, there’s music playing inside now. Commonwealth Bank still has queues but we had a very different concept in 2006, I know we had lots of black suits from the bank standing outside our stores trying to take notes of why we’re doing it differently. And we did many things to flow on the evolution of mergers. We did a number of mergers to help transform the organisation. Give us some resources to do more things faster. We brought organisations in who wanted to change. Paul Johnson from Elcom Credit Union used to tell me the story of all these members coming down from the Central Coast to work in Sydney, and they bank in Sydney, so it’s really hard for him to pull those customers back away from the banks when they came home to the Central Coast. Our story was similar in Western Sydney. Competition was really strong. How do we get people to understand who we are? But together, we had more resources to create a bigger brand presence and different relationship that would give us different options. So we merged. That merger led to a relationship with the Mariners football team. I think they call it football, I won’t use the word soccer, but the Mariners were created, so we did a credit card promotion for the Mariners members. Now that credit card was really just a R and D exercise to give us experience in how credit cards would work, how those relationships with regional communities would evolve, what else we could do differently, and ironically, that experience turned into the McGrath Foundation. So the McGrath Foundation relationship we’ve had for about 20 years now, whereby we offer a low rate credit card to the market. Try to capture all the noise of the competition. Half the annual fee goes to the McGrath Foundation. So half the unit fee goes to us. It’s a source of non interest income for us, which is financially compelling. Members get a lower interest rate, a low rate interest card, which is compelling for them, and a wonderfully compelling social proposition. McGrath Foundation can create more breast care nurses and now more cancer care nurses. Their role and purpose has changed. So you see lots of different changes, and that evolution took a really big different point. It was trying to create non interest income for us. We wanted more brand presence, but you can’t create brand presence in a Sydney market. It’s just too expensive, just too competitive. So we tried different points. We brought in different product innovations, things like the matrimony account, whereby, instead of a wishing well or a gift box, we create an online account where people could donate wedding presents to the lucky bride and groom, and those concepts would gave them a different point of presence. So it’s all about different perspectives and trying to create a different niche. So we did six, or I think, seven mergers, with Illawarra Credit Union recently, it’s our seventh merger. We went from 300 million to 2.4 billion over that time. But the wonderful part of it Ben, is we had a massive cultural change. If you look back through the people who went through the journey, lots of people came along the journey with us. Many of them turned into really great managers, and many of them turned into great people. So wonderful opportunity to watch people grow and learn in the environment where you had a bit of a safety net, but we let you try things. So that’s part of the biggest learning in 2016 we were inducted into the Balanced Scorecard Hall of Fame for strategic planning. That’s an international recognition from Professor Robert Kaplan from Harvard University, and I got the benefit of sitting next to him at dinner in London to receive that on behalf of Community First Credit Union. Now that’s fascinating, considering the size of our organisation and the companies we were up against, I can assure you, we were the smallest institution in that room.

BW 23:40
Yeah, that’s pretty impressive. And it made me think when you were saying that and from what you said before that Community First’s origins are with Sydney Water Board, and you mentioned about it being difficult, unless you keep the niche with the industrial area or the regional area, that you can be spread too thinly. Community First has managed to avoid that? Is there any hint of the Sydney Water Board culture today, or is that of the past, and is the Illawarra the focus?

JT 24:25
So the Sydney Waterboard was really important, but my predecessors were incredibly astute. They knew that over time, the Water Board was shedding staff, getting smaller and it wasn’t going to be a big enough base for them to survive. So somewhere in the 70s, they started the point of difference to go from a industrial backed Sydney Water Board type employees credit union to a more community focus in Western Sydney, and opened up a store in Penrith, so that by the time I arrived, that relationship with Sydney Water was well and surely gone. It was a very small part of our business, if at all recognisable. But our point of difference was that we wanted to be in the greater Sydney market, serving the community base of Sydney. So the problem with the Sydney commuter market is I live in Wollongong, as I mentioned earlier, but the Sydney market represents people who live in Sydney and people work in Sydney, or live or play in Sydney.Now that involves Central Coast, Western Sydney, eastern suburbs, Illawarra, so that’s the commuter belt of Sydney. So our strategic point of difference was going to be, how do we serve people who live, work and play in the commuter belt of Sydney so they could see us? But that’s the most expensive and most competitive market in Australia. I can buy one ad in Sydney on TV, or 300 ads on regional TV, and you see that point of presence or niche that’s dominated by the Novocastrians up in the Newcastle market, Regional Australia Bank in western New South Wales, Queensland Country Bank in the regions of Queensland, but you can’t replicate that in Sydney or Melbourne. So our point was, how do we create or how do we leverage the tribal nature of the Sydney market, which is split up literally in parts of Western Sydney, Southern Sydney, Central Coast, Illawarra? So we did. The early mergers were designed to give us more presence and employer groups that we could leverage that then hooked itself up into Cape Credit Union to give us access to the Sutherland Shire, Elcom Credit Union to give us access to the Central Coast. And finally, Illawarra Credit Union to give us access to the Illawarra market. And that really gave us the points of presence south of Newcastle, west of Penrith and north from Wollongong, which was the commuter belt of Sydney. So we had about 13 physical stores, those retail concept stores I described earlier, we leveraged that with a significantly enhanced web presence for Community First Bank, as we changed our name for the bank, and that banking presence came from the trademark dispute we all would like to forget. But we also had a very unique offering in the early days called Easy Street Financial Services. Now, when I joined, they created a thing called Easy Street Financial Services as a close follower of ING when it launched in Australia. But Easy Street was predominantly a deposit business, access to deposits. So we turned it into a loan and deposit business, and realised as the NBN grew and people had capacity to bank through more internet enabled channels, we then leveraged that Australia wide presence through Easy Street, and now had customers in central Australia, Western Australia and northern Queensland. One of Easy Street’s hotspots was actually just south of Brisbane, between Brisbane and the Gold Coast and Tasmania, customers all around Australia, but they were very different markets. So Easy Street turned into our Digital Sandbox. We could do a lot of R and D differentially, price products. We set up new parameters in Easy Street that we didn’t want to do, and cannibalising Community First for the risk of losing some of those markets. But it gave us all these different distribution channels, and that developed the multi channel, but omni channel approach, so we had multiple channels or levers we could pull to get growth over time. And I’m pleased to say, Ben, the 20 years I was there, we grew 18 of them. Anytime we didn’t grow, we put a pause on for the global financial crisis for one year and the pandemic for one year, till we worked out what the heck was happening. But as soon as we were comfortable, the members were safe, the staff were safe, and the balance sheet was safe, we started the growth journey again. And similarly for profitability, we increased it for almost 15 or 16 years on our own till we had the trademark dispute and had to wear a very expensive trademark case for three or four years.

BW 28:43
Could you tell us a bit about that?

JT 28:50
If the cuts aren’t still too deep.

BW 28:52
That’s regarding the “Community First” name you mean?

JT 28:55
Yeah, so the history of that dispute leveraged back probably 20 years in the old Cuscal days Bendigo had a strategy of launching things called community banks. Community banks were a play on the name. I think they were less community banks, in my opinion, than they were franchises. Local communities would buy a franchise agreement, or use that word in inverted commas, where they buy a license to operate a Bendigo Bank branch called the local community bank of let’s say Wollongong, for arguments sake, you would pay a franchise fee for that. You would pay commissions on top of your savings. You’d pay commissions on top of your loans. You’d cover your costs and the community, if it were de banked, may have, may have this wonderful access to a bank it otherwise may not have. But the problem with the model was, like all franchises, when there’s heavy competition, franchises don’t necessarily do that well. If there’s no competition a franchise may or may not have a place, but it’s a very expensive model and well, a lot of the risk is transferred from the bank to the community to cover the costs, whereas the bank gets its fees. The problem with the name community bank is that’s what mutuals have been since they were founded. We have been the community bank of police, nurses, teachers, defense, Wollongong, Northern Beaches, Sutherland Shire, Illawarra, Shoalhaven regional, Queensland regional, New South Wales regional, everywhere. So we are where the community banks. So many credit unions, if not all, at times would say we’re doing a new presence or a presentation, and your local community bank offers a look like this. We want to be your local community bank, which is an American concept, community banks are all over America, sure. So there’s nothing new in the concept, but Bendigo managed to somehow register a trademark in the early 2000s for a Bendigo Bank branch. So with legislative change, and whilst credit unions have been wanting to call themselves banks, there’s always been a bit of regulatory pressure. The regulator, specifically APRA, didn’t want us to call ourselves banks. Somehow it would diminish the banking brand or reputation, which is just with the benefit of hindsight, nonsense. When the legislation finally changed, we all wanted to change our names, to just remove some of the differences in trying to understand what a credit union is. What is a credit union? Is it a union based organisation? Is it a small shop? Can you do mortgages? Many mutuals decided to take away that discussion and just call themselves banks, because we do banking community first. I must admit, I resisted a long time to call ourselves a bank because whilst we do banking, we are a bank, and we represent exactly the same prudential standards as most big four banks, albeit with some smaller differences the regulator applies. We still have to hold capital well in excess of the minimum. We must hold liquidity well in excess of the minimum. We must meet prudential operational risk and other guidelines well in excess of the minimum. So we look like a bank, we smell like a bank, we act like a bank. We must be a bank, but we actually don’t act like a bank. We do things differently. We have a customer at the middle of that experience. The customer is the only reason we exist. So if I call myself a bank, will I lose that point of difference, notwithstanding my own internal debate, we made the decision to move to a bank. So when we asked the regulator, or sent the request notice to the regulator that we intended to call ourselves Community First Bank and lodge the relevant trademarks, Community First Bank and Community First Mutual Bank and Easy Street Bank, we received, as many other mutual institutions had done, over many years, a nasty trademark letter saying that there is a trademark, you can’t call yourself a community bank. Our argument with that proposition has been, we were around before you launched a trademark. We’ve always been a community bank. Nothing has changed. Now I would love to say in a short and sweet story that common sense prevailed, but it did not. We were forced to go to a very lengthy and expensive court process over many years. That court process involved federal court proceedings. We had barristers and solicitors representing the history of the movement. They had experts pertaining to why banks were different to credit unions and why we didn’t have rights to call ourselves banks and our argument has always been very simple, Your Honor. We’ve been around since 1975 calling ourselves community first or something to that order. Sure we do banking, the regulations no longer prevent us from calling ourselves what we do. We haven’t taken that fight on earlier because I simply couldn’t afford it. We are now at a point where our progression, evolution and size warrants us to make a brand change, to call ourselves Community First Bank, and just remove any barriers to people joining us, because that’s what we do. We are a bank. We are not a union based organisation where some may be supported by affiliations. We are a broad community offering, and that’s what we do. And the judge, through the case, settled quite a lengthy court process for a trademark dispute, extremely expensive in the millions of dollars, came up with the conclusion that community first has been around. There are no differences in story, you can’t put a trademark on a word that’s generic, like community. The word bank is reserved, so therefore that also can’t be trademarked. If the regulator permits Community First to call itself a bank, which it legislatively must, at that point do,then we can call ourselves a community bank. Now, the detriment of that whole court case was that we were allowed to register the Community First trademark. Community First Bank trademark. Community First Mutual Bank trademark, and Bendigo was forced to remove their longstanding 20 year “Community Bank” trademark, with all the issues that go around with that, rebranding, re establishing stuff, etc, etc, and from that date all credit unions in the country could then call themselves community banks legally, without the threat of the trademark dispute or any nasty litigation and we ending up having to go to federal court of appeal and won that case unanimously as well. So as I said, it was three or four years in court, but probably 10 or 15 years in the making and Community First Bank took that on and to its credit wanted to fight, but that’s the nature of the institution. It exists for the benefit of members. Our members created this thing called Community First Bank. People sat around a table pooling savings so that other people could borrow money. It wasn’t up to someone else to decide that we weren’t community banks. That’s all we’ve ever been and I said Community First’s reputation, the concept stores, Lisa online, our online avatar, our product improvisations, I might use the word innovations, the way we put offset accounts on fixed rate loans, the way we shared the credit card with the McGrath Foundation. The financially and the socially compelling proposition that gave us a credit card book, which is now over 20 odd million dollars in receivables, said we have over $150 million in offset accounts that are sitting there that locked in members, less churn, gave us access to more financial services. Differentials, less refinancing, less churn, etc, etc, etc. It’s always given us a point of difference, and that’s what we’ve been pursuing from day one, our point of difference. But as I said, well, you shouldn’t misunderstand our intention or the good nature of the institution, with its willingness to fight. If the members, the reason we exist, the members, had a right to finish that court case. So it may have cost us millions of dollars and a couple of years of my life that I’d like back but it was important.

BW 37:06
Well, that’s right and it’s a great story. Just to finish up I might ask you a couple of general questions, if you don’t mind. So, what are the biggest changes you’ve seen over the years in your time in mutuals?

JT 37:32
I think the prudential pressure we’ve been under, prudential pressure we’ve seen over the last 20 years, has probably been the biggest catalyst for change. I won’t say that’s the outcome we were all seeking. We’re all seeking proportional regulation, which I think is very unreasonable, but it’s certainly been disproportionately applied to our sector, and has created changes that have been less than efficient, in my view, but I’ve joined this sector with a very wide eyed approach coming out of listed corporates, and very hard nosed financial, astute companies where weekly profitably was the norm, and it was perform or perish to a certain extent. So coming to a sector whereby what was the right thing to do by the customer, who is the owner of the institution, as opposed to how to make the biggest dollar, was a very big eye opener, and I was fascinated by what went on at my first group meetings. I remember meeting with the Illawarra Credit Union at the time down in Wollongong and a number of Sydney based institutions, and how they talked about collaboration and this concept of working together and that we weren’t the enemy, so we’re actually trying to compete for customers and members, dollars and cents and loans, but we actually should do it together to compete with much bigger entities, which are now known as the big four banks and the second tier banks. And I think that collaborative endeavor was fantastic. There’s certainly leverage, things like the creating service organisations you see in the US and Europe. You know it’s the Cuscal, it’s the COBA’s of this world, the expertise, the Data Action’s, those types of entities. And I think that collaborative endeavor created some really good initiatives and some wonderful innovative opportunities that the individual institutions probably couldn’t do by themselves. And I think that history really shocked me, how open and honest people were with some of those points. As I said, which we brought to Australia with Connect Credit Union out of Tasmania the front end of the Fiserv operating system. We Australianised it, we integrated it, and no way either of us were going to do that by ourselves. So that collaboration was fascinating to me and gave us a great compelling magnification of our own resources. But I think over time, we’ve probably lost a bit of that. And I think the consolidation piece where size and scale or efficiency has outweighed the strategic point of difference. What makes us unique, what makes us that regional institution or that industrial bond or whatever, point of difference we bring to the table. It’s always been about uniqueness. And I think the flavor we had on it then was a bit different. There might have been more institutions, but they were unique and focused on their employer group or whatever they were in a different way.

And I think the pursuit of scale is not the answer. There should always be strategy around how do we do it differently to one of the big four banks. Why would you bank with Community First Bank? I said in our case, well, we had a relationship in McGrath credit card. We had offset accounts on fixed rate loans. We brought to the table different relationships. You were in a relationship with someone. We were going to hold your hand through the biggest financial expense of your life. You’re never a commodity or a customer to us. I remember the story I embarked on with staff. I’m an accountant by profession. I’ve worked in financial services for over 25 years, and said I was a CEO of a small bank for 20 years. But I still remember the first auction my wife and I bought a house and her hand shook so much when she signed a deposit cheque, they couldn’t recognise the signature. We almost bounced a cheque. It’s not a commodity. You’re actually fulfilling life’s hopes and dreams, giving people access to shelter, giving people access to financial security through the purchase of the home, or helping them with saving for their daughter’s wedding or going on that holiday they’ve always wanted, or buying your first car and revving it up and putting your extractors on the engine, or whatever else you do to it. It’s always been an emotional attachment that we’ve always been in the business of. And it went back to the mission statement we created of helping members achieve their financial goals by building relationships for mutual benefit. We never lost sight of the fact that you could help members. That was our role. We couldn’t tell you to live in Rydalmere or Mt Druitt, or Revesby or in fact, Point Piper, wherever you wanted to live was up to you if you could afford it. We couldn’t tell you which car to drive. We couldn’t tell you whether it was an environmentally friendly car, although we did a discounted green loan through the government for many years, and that green loan created, brought us great personal loan business for decades, but we could help you achieve those goals. So our role was to be that enabler, that facilitator of that transaction. Our role was not to be the social cure of society or do something else. It was really about the customer’s needs and wants, and we were going to help you whatever. If that was a to be a petrol car, we were going to help you buy that. If it was a green Prius, we would help you buy that. We really didn’t care. We would just give you incentives to go one way or the other and trying to find a niche market. But that collaboration brought us great partners and friends through the years that we’re able to do things quickly and innovatively with, as I said, but whether that’d be with other mutual institutions or through those so called credit union service type organisations, and it gave us access to different models and leverage, and saw what the international US and UK and Canadian and European institutions were doing, and that collaboration was always front of mind. But I think as we get bigger, bigger is a conceptual piece, because none of us, if we all combined, would ever be as big as the big four banks were, in fact, the second tier banks. So it’s never been about size. In fact, size is almost irrelevant. If you have a point of difference, you have a right to exist. If you do not have a point of difference or unique offering you don’t have a right to exist. So it does bring us back to lots and lots of change, I think, the concept of regulation, where they’re forcing us into more template responses, and you look like this, and banking looks like this, and has to have this, and it has to have that does take away the reasons many of our institutions were formed. People sat around a table grouping their savings to give other people loans. You know, this is a people helping people business, and regardless of what they’re trying to achieve, we’re helping people achieve their goals. So the concept of size, I can’t remember sitting at an annual general meeting where our members stood up and said, Hey, John, congratulations on making an increased profit again last year. That’s great, you know, or getting the assets to grow by six or eight or 10% that’s great. No one ever says that. Can you offer me more competitive products? Are you giving me access to services that make a difference to my life? Are you contributing to taking one pressure point out of my financial plan? And it’s those sort of personal relationships where a member can ring up the CEO, that individual response, that compelling collaboration to make things happen, that I think made these institutions very unique and very different over a long period of time. And I genuinely hope that the next generation can continue their legacy. I shouldn’t really tell the story Ben, but probably in 2006 or 2007, I got up at the COBA Conference and said we should have 20% market share by the year 2020 and we called it the 2020 vision. And my point of that is, from what I could see coming outside of this sector, was you had these fantastic institutions spread right across the land who had very unique and different points of offerings, and they were represented throughout the country. If you could leverage the mass and the goodwill and somehow bring it into a very focused presentation, our 6% market share could go from 6%, why could it not end up at 20%. It was never about us getting smaller. It’s always been about getting bigger. But why would we would always need more resources to get to that 20% market share? So it is never about capital or never about financial leverage. It’s always about a vision, and to my own regret, we’re still at 6% market share when I finished up. And I think that’s been one of the great learnings. The case study, in my mind, is around if you had the opportunity, why did we not pursue it better? And I think that’s the strategy question around, did we get the focus right? Did we align our resources to that focal point? And could we have collaborated better? And I think the point that I’ve seen change over time is that dilution of collaboration. I think we should do that a lot better, a lot more, and learn from the past.

BW 46:13
Ok, just on that. I’ll let you go in a second. But just to finish up on on that. So what would it take, what would it take to get to that figure of 20% market share?

JT 46:33
The future is always a challenge. You know, none of us have a crystal ball, but I would, what I would like to see in the future is that 6% market share grow. And I think it will not grow by consolidation into one institution or two institutions or four or five dominant institutions. If you draw a blank piece of paper in this country and start it again, there’s always a need for a Regional Australia Bank servicing regional Australia, regional New South Wales. There’s always a need for a Queensland Country Bank servicing Queensland regionals. There’s always a need for a a Hume Bank or someone like that, servicing Albury. You know, there’s always a need for defense, police, the nurses, the teachers type institutions, but if you dilute them too much, you lose that core competency, that strength, or that point of difference, or that strategic intent, and I think that’s the part that could lock us into 6% market share or less in the future. Now that’s the downside. The upside, however, is if you could share non competitive issues like technology, regulation, get more proportional regulation and lobbying through Parliament so that people understand why we’re different. Because remember, in Canada I think, the government guarantee was applied to credit unions and the banks didn’t get it. In the in the US, they’re still not taxed because they’re seen as community banks servicing a community need, and taxation doesn’t improve their competitiveness. But in Australia, we will meet the same prudential standards as big four banks, and we will smell, act and look like them if the regulator was to win that debate. That’s never been the case. So if you could find a way to draw a map of Australia that identifies the key employer groups we want to be represented in the key geographic regions we want to cover, and how we can dominate that better through regionally based institutions, I think you have a very compelling story. And I know from my Australian National experience, as I said earlier, we were Avantage in Victoria and Endeavour in New South Wales, and they merged with CUA in Queensland which is now known as Great Southern Bank. But the problem when you get to that leverage, that distribution side, people forget there’s 1000 kilometres between Melbourne and Sydney and another 1000 kilometres between Sydney and Brisbane, there’s a massive geographical divide that doesn’t replicate itself easily as in the US, UK or even Europe. So you’ve got to be really careful you don’t dilute your point of difference or presence when you get bigger, because this makes it a lot more expensive and a lot harder to cover the same ground. So as I said, I still think there’s a wonderful opportunity for some strategy points of difference in innovation through improvisation with what we’ve already got. And if you can keep the number of institutions probably above the 30 mark and spread them out more willingly into the various markets we’re trying to operate. I think there’s a real chance for us to get to 10% market share. I’m losing sight of the 20% I originally hoped for, but I still remain hopeful we can go from 6% to 10%. I still think there’s a flicker of a light on the horizon that should allow us to get there, if we’re willing, but it will be tough.

BW 50:04
Right, that’s great. Thanks very much.