Customer-owned banks are doubling down on the broker channel to help drive a human-centric banking agenda amid widespread industry consolidation
Customer-owned banks are doubling down on the broker channel to help drive a human-centric banking agenda amid widespread industry consolidation
When representatives from some of Australia’s pre-eminent customer-owned banks descended on Cafe Sydney this February, much of the discussion centred on values.
Participants went to great lengths to spotlight the many ways these institutions are working with – and giving back to – the communities in which they operate.
Customer-owned banks are, by their very nature, beholden to their members’ interests instead of shareholder profits, so these topics are far from unusual whenever they gather in one room. But what was surprising was the increasingly important role brokers play in telling their story.
Over the past year, customer-owned banks have tightened their broker relationships amid ongoing consolidation in the mutual banking sector. They are increasingly recognising the critical role brokers play in home loan distribution, while investing in technologies to simplify and streamline the application process.
The 2025 financial year was one of solid growth for customer-owned banks. Deposits across the combined mutual sector grew by 8.7% to $144.3 billion, while lending rose 8.2% to $145.8 billion, per KPMG’s latest Mutual Industry Review.
But the challenges are also vast. Major banks are becoming increasingly aggressive with their lending strategies, while the breakneck growth in artificial intelligence is changing the game for turnaround times and customer retention.
To discuss these themes and more, MPA gathered leaders from seven of Australia’s largest customer-owned banks around the table, namely:
- Brendon Prior (pictured top, centre right), national manager broker distribution, Great Southern Bank
- Daniel Woods, state manager, P&N Bank
- Darren McLeod (pictured top, centre left), head of third party, Beyond Bank
- Mark Middleton (pictured top, far left), head of third party distribution, Teachers Mutual Bank Limited
- Matthew Wood (pictured top, third from left), national manager – partnerships, Bank Australia
- Michael Sancilio, group head of lending, People First Bank
- Zeb Drummond (pictured top, far right), chief operating officer, Gateway Bank
Two of Australia’s top brokers, Katrina Rowlands (pictured top, third from right) of Mortgage Success and Loan Market franchise owner Ruth Crampton (pictured top, second from left), also joined the discussion. They were more than happy to press the roundtable participants on how they’re doubling down on the broker channel in a highly competitive environment.
Here’s how it went down.
What are your members demanding from you, and how have their interests changed over the past 12 months?
Kicking things off, Great Southern Bank’s Brendon Prior made the point that while the fundamental values and trust-based relationships inherent in the customer-owned banking space haven’t changed, there have been some considerable changes in the approach to digital transformation and security.
“Online security has been huge for us,” said Prior. “We’ve really invested heavily in that space.” He noted that while Great Southern Bank’s approach has been to bring in younger members, these issues are particularly pertinent for older members who are less up to date with technological developments.
Members are increasingly demanding transparency around retained profits and how these are reflected in product pricing, Prior said. These members – and also new customers – deeply appreciate the fact that, as a customer-owned bank, all profits are reinvested back into the business for the benefit of customers.
Michael Sancilio (pictured, below left) added that at People First Bank, “we probably haven’t seen a real shift in their demands over the last six to 12 months. They’ve been very consistent, especially in their expectations of having a simple, secure digital experience.”
Sancilio explained that members are becoming increasingly proactive in wanting to engage with People First, and they expect a high level of consistency and transparency from their customer-owned banking partners. “That’s made it even more important for People First Bank to develop our overall service offering with these expectations in mind.”
Bank Australia’s Matthew Wood said, “As a 100% customer-owned bank, our clients know our values, and they hold us to them. We know our customers want to use their money as a force for good and make a collective positive impact.”
Climate action is a major priority for members, Wood noted. “We are a certified B Corp and aim to be Australia’s most trusted bank. We regularly survey our customers to understand what matters most to them. The results directly inform our impact priority areas as well as the development of our product and services.”
Darren McLeod continued, “Customers are way more educated these days, so they want better collaboration and conversations.” This makes it important for Beyond Bank to have the best and brightest frontline staff in place to help them manage budgets and cash flows. “It’s really about embracing all staff, especially in the call centres, so they can have a good conversation about what the customer needs,” he added.
Last year, Beyond Bank conducted over 55,000 banking reviews for customers. “As a business we are confident that demand will continue to grow,” said McLeod.
He also highlighted the importance of simplified processes. “First and foremost, we should be easy to deal with and quick to respond, whether it be an everyday query or for a loan approval. We’re looking to achieve this through digital convenience while continuing to value human touch when we’re needed,” he said.
“When regulation reflects the way mutuals operate, customer-owned banks are better positioned to offer choice, value and trust – ensuring customers and communities benefit from a more competitive and balanced banking system.” – Brendon Prior, Great Southern Bank
Mark Middleton reflected on the increasing importance of fraud protection. “Fraud protection has become a major priority for our members,” he said. In response, TMBL has strengthened its cybersecurity processes and invested resources into new measures to help detect and prevent scams and fraud.
In 2024, TMBL was the first customer-owned bank to implement a new security tool alerting members if the account details they provided appeared incorrect.
“We’ve all heard the horror stories from conveyancers about stolen details and redirected funds,” Middleton said. “Introducing these safeguards has been a critical enhancement for our clients.”
Values-based banking, with its expectations of ethical conduct and environmental responsibility, “is how we differentiate ourselves from the shareholder-owned banks,” added Middleton. “Our shareholders are our members, so everything we return goes back into the business to benefit them.”
Woods (pictured, below right) pointed out that “customers are more deliberate in their borrowing decisions, whether that’s because of cost of living or sensitivity to household cash flow. Rates are unfortunately back to being top priority for everybody, so we need to be mindful of that with our broker partners and our customers.”
It’s not just about digital capability these days, Woods added. “It’s about being fast and efficient across all of your channels, because digital is an expectation now. Whether it’s the mobile channel, the broker channel, in branches or through the contact centre, customers expect a fast, frictionless experience every time.”
Gateway Bank’s Zeb Drummond said, “I think our customers need us to be what they want. So when they want something digital, they need to be able to enact digital. If that’s their channel of comfort, then we need to provide that and make that available to them.”
But people want to be able to speak to a human at a contact centre. “They want to feel and know that they’re being heard as well,” he added.
Drummond believes it is this human touch that gives customer-owned banks a real point of difference to their competitors. “The majors cannot possibly hope to replicate that because their scale is different to ours.”
What are you doing to forge deeper ties with brokers? Additionally, what are the main benefits to your business of distributing through the third party channel?
McLeod stressed the importance to Beyond Bank of providing a consistent service to its broker network, including same-day responses from the BDM team to scenario and rate queries.
“We want to get the message across from credit, from the BDMs, from the contact centre, from the support team, so that consistency is our big thing, knowing what you’re getting with Beyond Bank,” said McLeod.
In turn, brokers have been a huge benefit to Beyond Bank, growing its presence across NSW, Victoria and Queensland. McLeod said, “New South Wales is number one for our business now, mainly with the brokers, while Victoria is second. That’s what brokers have done for us; they’ve expanded our network nationally.”
For TMBL, “brokers remain critical to expanding our reach,” Middleton said. “Brokers support access to the broader residential mortgage market, which aligns with our core lending focus.”
Brokers also provide access to the younger, digitally oriented cohort, “who increasingly rely on brokers for choice, transparency and trusted advice”.
TMBL has invested heavily in delivering quick turnaround times and responses for clients.
“Triage is critical for us,” Middleton said. “It ensures applications are complete before reaching an assessor, enabling a one-touch approval wherever possible. Over the past year, our triage process has significantly improved both efficiency and loan flows.”
“Our brokers aren’t shy in telling us what they think, and we appreciate that honesty as it means we can make impactful change.” – Daniel Woods, P&N Bank
Wood emphasised that Bank Australia values its partnerships with its accredited brokers. To continue delivering for brokers, the bank has redesigned its website, improved the accreditation process and updated its origination platform.
“The redesign simplifies the process and makes it easier for brokers to support their customers,” said Wood. “This uplift coincided with the rollout of our new CRM and broker accreditation survey, allowing us to improve that experience at the same time.”
He added, “Brokers play a crucial role in helping new customers discover Bank Australia, and we know many customers prefer to engage a broker when looking for a home loan or refinancing an existing one. The broker channel provides visibility and reach, allowing us to connect with more customers who share our values.”
At People First, Sancilio said brokers are “a fundamental part of the bank that we’ve been building”.
A recent merger saw Heritage Bank’s “very mature” broker book combine with People’s Choice’s growing broker book to create People First Bank. “We’ve really been able to take the best of both of those elements to develop a service proposition that better supports our broker partners,” Sancilio said. “We want to continue to grow our broker book as much as we can.”
Since the merger, People First Bank has been putting more focus on understanding brokers “a fair bit more on the engagement side, to really be able to share what our brand is”.
“We’re out there with the People First Bank to a degree,” continued Sancilio. “But we also have our legacy brands, which can confuse people. So we really need to try and be clear about who we are and what we want our People First Bank proposition to look like. To do that, we need to ask those questions and get the feedback directly from the brokers around what’s important for them, then act on that.”
“Sustainability is in our DNA. We look at it as an important part of our day‑to‑day business” – Darren McLeod, Beyond Bank
Prior pointed out that “seventy-six percent of mortgages are written by brokers, so you really have to play in that space”. He noted that the vast majority – over 70% – of Great Southern Bank’s flow comes through the broker channel.
Prior attributed Great Southern Bank’s growth in every state and territory in the country – even in places where it doesn’t have a branch presence – to the close ties the bank has forged with brokers.
Actually listening to brokers by bringing them into a room for a roundtable discussion has been invaluable, Prior said. “A lot of our change for the last three years has come from those roundtable sessions.”
He also mentioned that Great Southern Bank’s operations and credit staff have similar scorecard targets to those of its sales teams, ensuring that everyone works towards a unified goal.
For Drummond, the value proposition of working with brokers is simple: “An expanded distribution that we couldn’t hope to achieve via a proprietary channel.” He understands that a customer-owned bank has little chance of competing with the majors on proprietary distribution, which makes it all the more important to keep broker relationships in good health.
While disagreements between bank and broker on credit policy are natural, Drummond believes it’s “absolutely critical” that banks don’t change the goalposts midway through a negotiation.
“For the last 12 months, we haven’t had a single broker tell us that we’ve moved the goalposts,” he said. “I think that’s really going to help brokers get some confidence in their submissions.”
Daniel Woods added that “brokers play a vital role in our success at P&N Bank and BCU Bank. They’re a crucial part of our multi-channel approach. This integration means we can meet our customers wherever they want, providing the flexibility and convenience they need to choose how they engage with us.”
P&N Group remains laser focused on the basics, said Woods. “We’ve come on a long journey and had some amazing feedback … it’s about continuing to listen and getting the basics right.”
P&N Group has also made a concerted effort to improve the communication channels of its BDM and credit teams. “Going back a few years, our credit and assessment teams didn’t phone brokers; communication would mostly be via email,” Woods acknowledged. “We changed that process, and it’s going from strength to strength. We’re getting such wonderful feedback from our brokers around the team and the engagement they have with our people. Our people really make a difference.”
Broker question from Katrina Rowlands, Mortgage Success: Brokers frequently act as educators for customers. What tools, data and initiatives are you offering, or planning to offer, to help brokers advocate for customer-owned banks?
In tabling this question, Rowlands explained that while she enjoys working with customer-owned banks, they could do a better job of helping brokers explain their compelling proposition to clients.
Woods was first to take the stand, given the changes to the broker experience underway at P&N Group. He reiterated the importance of listening and taking on board the information provided to P&N Group. He also emphasised the virtue of getting on the road and attending PD days with the bank’s BDMs.
“From an education point of view, we run regular Boost Sessions across both brands,” Woods said. “Whilst we support aggregator groups with their education programs, we also do an in-house education program on a bi-monthly basis with guest speakers. Whether that’s someone to help with social media or building your own business, we feel like we’re really adding value to the brokers who work with us.”
Rowlands pressed further, asking how the likes of P&N Group onboard broker input on a day-to-day basis. Woods pointed out that BDMs play an important role in conveying brokers’ demands back to the bank’s leadership. “Our brokers aren’t shy in telling us what they think, and we appreciate that honesty as it means we can make impactful change,” he said.
Prior explained that Great Southern Bank’s Broker Portal is a key resource, bringing everything brokers need together in one place, including detailed product information, current offers, news, forms and support materials. It’s designed to make it easier for brokers to educate customers and highlight the benefits of choosing a customer-owned bank. The bank is also in the process of building a financial literacy program specifically tailored to brokers. “It goes very much back to the core values of customer-owned banking,” Prior said.
Great Southern Bank also runs quarterly executive roadshows, which have been useful for understanding brokers’ core needs. These roadshows have ensured the bank’s senior leadership team are familiar with the particular needs of brokers.
“Getting all our executive team out, they’re now going, ‘we need to invest heavier’, whether it be in education of the BDMs, education of brokers, or that one-team approach within the organisation. It’s been so powerful for us,” said Prior.
“Every deal has variables. But to get through the variables, there has to be a genuine understanding of the client’s situation.” – Katrina Rowlands, Mortgage Success
Coming back to Rowlands, she stressed the importance of having an open dialogue with the credit managers, including during the post-settlement phase. She gave a shoutout to TMBL, who, in her words, “know your product very well and know your clients”.
Middleton chalked this up to listening to brokers and using their feedback when designing new products. “Some of the changes to our features and products, that’s come from brokers, from what they need,” he said. That not only leads to more business “but most importantly to higher customer satisfaction, by listening not only to the customers but listening to our brokers”.
Loan Market’s Ruth Crampton made an interesting point. Just as customers want to deal with a single broker as their trusted adviser, so too do brokers prefer dealing with a single point of contact. “We want to be dealing with one credit assessor, one credit manager,” she said.
Sancilio added, “Everyone internally knows the importance of brokers.”
People First Bank recently brought together a large group of brokers from across different aggregators and states to hear their demands and expectations. Having a diversity of input was critical, he said, “because everyone brings a different perspective … We obviously can’t suit everybody, but once we actually categorise what people want to see, we can then build that back into what our processes are”.
Sancilio noted that People First Bank has some “outdated systems that are now being updated”, which presents a true opportunity for the bank. “We’re building a new, modern system with input from brokers, to deliver an enhanced experience for them. There’s a lot of change coming over the next six months, which is really exciting for us.”
McLeod said that while there has been progress over the past few years, he agreed that customer-owned banks could do more to help brokers advocate for them. In particular, he would like to see more training of BDMs to help them explain the true values of customer-owned banking to customers. “We do a bit, but of course we could always do better,” McLeod said.
In Drummond’s view, “If we ignore brokers, then we’re ignoring probably the largest contributor to our business, and it’s only going to grow as well. So wherever we can educate brokers as to what we are and how we do things, it makes for a much smoother, much better outcome for our customers that we share.”
Drummond also stressed the importance of keeping brokers aware of what’s happening with the loans on their books, including potential clawback risks. These good-faith actions are important, since brokers are key to getting the message out to customers about the benefits of working with mutual lenders.
Other roundtable participants highlighted their own broker-retention policies, which Rowlands said are becoming increasingly important.
What would you like to see at the forefront of customer-owned banking advocacy initiatives this year?
Woods would like to see more research into using technology and AI to make banking simpler in a safe way. “Our sector will continue to be advocates for a more level playing field in terms of lending regulation and compliance too, because customer-owned banks can be disproportionately impacted,” he said.
Drummond wants more emphasis put on the overall value of mutuality and what it means to the end consumer and the broker. “That’s the thing that we need to be advocating for,” he said.
McLeod noted that the Customer Owned Banking Association does a lot to put together programs and frameworks to help educate and support its members around issues pertaining to scams and fraud. Beyond Bank has already run approximately 50 sessions for members and community groups, covering topics such as financial abuse, scam awareness and financial wellbeing.
COBA advocates for customer-owned banks to help “even the playing field” with government and regulators, said McLeod, though he would like to see the association do more in the broker space, given the massive part brokers play in advancing the sector. Others around the table agreed.
Moving the discussion on, Sancilio said, “We face capital and regulatory settings that are just not aligned to the risk profile of the customer-owned sector, especially compared to the majors. There are a number of reforms that we’re really passionate about to drive some change in that space – mainly around the capital requirements, aligning that with the actual risk of how we operate as a bank.”
Sancilio would like to see a proportional approach to regulation, “because that’s a huge cost to us from the compliance side. We have to put lots of resources into compliance functions and regulatory teams to meet requirements that are actually aimed at the major banks and the way they operate.
“You don’t necessarily see that from outside of the bank, but those disproportionate costs do have an impact on how competitive we can be.”
From a Bank Australia perspective, Wood said “we’ll continue to focus our advocacy on the social and environmental impact issues that our customers tell us are most important to them”. He added, “We continue to work closely with our industry association to advocate on issues like scams, payments reform, and for proportionate regulation for the customer-owned sector that recognises the different profile of the sector.”
Wood mentioned four impact areas that members expect customer-owned banks to take action on: climate action; nature and biodiversity; First Nations recognition and respect, and affordable and accessible housing.
Middleton expressed a desire for stronger promotion of sustainable practices within the customer-owned sector. “There should be greater visibility of the sustainability commitment of customer-owned banks, including the B Corp status many hold,” he said.
Middleton pointed to TMBL’s move to a six-star Green Star-rated building as an example of operational leadership. “Customers are increasingly focused on sustainability, and we need to highlight how the sector is responding to that,” he said.
Prior added, “When regulation reflects the way mutuals operate, customer-owned banks are better positioned to offer choice, value and trust – ensuring customers and communities benefit from a more competitive and balanced banking system.”
Customers value sustainability and environmental awareness in their banking partners. How are you addressing these values?
“Sustainability is in our DNA,” said McLeod. “We look at it as an important part of our day-to-day business. So that’s really important.”
McLeod drew attention to the 2024 Customer Owned Banking Impact Report, which showed that customer-owned banks gave back to their communities at nearly nine times the rate of major banks.
It showed that, on average, credit unions and mutual banks reinvested 5.2% of their profits into community and charitable organisations, while major banks contributed 0.6% of their profits. Beyond Bank went one step further and reinvested 6.3% of its profits in 2025.
“This year Beyond Bank is proud to celebrate our 10th year as a Certified B Corp with a B Impact Score of 147,” said McLeod. “This is an increase of 42 points since our initial scoring in 2015 and demonstrates our commitment to increasing our overall positive impact on society and the environment.”
Over to Gateway, “Our purpose is pocket and planet,” said Drummond. “We want to enable Australians to make cost-conscious decisions that don’t adversely impact them but certainly help the planet at the same time.”
To put this into practice, Gateway has an ethical investment policy, an ethical lending policy, plus its Visa Eco debit card, “which produces 68% less greenhouse gases and emissions in its creation”.
“Climate change is our customers’ number one concern, and it’s a concern we share.” – Matthew Wood, Bank Australia
Drummond mentioned Gateway’s numerous green products, such as the Green Plus Home Loan, which relies on a NatHERS (Nationwide House Energy Rating Scheme) rating. “For us it’s about building out this suite of products and services that support people in doing something environmentally conscious but not paying an additional green tax or it costing more,” said Drummond.
Woods added that P&N Bank is “making genuine progress against our climate action commitments. All the little things count, like solar panels on four of our freehold properties and rolling out a hybrid fleet and our first EV. We believe we have a part to play in addressing the social issues impacting our customers.”
It’s important to consider what customer-owned banks are doing in the environment space, Prior said. “As a bank, [Great Southern is] working towards being net zero by 2040. Currently, around 16 of our 26 branches and all three office hubs are now powered by renewable energy or GreenPower, and we are progressing towards our 100% renewable energy target by 2030.
“On the community side, the bank’s multi-year partnership with Mission Australia is helping tenants in community and social housing to reduce their expenses and embrace more sustainable living.”
Prior agreed that the customer-owned banks gathered around the table “sometimes don’t collectively tell our story well enough”.
People First’s Sancilio said, “As a customer-owned bank, doing good is the foundation of everything that we do. Whether that’s through our customers, through the communities, employees or the environment, it’s all really important.”
Sancilio mentioned People First Bank’s carbon neutral certification, the People First Bank Foundation and the community lottery “that’s given millions of dollars to these grassroots community groups”. The bank also has its ‘Good Squad’, an employee volunteering program that contributes thousands of hours to community projects.
“Climate change is our customers’ number one concern, and it’s a concern we share,” said Wood. He noted that in a recent Bank Australia customer values survey, 86% of customers said they wanted the bank to take action on the matter.
Bank Australia became the first Australian bank to care for a conservation reserve, spanning over 2,000 hectares on Wotjobaluk Country (western Victoria). “Protecting this land is part of how we’ve been taking action on nature and biodiversity on behalf of our customers since 2008,” said Wood.
He continued, “Our climate action strategy includes our commitments to climate justice, climate‑related risk management and the protection of nature and biodiversity. Our products are designed to support customers to decarbonise their homes and vehicles, including our Clean Energy Home Loan, our home electrification support to help customers get off gas, and our EV loan for new electric vehicles.”
“As a customer-owned bank, doing good is the foundation of everything that we do. Whether that’s through our customers, through the communities, employees or the environment, it’s all really important.” – Michael Sancilio, People First Bank
Middleton referred to TMBL’s vision: ‘Banking for good’. TMBL makes good on this promise through myriad community initiatives such as Stewart House. TMBL also supports other essential workers, such as health workers, via bursaries, uniform endowments and scholarships.
“The bank maintains a strong track record of social responsibility and community investment,” said Middleton. Of course, TMBL must reinvest in its own products, services and people, but “a substantial portion of our efforts is going back to the community itself rather than to shareholders”.
TMBL’s B Corp accreditation “is particularly appealing to younger value-driven borrowers and brokers”, Middleton added.
Broker question from Ruth Crampton: I have been a keen supporter of customer-owned banks as they bring a level of accountability to the marketplace. But we are operating in a competitive environment of 24-hour turnaround times and major banks pushing proprietary loans, helped by automation and simplification of some policies and procedures. Do you perceive this as a threat and, if so, what are you doing to ensure that we can continue to support the customer-owned banking sector and provide a streamlined service for our customers?
“Obviously the big guys are potentially going to be ahead of you in technology,” Crampton acknowledged as she put her question to the roundtable. But as someone who wants to work with customer-owned banks, she was keen to know how they plan to compete with the big leagues.
“You’ve got to look at what the market’s doing, and you’ve got to be competing with the market,” said Wood. “So we have to invest, and that’s part of why there are so many mergers going on – to enable us to have the investment power to do that.”
“Two and three days [turnaround times] is acceptable as long as you do that day in, day out, week in, week out,” he added. “And I think that’s where we want to get to – not promise the world and not deliver it. Be realistic and be consistent and make sure we deliver that every time.”
Sancilio agreed on the consistency piece. “You’re not going to get a three-hour approval with us at the moment [indeed, Crampton interjected, saying that no one in the broking community expects as much]. But it’s the communication and the consistency that comes with it that’s important.”
However, keeping track of what the major banks are doing “actually heightens the awareness across the bank around what we need to do to compete”, Sancilio added, pointing out that it helps guide investment into the technologies needed to be able to drive the experience customers expect.
True, every bank on the market wants to be able to compete on turnaround times, and Great Southern Bank is making decisions in a competitive 4.3 days. But as Prior touched on, setting expectations is just as important. A bank should “be honest and transparent and carry that through”, he said.
Prior said hearing from your BDM should be expected, not something that deserves commendation. “Every time you ring, we’ll answer the phone. Every time you ask for something, we’ll deliver back on that. Again, it comes back to the people piece for me. There are some people that want just the transaction. But a home loan is not a transaction.”
“You’ve got to be really smart and really plan where you’re going to spend your money,” stressed McLeod. “Over the past 18 months, Beyond Bank has invested in enhancing its loan origination platform and automated its commission and accreditation systems.” He said the bank is also constantly updating its banking app to deliver a smooth experience.
“Our advantage is that we know what we have to do, and we don’t waste a lot of money,” said McLeod. “We’ve got to be very targeted and very smart to deliver those technologies … I think that’s our advantage because we are all in the same boat here. When you build a new system or do something, you’ve got to be on the money. You can’t waste much.”
Woods agreed with his peers’ comments, but he emphasised the importance of consistently revisiting what a customer-owned bank’s value proposition truly is. “If we don’t keep revisiting this, whether it’s through policies, processes or the overall customer experience, then it’s a wasted opportunity,” he said.
It’s not about trying to match the big four when it comes to investment “but about being agile, innovative and consistent”, Woods continued. As previously mentioned, brokers don’t expect a two-hour turnaround time from a customer-owned bank (although P&N Group’s fast-track process for P&N Bank and BCU Bank can sometimes make it happen, Woods noted), “but we need to have an alternative to what some of the bigger banks are doing by offering a strong focus on trust and service, as this is our differentiator”.
Drummond added, “We should celebrate what we are. We aren’t the majors, but that’s a good thing. What that gives us is the ability to move quickly and be nimble in comparison to major banks. When it comes time to listen or make a change – policy, process, broker feedback – there aren’t that many layers to get to me through my BDM team to understand what’s going on. We respond really, really quickly.”
That’s simply how mutuals compete with the majors, “not on their grounds but by celebrating the things that make us good and special and different”, Drummond said.
Customer-owned banks tend to underestimate themselves, continued Middleton, noting the various times their competitors have replicated what the sector has done. “We might not have that capability of always being the market leader, but we’re not far behind.” Larger banks “can invest significantly more”, he added. “But we can adapt quickly, learn and implement with purpose.”
What’s the driving rationale behind mutual banking consolidations, and what are the long-term benefits of COB consolidation?
No customer-owned banks roundtable is complete without a discussion of mergers and acquisitions.
The industry is undergoing an intense wave of consolidation that’s reshaping it in real time. There were no less than seven mergers in 2025, up from four in 2024, including the high-profile combination of Bank Australia and Qudos Bank. This year has seen the marriage between Beyond Bank and Family First Bank get the nod from members, with more mergers going to member vote soon.
Some 32% of respondents to KPMG’s Mutuals Industry Review 2025 survey cited ‘acquisitions and mergers’ as their top priority for the following three years. Only ‘digital transformation’ (39%) and ‘maintaining profitable and sustainable growth’ (86%) emerged as higher priorities. Concurrently, 79% of respondents said they felt confident about their three-year growth prospects, compared to just 60% in 2024.
“We should celebrate what we are. We aren’t the majors, but that’s a good thing. What that gives us is the ability to move quickly and be nimble in comparison to major banks.” – Zeb Drummond, Gateway Bank
Roundtable participants were broadly aligned in their thoughts on the driving forces behind industry consolidation.
Middleton put it plainly: “Scale. When I first joined, there were over 100 mutuals. We’re now down in the 50s range, and historically there have been up to 700. There is increasing regulation, technology advancement, and achieving scale is becoming increasingly difficult for smaller institutions.
“But by merging we can achieve greater economies of scale – while still maintaining our values and community focus.”
“We operate in an increasingly competitive market,” Woods noted. As a smaller institution competing against the major banks, Bank Australia is seeing increasing pressures from growing regulatory requirements and costs, the need for greater investment in technology and the cost of funding continued improvements in customer experience. “Merging means customer-owned banks can meet these challenges and can be in a strong position for the future. Mergers mean that the ethos of customer ownership can be enhanced well into the future.”
He added, “Investment in talented and capable employees, combined with the necessary investments in technology, customer experience expectations, cybersecurity, fraud and financial crime prevention and compliance will only continue to increase year-on-year.”
Beyond Bank, meanwhile, has 15 successful mergers under its belt. McLeod discussed the shared values and expectations of members of merging entities, plus the natural benefits of technological alignment, an expanded service footprint and enhanced member value.
“While the number of mutual banks is decreasing, the strength of the sector is increasing,” McLeod said. “Mergers are less about ‘survival’ and more about building institutions that can genuinely compete with major banks while staying true to the customer‑owned model.”
Sancilio explained that there are two main drivers behind the ongoing consolidation in the mutual sector. One is the rapid shift to digital. The second is increasing regulation and compliance needs.
“Mutuals need to invest more and more in contemporary digital services to match customer expectations and the offerings of the big banks,” said Sancilio. “That level of investment is difficult if you remain a smaller institution. Similarly, the costs of regulatory requirements have also increased, made tougher for mutuals because, as mentioned earlier, we have to comply with measures that are aimed at addressing the shortcomings of the big banks.
“The benefit of consolidation is that we are now ending up with larger mutuals that have the scale needed to be sustainable and competitive and to deliver a better experience both for broker partners and for customers.”
The roundtable discussion ended with a recap of why brokers like working with customer-owned banks.
“You’ve got more one-on-one contact,” said Crampton. She gave a specific nod to Beyond Bank’s razor-sharp communication. The industry simply eclipses the big four in terms of delivering the human touch, she explained.
“I like the authenticity it offers for our clients,” said Rowlands. “I love that I can pick up the phone in most cases and talk to the person that’s making the decision. Every deal has variables. But to get through the variables, there has to be a genuine understanding of the client’s situation. You don’t get that from the big four any more.”
Rowlands just wishes it was easier to better represent to borrowers the values of customer-owned banks. The roundtable participants surely took notes.
