It has been around for a while – the Illawarra Mutual Building (IMB) Society was established 135 years ago – and from 1 August 2015 it has become a bank. The IMB Board made the decision to change to a mutual bank to support long-term growth strategies; research had revealed that younger people were unclear about what a building society offered and therefore did not consider IMB when they needed financial products.
We caught up with IMB Bank CEO, Robert Ryan, for some insights into the change.
Q: What are the benefits for IMB and customers in becoming a mutual bank?
A: As part of IMB?s ongoing review of the opportunities available to best position us in a competitive market place and to support longer-term growth, the Board decided the change to a Mutual Bank would be beneficial.
While Banks and Building Societies operate under the same legislative standards, our extensive research showed that non-IMB members, particularly younger people, were unclear as to what a ?building society? is and does, which reduced their consideration of IMB when choosing banking providers. Our research also confirmed that many current members already consider IMB as their ?bank? and that a change to a mutual bank would be a natural evolution.
There will be no change in our structure (i.e. we still remain a member based financial institution) and no reduction in products or services, but we believe that by becoming IMB Bank we will attract a new generation looking for a financial services partner.
Q: IMB have some terrific award-winning lending and deposit products. Will the transition to a bank change any of the products that you offer?
A: No, IMB has always had very competitive products and services and the transition will not change that. We remain committed to delivering member focused products and services at the great rates that our members have to expect from us, maintaining our position as a genuine alternative to the major banks.
Q: What was the process that you went through in deciding to become a customer-owned bank.
A: IMB conducted extensive research before making the change to a mutual bank. This research was undertaken with our existing members, as well as non-IMB members.
This research overwhelmingly supported a move to a mutual bank so long as we maintained those things that our members believe set us apart from the big banks, including our low fee structures, highly competitive loans and term deposit rates and the level of customer care that our staff provide to members.
With this we then applied to the relevant regulatory bodies who approved our application to trade as a mutual bank from August 1.
Q: You are the 13th mutual bank in Australia. Did you seek feedback from any of the other banks as to their transition experience?
A: Yes, there are a number of mutual banks across the country now. We certainly monitored their transition from either a building society or credit union to a mutual bank and spoke to a couple of these institutions to understand any concerns their customers had raised, but in the main, this was a change that IMB members supported and we developed our transition strategy internally.
Q: Finally, your Community Foundation is terrific. Can you tell me little bit more about it.
A: IMB Community Foundation was established in 1999 and since then, we have granted $7.6m to more than 500 community projects in the areas in which we operate. All of the projects must be of benefit to the local community and they must have a plan for sustainability. Many of the projects IMB Community Foundation has supported have been either new or in the first few years of their existence and without us, they would not have been able to get off the ground. The projects we support are very varied – from Cows Create Careers (a project where calves go into schools so students can learn about farming) to money for Liverpool Rotary Club for a bus for brain injury patients to get to and from Liverpool Hospital to ongoing support for a number of initiatives in various areas that teach young people how to drive with safety.