Why member owned strategy can be digital, done differently

08 December 2021

David Marshall, CEO, Defence Bank

It may sound contrarian but co-operatives and mutuals should exercise caution when five-year plans are pitched to transform your digital business.

The cost can be eye-watering and the perceived benefits are sometimes unclear.

This is not to say that member owned enterprise can’t be the best in class and fleet of foot.

Let’s look at it as digital done differently.

Defence Bank has gone down a different road to avoid the dead end that often results from being hypnotised by tech talk and shiny toys.

We’re not great believers in multi-year digital transformations. Some people will suggest it’s the wrong strategy. But it’s our view you’ve got to play a game you can win.

Shunning multi-year IT programs may seem counter intuitive, but it’s a strategy that’s working.

We’ve actually moved to something that might look really obvious, perhaps it’s a solution hiding in plain sight.

Our digital strategy has at its core reducing what we call the “Member effort”.

It’s all about getting the basics right so busy people with busy lives often on the go can do everyday banking with convenience and simplicity.

We wanted to harness an attitude or mindset in our teams which was all about reducing the effort required from our Members.

Things like making sure Members didn’t have to tell their story to five people. Making sure our Members didn’t have to sign an inordinate amount of documents. And making sure we try and do most if not all of our engagement with Members in a paperless fashion.

All of those things are often inappropriately overshadowed by a lot of tech talk.

It strikes me that organisations that can do the basics brilliantly are actually at a real strategic advantage.

While we should be cautious about bells and whistles digital plans, we should be equally sceptical when it’s suggested we give up our points of difference to our competitors.

For Defence Bank its key purpose is to serve those who protect us.

Trading that away would mean we’d lose our point of difference and risk just being like everyone else.

Member owned or not, that’s a position no modern and thriving business wants to be in.

We’ve had really encouraging results from our strategy.

Members have responded positively, rating the Defence Bank app a 4.8 out of 5 in both the Apple and Google stores, well ahead of competitors.

Defence Bank also recorded an average Net Promoter Score of +40 and a Member Effort Score of 82% during the year, well ahead of the big four.

These metrics are really important as they show our Members would recommend Defence Bank to the family, friends and colleagues. Word of mouth remains a powerful tool.

Our continued focus is very much on continuous improvement.

So getting better every day, doing the little one percenters right, and getting everyone in the organisation lined up to identify and change those small things.

We think that’s much more effective and sustainable path for member owned businesses to taken than these large five-year technology driven programs. which is somewhat controversial and contrarian.