Heritage Bank sharpens its focus on customer experience

A sharpened focus on streamlining the customer experience will help Heritage Bank maintain its strong results and reputation, Chairman Mr Kerry Betros told today’s Annual General Meeting in Toowoomba.

Mr Betros said Heritage would also gain increasing benefits from investments made in leveraging its pre-paid cards and technology expertise, which recently resulted in an exciting business partnership with Qantas.

It would also look to significantly simplify its personal loans approval process as a key means of originating new business.

Today’s AGM heard that Heritage had posted its 14th consecutive record pre-tax profit in 2012/13 at $52.96 million – an increase of 19.4% on the previous year.

Heritage also grew its total consolidated assets to $8.507 billion, an increase of 3.5%, confirming its standing as Australia’s largest customer-owned bank. Total loan approvals in 2012/13 were $1.339 billion, a decrease of 6.7% on the previous year. Retail deposits grew by $336 million to $4.369 billion.

Heritage achieved a capital adequacy ratio of 12.81% and a liquidity ratio of 20.31% as at 30 June 2013, well above regulatory requirements.

Mr Betros said Heritage enjoyed a strong reputation for excellence in customer service, based on its People first philosophy, and would be placing additional emphasis on streamlining the customer experience.

“As a customer-owned bank, our competitive advantage is in offering better prices and better service. We have launched a number of internal initiatives that focus on how we can make our processes simpler, easier and quicker for our customers,” Mr Betros said

"They include projects to remove manual steps in our approvals processes and to challenge procedures that place unnecessary administrative burdens on customers.

“It also means investing in technology improvements that make it easier for customers to deal with us, such as mobile banking apps.

“Heritage added 40 additional jobs to our workforce in 2012/13, and will add a further 12 this year, both to take advantage of new business opportunities and to ensure we continue to deliver excellence in customer service.”

One of those emerging business streams is the pre-paid card sector, where Heritage is a leader in Australia. Heritage has created a separate business unit specifically to leverage this expertise.

“We already partner with Australia Post to issue their very popular Load&Go reloadable Visa cards,” Mr Betros said.

“In August, Qantas released a new Frequent Flyer card that doubles as a reloadable debit card, for which we are the issuer. We also continue to work with Optus on a project to embed pre-paid card technology in mobile phones.

"These high-profile partnerships demonstrate our expertise in this area and the potential this sector has to generate significant new business for Heritage.”

CEO Mr John Minz said that another area where Heritage would look to generate new business was in personal loans.

Mr Minz said Heritage was carrying out an end-to-end review of its personal loans approvals process to identify where it could be shortened and simplified.

“The personal loan market in Australia is substantial, with about $135 billion in loan balances at the moment,” Mr Minz said.

“Our share of that market is currently very small. One reason is that we have not done enough to modernise and simplify our approvals process, and make it easier for customers to do business with us.

"While we will not be relaxing our prudent approach to lending, we believe there is significant potential for us to originate more business via the personal loans market.”

Mr Minz said Heritage would also not be relaxing its commitment to customer value.

“The key difference between Heritage and the big banks is that we focus on delivering great value to customers, not on delivering profits for shareholders.

“In fact, independent analysis by Canstar found that in the 2012/13 financial year, our customers were $40.7 million better off by banking with Heritage compared to the average of the big four banks.

“That’s a tangible benefit of being a Heritage customer.

"There’s also the less tangible benefits of banking with an organisation that cares for its customers and its communities.

“Heritage continues to have a very strong future because we base our organisation on strong values, a strong culture and a strong commitment to the best interests of our customers.”


* Based on a $150,000 loan over 25 years. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.