Demonstrating Shared Value – Deakin University and Bendigo and Adelaide Bank

Amy Goodes
Bendigo & Adelaide Bank

Tim Meade
Bendigo & Adelaide Bank

David Tudor
Bendigo & Adelaide Bank


 
Robert Musgrove
Bendigo & Adelaide Bank

Abstract
Introduction:
Bendigo and Adelaide Bank’s unique banking model, Community Bank®, has been recognised globally as a champion of Creating Shared Value (Porter and Kramer, Harvard Business School, 2011) at the Shared Value Leadership Summit in 2015. Established in 1998, the Community Bank® model responded to a growing trend of bank branch closures across Australia. Eighteen years later, the model has grown to 311 Community Bank® branches across Australia, returning more than $148 million to communities, generating local employment opportunities and supporting future sustainability and prosperity.

In the wake of Government budget cuts to university funding in recent years, Australian universities are seeking income generating opportunities, with many looking to diversify their income streams.
This situation, along with Bendigo and Adelaide Bank’s appetite to trial its Community Bank® shared value model in a new market, provided an opportunity for University and Industry to collaborate and innovate together.

Aim:
Deakin University and Bendigo and Adelaide Bank agreed to work together with the aim of developing a sustainable banking solution for the Deakin University community, utilising the Community Bank® model.

Anticipated benefits for the University Community:
• An additional and sustainable revenue stream
• Provide employment and learning opportunities for students
• Provide a mechanism to help the University to build partnerships with its stakeholders
• Provide an additional opportunity for the University to test new technologies
• Affirm Deakin’s reputation as a forward-thinking leader

Anticipated benefits for Bendigo and Adelaide Bank:
• An additional and sustainable revenue stream
• Opportunity to refine and enhance the Community Bank® model
• Access to research and academic staff to develop our people and test our ideas

The Process:
The comprehensive negotiation process took into account the needs and limitations of each party, including the different laws by which each were bound.

The leaders of both parties met to discuss the principles of the Concept of Shared Value business strategy and the appropriateness of the opportunity.

August 2014-The formation of a Steering Committee comprised of representatives from both parties including various faculties from Deakin University including the Student Union. Chaired by Deakin’s Vice President of Advancement.

January 2015-Deakin University and Bendigo and Adelaide Bank signed an MOU to investigate the possibility of partnering on a range of opportunities including:

• Establishing a CommUNIty Bank® at Deakin University.
• Establishing a Community Education Plan in regional centres across Australia.
• Launching and promoting a number of jointly funded regional scholarships for three years, on terms to be agreed.
• Considering a regional research program to identify and support Community Bank® and regional research needs.
• Exploring digital engagement/innovation opportunities with particular focus on redy mobile payment/crowd funding and communications initiatives.

Community banking was identified as having the greatest opportunity.

April/May 2015-A jointly-managed engagement and awareness campaign was executed to gauge the level of interest from University stakeholders in the proposed CommUNIty Bank®. An online Survey was also conducted with the assistance of an external independent accountancy firm. The response rate exceeded expectations and responses were extremely favourable. The survey data provided insight into the decision making process for both parties. Bendigo Bank also established a presence during O-Week to help test the University market which proved to be highly successful.

A number of discussions occurred between the parties to arrive at an appropriate operating structure.

July 2016-A legal agreement was jointly agreed and signed.

Results and impact:
The Deakin University CommUNIty Bank® was officially opened on 12th September 2016. Significant banking business has already been written, and demonstration of a sustainable income stream has been established. A number of additional opportunities have been recognised throughout the negotiation process and are currently being investigated.

Challenges:
• Complex structures, difficult to navigate
• Digital innovation expectations vs reality of delivery
• To think and do things differently
• Natural progression of people involved in negotiations
• Different perception of urgency

Top tips for others:
• Agree on guiding principles and outcomes upfront
• Be flexible and prepared to challenge the status quo
• Appreciate that each party is different
• Appreciate the risk environment and corporate governance
• Respect what each party does well and look to leverage joint opportunities