Workplace branch roll-out progresses for ME Bank

ME Bank is going against the current belt-tightening trend in the banking market with an aggressive branch expansion strategy.

The bank opened 10 new branches in the second half of last year and will have added another 22 by June 30. It is presently in negotiations over another 50 sites.

These are branches with a difference, however. ME Bank has developed a workforce-based banking strategy and is hanging out its shingle in offices, factories and even at building sites.

The bank's aim is to acquire 15 per cent of the workforce at any site where it sets up shop, and it says it is on track to meet this target.

When Jamie McPhee took over as chief executive of ME Bank early in 2010, one of the things that struck him was the bank's ad hoc branch strategy.

McPhee said: "We have 13 branches: eight in Victoria, two in Queensland, two in the Australian Capital Territory, one in Perth and none in New South Wales, South Australia or Tasmania.

"We looked at our target market, which is the members of industry superannuation funds. Our relationships with industry funds and unions give us access to workplaces and we had used that access to send in business development managers to do brand building.

"We decided to take that a step further. This sort of thing has been done before. Industry-based credit unions did it a long time ago and Barclays Bank is doing it in Europe."

Last July, ME Bank started offering banking services at the OneSteel plant, at Laverton, Victoria, and at three Multiplex building sites around Melbourne.

Since then it has put representatives into an ASSA Abloy plant in Melbourne, a Telstra office, and into the head offices of HostPlus, Superpartners and Slater & Gordon Lawyers.

Some of the sites are pop-ups, while others are more permanent fixtures.

McPhee said: "For this to work it needs to be regular. You have to be there when you say you are going to be there.

"We are still learning about the best hours to operate in different types of workplaces and the best material to hand out.

"It works better where you have the active support of the employer. They are all happy to have us there, but some are more active in their communication."

One of the advantages of the concept is that ME Bank has low overheads. It does not pay rent to operate in a workplace. The proposition is that ME Bank is invited into the workplace as a value-added benefit for staff.

McPhee said dealing with customers is much the same as in a conventional branch. The pattern of product sales is similar, as is the customer satisfaction level.

McPhee believes ME Bank could end up operating out of 2000 or more workplaces. He plans to close the 13 conventional branches as these no longer fit the group's strategy.

He said the bank has had a few knock-backs. "The company might have a relationship with another bank and they don't want to challenge that relationship. Others have banks as sponsors and see a conflict."