A new wave of interest in purpose-driven enterprises is now underway and Queensland is poised to reap the benefits, particularly in the financial services sector.

Multiple studies have found that trust in society’s institutions is being steadily eroded. That’s particularly true of large shareholder-owned corporations motivated primarily by the pursuit of profit. In recent times a number of large Australian companies that were once revered institutions have taken massive hits to their reputation because people feel they are acting badly.

The fundamental driver of those actions was the desire to maximise profit. That’s a key reason people lose trust – when they see companies prioritising profit ahead of their customers, they lose faith. 

It’s also why the environment is right for a renewed focus on the benefits of the member-owned business model. Australia already has a dynamic co-operative and mutual enterprise sector with over 1,800 entities and combined assets of over $191 billion. Australia also once had iconic large mutual institutions such as National Mutual, AMP, and Colonial Mutual. They’ve since been demutualised and sold off, with less than positive results for their members.

At Heritage and People’s Choice, we are bringing back the concept of an iconic national mutual. We’re leading the way in Australia by creating a genuine alternative to the big shareholder-listed banks. The fundamental difference with the member-owned model is that it is driven by purpose, not by profit. Mutuals like Heritage and People’s Choice exist to serve our members, who are our owners. There is no drive to maximise profits, because there are no shareholders to pay dividends to. 

That purpose-driven model is increasingly attractive to a new generation of consumers who demand that organisations operate more responsibly. They expect the corporate sector to have Environmental, Social and Governance (ESG) considerations at the forefront of their operations. That’s another advantage of the member-owned business mode – we do ESG authentically. Research from the KPMG Mutuals Industry Review 2022, and from COBA, found that customer-owned banks’ community contributions per customer are approximately three times more than the big banks – at $6 versus an average of $2. 

For Queensland, there is huge potential to foster a financial services sector based around the mutual banking model. We already have the two largest mutual financial institutions in the country based right here in Queensland, in Heritage and People’s Choice, and Great Southern Bank. There are numerous other smaller mutuals across Queensland, many based in regional areas. As people lose trust in the profit focused big banks, we have ready-made alternatives in Queensland that provide a different approach. One that is driven by purpose, not by profit. It’s time for the member-owned model to regain a more prominent role in our business landscape.