Regionals must be more nimble to take on big banks

Regional financial institutions, once solely focused on their home states, have expanded their horizons in recent years. Institutions such as Bendigo Bank, Suncorp, St George Bank, Bank of Adelaide and the Bank of Western Australia are now looking to actively expand into other states, and are offering innovative products and, arguably, a higher level of customer service.

Traditionally, regional financial institutions focused on home loans in their own states, and they still derive much of their revenue from these.

The size and national presence of the Big Four means that regionals have to not only be more flexible to maintain and grow their market share in their own states, but look to move into new markets interstate. The push towards electronic banking is assisting these moves, as customers no longer need to be geographically located in the same states as their banks to use their products. In addition, most regionals use mortgage broker and fund manager partnerships to boost sales of their products. They are also expanding both intrastate and interstate by increasing their presence in community banking, as with Bendigo Bank, and by pushing into the business banking market.