Featured Guest: Melanie Holdsworth

Teachers Mutual Bank Limited has a proud 55 year history as a mutual bank. In 2021 it has defined its purpose as providing good banking for those who do good. Under its multiple brands, it serves Australians working in education, emergency services and healthcare. In 2021, Teachers Mutual Bank Limited added a new brand: Hiver – the first mutual, digital bank for essential workers.

As Head of Organisational Process Excellence, Melanie Holdsworth has been the driving force of building the digital bank from scratch in under 12 months. Hiver was designed with simplicity and community at its core. Hiver consolidates Teachers Mutual’s bank-wide push to a digital-first approach with high quality, member-led banking services because they know it’s what customers are looking for.

Teachers Mutual understands the importance of not only keeping up with the latest technology, but also being the leading edge in a competitive banking landscape. In addition to the launch of Hiver, Melanie has helped to lead the business through a digital transformation to the back-end of the bank’s operations. The bank has eleven robots that perform back-office functions to improve both customer experience and staff engagement. The robots provide a streamlined experience for services like on-boarding, account changes, statement preferences and more.

Melanie is also a finalist in the Western Sydney Women in STEM award 2021.

Episode Transcript

Melanie Holdsworth: [00:00:00] Don’t discount a career in a bank and it is much more than just accounting and numbers and loans and deposits and a career, or, you know, heading out into banking, you can actually make a real difference.

Becca Hoeft: [00:00:19] Welcome to the NextGen Banker podcast, where we explore what’s next in banking and talk with the innovators responsible for creating positive change in the financial sector.

I’m Becca Hoeft, chief brand officer at Sunrise Banks. And I’m joined again by Bryan Toft, our chief revenue officer at Sunrise Banks.

Bryan Toft: [00:00:38] Hey, Becca. Great to be here, David Reiling our usual host is out finding the next big thing in banking, but we’re really excited about our guest today.

Becca Hoeft: [00:00:45] No kidding. So today we’re talking with Melanie Holdsworth of Teachers Mutual Bank Limited, and I believe you’re in Sydney, Australia.

Is that right?

Melanie Holdsworth: [00:00:55] That’s correct, yeah.

Becca Hoeft: [00:00:56] Cool. But before we get started, I just want to do a quick reminder to stick around, to hear our musical feature at the end of the episode, each NextGen Banker episode showcases one new artist from somewhere around the globe representing a wide range of different genres. So hang in there and be sure to check it out.

Bryan Toft: [00:01:15] So let’s give a little background on Melanie. Melanie is the head of organizational process excellence at Teachers Mutual Bank Limited based in Sydney, Australia. And I can tell you what Melanie we’ve been working a lot on process internally here. So hopefully we get into that. You’ve also played an integral role in creating Hiver, a digital bank created for essential workers that is a division of Teachers Mutual Bank Limited. She also works on the artificial intelligence and robotics team at the bank to help streamline administrative processes. And in addition, Melanie was a finalist in the Western Sydney Women in Stem Awards, 2021. So Melanie, welcome to the podcast. We’re super excited you’re here.

Melanie Holdsworth: [00:01:52] Ah, thanks so much for having me. And I’d really like to just before we start acknowledge the traditional custodians of the country throughout Australia, uh, and recognize their continuing connection to land waters, species, and culture, and pay my respects to their elders past and present.

Becca Hoeft: [00:02:09] Thank you, Melanie, for that. So let’s jump into some questions and having just heard your bio from Brian, I have some additional questions that I might add in a little bit later, but first I want to hear more about Teachers Mutual Bank Limited. And the organization started as a bank for teachers and those in the education sector.

Is that correct?

Melanie Holdsworth: [00:02:29] Yeah, so, um, we started around the 1960s and in the sixties, if you know of those times, that was a bit before my time. Um, but it was a really difficult time over here in Australia to borrow money, especially if you’re a teacher, the chances of borrowing money went down. And then if you are a casual teacher, so you didn’t have a permanent role or you were a female, you could literally forget borrowing money because the rules didn’t apply to you.

Um, so a group of teachers pretty much decided to take action and kind of devised a plan to set up their own financial institution. And they based it on a cooperation model. So, you know, teachers would invest their money with the bank and then they would lend them out at lower rates, um, based on your personal risks.

So it wasn’t kind of a blanket rule. It was, we would look at everyone and decide you could be female and borrow cause being female and borrowing back in the city, if you were unmarried, wasn’t really a thing. So, um, but if you think of teaching, most of them were female. So we were kind of leaders in that way.

And so that’s kind of the ethos of where we started. So these teachers were volunteering and doing credit union work in their lunchtimes on the weekends and after school hours. So that’s how we started and that has carried through over our life into our, you know, I think we’re about 55, 56 years down the track now, and that has carried through, that mutual member loyalty has carried through.

Becca Hoeft: [00:04:02] Really interesting. I also understand Hiver, which is a division of Teachers Mutual Bank Limited is part of this special design that, um, you have for banking for essential workers. Can you talk about a little, how did it get started? Why did you feel the need to create something specifically for essential workers?

Melanie Holdsworth: [00:04:27] Yeah, so Teachers Mutual Bank Limited, um, had four brands. So we had Teachers Mutual Bank, which was for teachers and the education, um, anyone who was a teacher and their families. And then we brought on, um, what was called Uni bank. So that was for anyone who worked in universities and their families. And then we brought on another bank, Emergency Services, which is kind of a firefighter, um, emergency personnel, police, that sort of bracket. And then we brought on health professionals, which was for nurses and medical professionals, anyone in that department. And they are very much based around a bricks and mortar model. So you have an office. We do a lot of remote, so we don’t have a lot of offices everywhere, but it was purely a remote model, a bricks and mortar model, I should say.

And so then what happened was pre COVID, so pre COVID we started thinking about what the future might look like in banking, and you know, it’s going digital, it’s going on an app. And we kind of saw a niche where we could potentially, so those four brands specifically catered to different sectors in different industries.

We saw a niche where we could potentially bring about Australia’s first ethical digital bank that would cover all the industries. So nursing, teachers, health professionals, educators, emergency services, and potentially cater for an up and coming demographic. So we recognize that having a bricks and mortar model and having people you know, face-to-face is very important to our membership base, but there’s a new generation coming up who, and I have children who are in their twenties who will never walk into a bank. And, you know, so they are looking for the next bank that provides everything they can in their app. And so that’s where kind of, Hiver started to come to life.

We could actually test and learn and build this digital bank that would still cater for our niche industry. Without actually, you know, disrupting our bricks and mortar model because that’s a key part of who we are, you know, face-to-face having a presence is key to who we are, but we needed to compete in a different way as well.

So that’s kind of where Hiver started to be you know, imagined if you want to call it that. Um, and so then we started working, on pre COVID, kind of a strategic plan for how that might look in the future. And yeah, so that’s where it kind of originated.

Becca Hoeft: [00:07:02] So it’s, Hiver started pre pandemic. And then how has it grown or expanded during the pandemic?

Melanie Holdsworth: [00:07:12] Yup. Yup. So with Hiver we were planning to kind of bring it to, into a project, into a program of works and then COVID happened. And it was like, oh, is this really a good time to be, you know, starting a new program, doing a new project, those kinds of things. But what we worked out was it was actually the perfect time for us, because if you are anywhere globally, you understand the importance of the people that have kept our societies going.

And they are core to who we are. So your nurses, your doctors, your teachers, they are core to who we are. So building a digital bank for them became even more important because you would have access to everything 24/7. You wouldn’t need to come in. We can make things speedy for you. It’s real time payments.

So it actually, COVID probably sped up where you thought we would have wanted to slow down. It actually sped up the need for us to build this type of bank. So COVID, and then the other thing COVID did was really highlight the sectors and the importance. So we’ve always, we’re built on the core of education, health, um, emergency services, but globally, these people began to began to take prominence for what we always knew was really key, crucial industries. They actually got more recognition globally of how important they are to society.

Bryan Toft: [00:08:42] So you must’ve seen a pretty quick adoption then of Hiver, um, with COVID. And is it that, do you find that a lot of the people that have adopted it are coming from Teachers Mutual Bank, or Teachers Mutual Bank Limited where they’re now wanting to use Hiver as their only banking outlet?

Melanie Holdsworth: [00:09:02] Yeah. So it’s probably, so we actually officially only launched a couple of months ago. So the, we kicked off the program probably, uh, towards mid last year 2020. And we launched the bank publicly in March, April very slowly. So, and we’ve done that quite controlled because you know, we’re doing a test and learn environment as well.

So we’re building things and we’re getting feedback and we’re iterating. So that’s been a key important part of Hiver as well. Is that we are taking a lot of feedback from the members jumping on and joining, and then iterating as we build, which is very different to what we would normally do in our bricks and mortars models is because we kind of do everything we want and then we launch it.
Whereas Hiver is very much a transformational brand. A test and learn brand.

Becca Hoeft: [00:09:52] Right. So let me ask you this. My husband is a nurse over at a children’s hospital here in Minneapolis, Minnesota in the US. How would you describe to my husband the advantages of being part of this niche, um, banking that, uh, you guys are experimenting with.

Melanie Holdsworth: [00:10:12] Yeah. So pretty much what we do is we will reinvest.

We re-invest 5% of our net profits after tax into the community that you’re serving. So we’re banking for good, for those who do good. So we will specifically reinvest. So we did in hospitals, we were doing coffee runs, or we will do hamper or care packs or we’ll sponsor events where nurses and professionals are going.

We’ll provide scholarships to nurses and teachers. And so we’re really reinvesting their money back into their industries. And that’s a key component of why we existed from day one. It’s you invest your money and we’ll lend it back out to nurses and back out to teachers. So that’s the cooperative model. So for you’ll get, and also we try to keep our rates low fees and that, because it’s a member based organization, so we don’t have shareholders, public shareholders, the member, our members own our bank.

So, yeah, so we don’t have to — we’re profit for purpose. So we don’t have to worry about keeping our shareholders share prices, kind of, you know, at the detriment of our members, it’s actually our members who own us. So every decision we’re making is, is that going to benefit our members and keep our organization sustainable for them in the future.

Bryan Toft: [00:11:36] And speaking of sustainability and why your members want to bank there, I know that in doing some research on Teachers Mutual Bank Limited that sustainability and climate and socially responsible products are a big focus for the bank. Could you talk a little bit about the bank’s work in climate and sustainability?

Melanie Holdsworth: [00:11:55] Yeah. So pretty much, um, it is a key component of who we are, because it’s core to our members, right? The industries that they’re in this is core to who they are, the climate, um, financial literacy, environment. But for climate from a climate perspective, so we’ve actually been net zero bank for all scope one and scope two emissions, so that’s electricity on fuel since 2012. So this is not something new to us. So when we hear people going, oh, we want to be net zero. We’ve actually been in this space for a very, very long time. And because it’s core to who we are, so we don’t invest in fossil fuel industries. And we’re the only bank in Australia that has out, um, to have all wholesale, resale mortgages and deposits certified by Responsible Investment Australia.

So that means they’ve looked at everything we do, and they have certified us to be responsible investors. And we’re the only bank in Australia to do that. And if you think of our size compared to, um, the corporates, so we have, you know, a four-pillar banking system. You know, some majors have very, very much, pretty much have over 80% of the market.

So for us to be the only bank in Australia to have that, um, we’re pretty proud of that. And it’s something we work really hard for. The other thing is we’ve been the world’s most ethical, one of the world’s most ethical companies eight years in a row. Um, so you know, this sort of thing for us is not new.

And I think that’s the thing. Like we’re noticing that now there’s a lot of financial institutions kind of getting on board with this, but this has literally been essential to who we are.. Since day one.

Bryan Toft: [00:13:35] So did you say there are four banks that hold 80% of the market?

Melanie Holdsworth: [00:13:39] Pretty much. Yeah. Yeah. We have a four-pillar banking system.
So the mutuals and little banks like us, we make up what we call the next tier. So yeah, it’s a pretty heavily dominated major bank system.

Bryan Toft: [00:13:56] And given your long history now in kind of leading the way in social responsibility, uh, I know we’re seeing a lot more conversations about social responsibility at bigger, more mainstream institutions.

I’d be curious, number one, if that’s happening with some of those, that four pillar banking system you mentioned. And, um, and if it is with some of the, you know, the, the ethical commitments and maybe climate commitments, do you think those will remain or is it kind of a point in time and maybe they’ll go away when, when something else, you know, takes center stage.

Melanie Holdsworth: [00:14:29] Yeah. So I think for us, we’re starting to have conversations, but the mutual… so in Australia we have the credit union foundation. Which kind of was a group of credit unions. You know, we probably had over 200 and something we’re probably down to less than 60. It’s going down very rapidly because regulation, red tape, cyber security, all of that is quite costly, um, in Australia, for little credit unions to operate, um, and little a bank. So what we’re seeing is a lot of mergers and acquisitions, but within that industry, we have always kind of been ethically, sustainably focused. So between ourselves, we do a lot of networking and a lot of discussions on how we can be better together.

And so in our own niches, we do that. So, you know, you’ll have credit unions that are there for, um, other industries that we don’t play in. You’ll have ones that are locally based, so there’ll be for a town. So, um, you know, St Mary’s Credit Union, which is your local area, so that these organizations are doing their own things in their own way.

Some are based in regional farming communities. So they will focus more on what they can do to help farmers. And they’re industries go to solar power, go to wind power. It depends what niches you’re in, but for us, I think that’s been our strength as a group. Now, in terms of the majors, they’re kind of, you know, they’ve got a lot more money to play with.

Let’s be honest, they, they’ve got a lot more to do that, but they also have shareholders that are now demanding it. So I don’t think that’s going to go away. Their shareholders are looking at, and people who are investing their money in shares are now starting to question the companies that they’re investing in.

And so it is not going to go anywhere because. You know, if you’re investing money, you’re starting to ask questions. So what do you do in the fossils fields space? What are you doing for, to get to a net zero and that’s not going anywhere, so I think there are different to us in a little bit in that we’ve had this baked into our organization for a very long time.

They’re kind of doing it from an outward focus coming in, um, and our regulators too are very much about climate risk as well now. So what are we doing in that space? So, yeah.

Bryan Toft: [00:16:51] Yeah, thanks for that. And, uh, we’re seeing the same thing in the United States about, you know, banks, smaller banks, especially being consolidated. And where we are in Minnesota, I believe there’s the third most banks in the country. Um, and you know, a bank in kind of every small town. And, you know, that’s really important to those communities, just like you mentioned in those niches. So, you know, the, the other thing about it is, um, values-based banking, as you mentioned, is really important, um, to a lot of people and becoming more and more important.

And I’m wondering if you have any thoughts around values-based banking that you haven’t touched on at this point.

Melanie Holdsworth: [00:17:30] Um, I think for us, it seems, so we have three values, passion, sustainability, and advocacy. So back to the sustainability, it’s actually one of our values. And so we’ve had that baked in for a while now, but to the advocacy bit, I think, and I think that’s where the differential becomes between your kind of corporate style banks and a values based bank.

Right. Because you’re making decisions with a values-based lens. And that makes, that can make your choices on what you do a little bit different. So for example, if we think of Hiver, the bank is a digital bank, right. But one of the biggest things we’re looking at is how do we help and make sure the people that are low socio economic don’t have access to internet, for example, or don’t have access to mobile phones. How, how are we going to make sure they’re included in this journey as well? So it’s not just expecting, well, everyone’s using digital banking, it’s actually putting a lens over it and going okay. But what does that mean?

What else do we have to factor in? So we have to factor in that there are people in our communities that don’t have access to good internet, that don’t have access to a mobile phone. So if we want to design these types of banking platforms, how are we going to then support that and partner with other organizations that can build that in remote communities or in communities that have lower socioeconomic environments.

Becca Hoeft: [00:19:01] Thank you, Melanie. It’s really inspiring to hear what you’re doing in Sydney, Australia. I, I did want to go back before we close out to your bio that Brian mentioned in the very beginning that you are on this artificial intelligence and robotics team at the bank. Um, and I, I really am interested in you as a finalist in the Western Sydney Women in STEM award in 2021.

Can you tell us about that?

Melanie Holdsworth: [00:19:28] Yeah, look for me that was like a really interesting journey because from a cultural background, so I am Maori. So I came from New Zealand to Australia. So that’s, um, um, indigenous in my own country, New Zealand, and then I’m a female. And I’m working in banking and finance, which is predominantly, you know, older males, no offense to anyone listening, but that’s just the reality of it.

And then technology is a similar industry. So I kind of fell, didn’t fall in, but the beauty of working at a values-based bank is you get opportunities. Right? And I think people don’t understand sometimes the opportunities that can come from working with values-based organizations and, um, cooperative banks and mutual banks, because in a big bank, sometimes you don’t get the little opportunities.

And I started my career after school as a nurse, and then have ended up running a robotics AI team. Now, for me, that has been a huge journey. Um, I, you know, I didn’t go to tertiary or higher level education until I was in my late thirties. Like, so the reality of getting to be a finalist, and Western Sydney, so Western Sydney in Australia is, I don’t know how to explain it in your terms, but it’s predominantly a lower socioeconomic area. So there is a stigma of coming from Western Sydney. So even the reason these awards came about was because if you go to somewhere and say, oh, I’m from Western Sydney, it would be like, oh, you’re from out there.
Like, so, um, to actually be a finalist was really important to me to represent to people, um, particularly females who, who might not have thought of a banking career as well, that it is more than just a career. You can have a vocation in a values-based bank. So the difference is you get to do good while you’re at work.

And I think that was really important to me in the STEM space was showing people there is a career in banking. There is a career in finance and I say career, but for me, it’s a vocation because I’m past the point of where it’s just about a career progression. You can give back to communities and technology is the future, right?

There’s no ifs or buts about it. And so for in Australia, there’s a lot of women in their fifties going through divorce. And so they are having to start again from scratch and if they are open to working in technology, they could have a really long career and support themselves really well.

And so that’s part of why, you know, I was put forward for that because I’m very passionate about advocating for that for females.

Bryan Toft: [00:22:14] Well, congratulations on that. That, that is a great story. And you’re the third guest in a row that Becca and I’ve had actually, all three of our guests that did not start out in banking and started out in some other career and ended up in values-based banking.

And I’m the same way. And Becca, I think you’re the same way too. All of us have started out with some other plan in mind, kind of ended up in values-based banking and have found a real passion for it. So that is just a really interesting trend we’re seeing.

Before we go, um, one thing that we wanted to ask you was, do you have any advice for the next generation of bankers, um, that are coming into just like we are, you know, maybe it’s someone not in banking now that’s listening that might start to think, Hey, maybe banking could be a career for me to do good. Um, do you have any advice for that next generation?

Melanie Holdsworth: [00:23:01] I think don’t discount it. That would be my first, um, you know, piece of insight is don’t discount a career in a bank and it is much more than just accounting and numbers and loans and deposits. And a career or, you know, heading out into banking, you can actually make a real difference.

Like if you think of financial literacy, um, there’s a couple of things that will set people up for life: education, financial literacy, health, and a secure environment, right? So wellbeing. And in banking, you get to play a part in all of those. And if you work in a values-based kind of sustainable type organization, you get to do it for good.

Like it’s not just about the dollars and the bottom line. It’s the triple bottom line. So that’s the thing is not just about that capital as in financial capital, it’s your social capital. It’s everything else that goes with that. So I would say be open to something in banking, because you just don’t know.

And I think you touched on it, Bryan, like you just don’t know where you’re going to end up. I started taking the loans over the phone, you know, 25 years ago. And I now have created a digital bank and get to run a robotics and AI team. So, you know, it, wasn’t what I thought of when I was at school and yet, you know, in my younger years, but that’s where I’ve come to.

So just be open, just, open heart, open mind.

Becca Hoeft: [00:24:33] I love it. Melanie, thank you so much. Thank you for sharing your journey. Thank you for your inspiration and thank you for your good and important work that you’re doing every day at Teachers Mutual Bank Limited.

Melanie Holdsworth: [00:24:46] Thank you so much for having me.

Becca Hoeft: For this episode’s musical feature, we’re showcasing Stephen Munoz.

Stephen Munoz is a Durham, North Carolina-based singer/songwriter who describes his music as having hints of folk, soul and rock, all rooted in Chicago blues.

Here is “Here We Are,” by Stephen Munoz.

(song plays)

That was “Here We Are,” by Stephen Munoz. You can find more of Stephen’s music on his Facebook Page: @stephenmunozmusic. If you would like your music featured on the NextGen Banker podcast, email David@nextgen-banker.com Off Site Link with a link to your music and website.

Thanks for listening to the NextGen Banker podcast. We’ll see you soon.