You worked in the old innovation unit within EZN bank. You are promoted and charged with leading the independent bank project through a prototype to test whether the concept is viable. You and your team will need to relocate to rural Victoria and launch the first bank office in a small town. You’re tasked with integrating the business into the community and assessing whether the process can be replicated and at what scale. At the same time, the media are circling and rumours are already flying about big banks once again targeting rural communities.

 

You need to steer your team through a major career transition, uprooting and moving to the country, working within a hostile town, and managing a delicate media situation while balancing the interconnected interests of the bank, the innovation branch, and the community.

 

BACKGROUND​

​

Trust in banking

Trust in the major Australian banks is at an all-time low. After a series of scandals in 2017, the Liberal Party government under Prime Minister Malcolm Turnbull, was forced by an alliance of Labor (the other major political party at the time), Greens, and Nationals to announce the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. The Royal Commission was established on 14 December 2017, headed by Kenneth Hayne, and intended to look into what Commonwealth Bank Australia whistleblower Jeff Morris called “systemic bad behaviour” within the Australian banking industry.

 

The final report covered 496 pages, seven themes, and 76 recommendations. Some recommendations that have been implemented in the intervening years include:

• Rural loans are now managed by experienced rural bankers.

• Banks have stopped charging default interest on rural loans when there is no real prospect of recovering the money.

• Early offers of farm debt mediation.

• Additional annual reviews of how front line staff are paid (where relevant).

 

Some recommendations that are still to be implemented include:

Australian Prudential Regulation Authority should amend their Prudential Standard APS 220 to require internal appraisals of the value of land taken as security should be independent of loan origination, loan processing and loan decision processes. And for valuation of agricultural land to recognise the likelihood of external events affecting its realisable value.

The law should be amended to a new disciplinary system for financial advisers.

 

Some recommendations that have been abandoned:

The borrower, not the lender, should pay the mortgage broker a fee for acting in connection with home lending.

A Treasury-led working group should be established to monitor and, if necessary, adjust the new remuneration model (see above point).

The National Consumer Credit Protection Act (NCCP) should not be amended to alter the obligation to assess unsuitability.

 

In 2018, during the Royal Commission, a Deloitte survey found only 21% of Australians believed banks had their best interests at heart and only 26% believed that banks will keep their promises.

 

A 2019 study by the University of Melbourne asked “Which of the following do you feel is stopping you from improving your household/your financial situation?” to which the most common answer (27.7% of respondents) was “I do not trust financial institutions or advisors”.

‍

Today, the situation is not much better. Although the government has legislated some of the recommendations made during the Royal Commission, there has been a drift back to previous practices. 

 

Other pressures are changing the way banks broadly operate. In 2023, 400 physical bank branches were closed across Australia. According to the Australian Banking Association, 98.9% of customer interactions happen on apps online, and only 13% of payments are using cash. 

 

In January 2023, the impact of regional bank branches was submitted to the Rural and Regional Affairs and Transport References Committee for inquiry. The inquiry aimed to look at the ethics of branch closures in regional areas and the impact of bank closures on customers and regional communities. The inquiry is ongoing. 

 

Agriculture vs. the big four banks

The Royal Commission in 2017 also highlighted the disconnect between agricultural interests and financial products. Some injustices uncovered by the Royal Commission include unqualified valuations of farms, such as a case wherein a farm was valued at AUD1.2 million based on an estimated size of 896 hectares when the farm was only 72 hectares. A Bankwest rural bank manager, who later resigned, earned a bonus of AUD35,000 in 2011 for selling a loan based on that inaccurate assessment.

‍

As noted in this article in The Conversation: “Higher values enable farmers to borrow more money for farm improvements, and the local lending branch manager to earn higher commissions”.

‍

In more recent years, Australian farmers have been made extremely vulnerable as COVID-19 disrupts both international supply chains and the obligated seasonal workforce (visa subclass 417).

​

Cost of living crisis

The 2023/2024 cost of living crisis has affected both suburban and regional Australians as well as farmers and businesses along the supply chain.

 

In May 2023, Amy Remekis wrote for the Guardian: “The Australian Bureau of Statistics says the cost of groceries has increased by 8% year on year. That’s in the aggregate. For anyone living on the margins, every increase in essentials means one less essential. Even for those who can afford some discretionary spend, the cost of essentials is biting.” 

 

The ABC reported a Brisbane shopper noticed the price of cherry tomatoes increasing from “$3.98 per punnet to $6.98 in a matter of months”.

 

The Woolworths/Coles supermarket duopoly has also been accused of being unfair to both consumers and farmers in this Guardian article.

​

Coles and Woolworths dominate Australia’s supermarket sector, with a combined control of two-thirds of the market. Aldi is the next biggest, with just over 10%.”

 

In response to the crisis, the Government proposed tax cuts.

 

From 1 July 2024, the tax cuts will:

• reduce the 19 per cent tax rate to 16 per cent

• reduce the 32.5 per cent tax rate to 30 per cent

• increase the threshold above which the 37 per cent tax rate applies from $120,000 to $135,000

• increase the threshold above which the 45 per cent tax rate applies from $180,000 to $190,000

 

The proposed cuts have generated controversy. In an ABC article titled “How the revised tax cuts affect people like you” journalists Inga Ting, Thomas Brettell, Katia Shatoba and Alex Lim explain how the tax cuts will impact different cross sections of Australia:

 

Climate concerns

At the same time, other forces begin to converge and implicate banks. Among other causes, the US election in and COVID-19 led to a disappointing outcome at the 2021 COP26 conference on climate change, especially in terms of driving new environmentally-geared financial initiatives.

 

In the weeks after COP26, the Morrison government overrode several states’ participation in a greenhouse emission reduction scheme, global Under 2. This move felt at odds with the direction the Australian public is leaning. According to a 2021 Lowy Institute poll:

• 91% of Australians say they would support the federal government ‘providing subsidies for the development of renewable energy technology'

• 74% of Australians say ‘the benefits of taking further action on climate change will outweigh the costs’

• 60% of Australians say ‘global warming is a serious and pressing problem. We should begin taking steps now, even if this involves significant costs’

• 63% of Australians support a ban on new coal mines opening in Australia

 

In September of 2021, Murdoch-owned News Corp pledged it would end its long-standing editorial hostility towards carbon reduction policies.

 

In 2023, New South Wales EPA reported Australia’s weather patterns are demonstrating increases in flash flooding, drought and fire conditions and an increase in extreme heat events associated with warming and a decline of rainfall across the south-west and south-east of Australia. 

 

Natural disasters tend to disproportionately affect people living in remote and regional parts of the country due to lack of service provision and crisis support.

 

Enter the blockchain

Running in parallel to the decline of trust in big Aussie banks and the rise of climate concerns, disruptive blockchain technology is broadening the mainstream definition of economics to force a more global perspective. Many countries have been slow to legislate protections or formalise opportunities around cryptocurrency, NFTs, and borderless financial instruments.

 

What’s next?

Low trust in banks. An emerging landscape for financial innovation. Consumer desire for climate-friendly tech. A cost-of-living crisis. The mood is right for a change within traditional banking and financial initiatives.

 

 

PROPOSAL AND TEAM

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Introducing EnergyBank

EnergyBank was born from EZN’s internal design and innovation unit, set up in 2018. In the intervening years, the unit worked on an internal client-based model, responding to initiatives in specialist units. But now the design unit is being pulled out as an independent entity to construct EnergyBank, and heralds a reshuffle in EZN’s organisational structure.

 

EnergyBank is tasked with building a small-scale, energy-focused bank based on blockchain with a bias towards lending at low cost for home-based sustainable energy as well as major tech investment in renewables. That said, EnergyBank is still a subsidiary of EZN bank.

​

EZN CEO Jackie McKensie wants EnergyBank to tap into micro-finance, crypto, and blockchain with a social and climate-focused conscience. Several major banks have begun to introduce similar functions to appeal to a younger audience and keep up.

‍

The design research and development proposal for EnergyBank was prepared by an EZN Executive with input from the Bank’s design and innovation unit (this is where you come in - more in on that in a moment).

 

EZN Bank, established in the 1960s, was traditionally a rural bank and was implicated in the Royal Commission. EZN bank employs 5,600 employees across 280 branches. EnergyBank is a new unit authorised by EZN CEO Jackie McKensie, designed to counter criticism from the Royal Commission findings. Jackie wanted to introduce ethical banking initiatives across the entirety of EZN bank but realised this was too ambitious in the first instance.

​

EnergyBank will be the first in several initiatives aimed at improving trust in EZN. McKenzie has assigned Victoria Hussey, the former founder and CEO of solar startup Brighte, as CEO of EnergyBank. Victoria has been tasked with developing ethical banking at the core of this EnergyBank. The EZN board will monitor this as it rolls out.

 

 The proposal outlines the following as key pillars of EnergyBank:

• Customer/client facing policies and practices

• A whole-of-bank tech platform with superior UX/UI

• Personal connection for small borrowers through to large investors

• An activist approach to energy and micro-finance (social and economic values) in the public sphere (including funding initiatives in the energy/community sector; making public statements critical of exploitative and extractive practices – a bias towards generative banking)

• Positive relationship with the parent bank

• Defined boundaries with parent bank

• Transparent, ethical and social

• Accountability through the Bank’s charter

• ‘Time’ as a key value in the bank

 

Your role

You are a human-centred designer and you work in the EZN design and innovation unit. You are asked to lead the implementation of a contained proof of concept. McKensie and Hussey decide the proof of concept should involve your team embedding within a rural community, building back trust, and micro-financing socially-conscious energy-focused initiatives.

You were involved in the design of the plan but you never expected to be chosen to implement it. You’re a little out of your depth.

 

More about you

You are a 38-year-old human-centred designer. You live with your partner and two young kids (ages 5 and 8) in the suburbs.

‍

You graduated university with an accounting degree before deciding (after an agonising year in the most boring job imaginable), that it wasn’t for you. You then made the hard choice to pivot to innovation and design, completing a masters at RMIT, including an onsite Masterclass in Barcelona. You decided to make use of your bachelor degree and work as a HCD in the finance space.

‍

You spent two years with a start-up as a generalist experience designer developing an app that uses the blockchain to create secure transactional contracts between mistrustful parties. When this role became too small for you, you quit and spent four years as a user experience designer at CommBank.

‍

You got the job at EnergyBank two years ago, after an intense series of interviews and tests. Ultimately, you won the position because of your background in fintech and conventional banking. After a year, you were promoted to head of your team.

‍

You’ve also done consulting work for apps and finance instruments, including Afterpay and Nimble.

 

Board of advisors

The first task you’re given is to set up a board of advisors for yourself. Both McKensie and Hussey agree this is a huge undertaking and you’ll need a support group around to advise you. You will choose four advisors from a set of existing personal and professional connections to guide you in this project and in your career.

‍

“You are responsible for creating your own job title and carving out a successful career. You are also the primary decision maker in your professional life. This is why it is helpful to think of yourself as your own business with you at the helm as CEO,” said Arpad Szakal, an executive recruiter in a LinkedIn article.

‍

A personal board of advisors is a new concept. The current and incoming generation of workers change careers and jobs more often than previous generations. A 2016 Gallup report found millennials (people born between 1980 and 1996) are increasingly seeking purposeful work over job satisfaction and found they “move freely from company to company, more so than any other generation”. 21% of millennials have changed jobs within the last year, three times more than non-millennials. A personal board will help to guide you in your new role and provide resources and experience you can lean on.

‍

“Your PBOD exists to act as a sounding board, to advise you and to provide you with feedback on your life decisions, opportunities and challenges. They provide you with unfiltered feedback that you can’t necessarily get from colleagues or friends. A personal board of directors doesn’t necessarily meet as a whole, and it’s your choice as to whether you formally identify individuals as a member of your PBOD,” said Lisa Barrington, in a Forbes article.

‍

As the leader of the team, you’ll also need to discover new ways of working that align with the EnergyBank agenda.

​

GETTING STARTED

​

Media scrutiny

EZN bank was implicated by the Royal Commission for overvaluing land and overextending loans for farmers. While bigger banks bore the brunt of the media, EZN doesn’t want to invite comparison or rehash the accusations.

 

Even though EZN bank is a small bank, one of the most compelling RC cases uncovered by journalists was linked to EZN and spent a long time ricochetting around the news cycle.

‍

A young farmer and his family lost their organic dairy farm due to an unscrupulous EZN loan manager who egregiously overvalued their land. The farmer’s land, on the outskirts of Byron, was a community hub and supported a shop for local produce, a popular cafe, and a Men’s Shed.

 

The farmer himself is well-spoken and environmentally minded, his partner has a law degree, and they did the rounds of morning TV and radio shows. They are still advocating for their case and others through Facebook groups, podcasts, and local events. The tight-knit local community also rallied around the family and was vocal in admonishing EZN during the Royal Commission through whatever channels were available to them. Trust levels for banks in their community is zero.

 

Establishing a foothold in Mirboo North

After weeks of research, Hussey and McKensie select the town of Mirboo North in Gippsland to establish EnergyBank prototype branch. Mirboo North is a small farming town a two to three-hour drive from Melbourne, with a population of around 1600. The farms in the region grow 80% of Victorias brushed potatoes for six months of the year.

 

As ethical banking is at the centre of the EnergyBank modus operandi, it feels appropriate to test with a rural audience who have previously had bad experiences with big banks.

 

Corporate culture clash

Before the EnergyBank reveal and launch, the EZN innovation unit consisted of 32 people - a mix of HCD, graphic designers, creatives, developers, and managers. After the schism, only eight will be left in the EZN bank innovation unit and the rest moved over to EnergyBank. EnergyBank has a different set of conditions, expectations, and roles than EZN. To achieve the aims, the work culture will also need to change - this isn’t a corporate banking setup anymore.

 

Of the 24 people who are flagged to move over to EnergyBank, four choose to leave. You and the managers believe you’re over the worst of the churn. However, once it’s announced that the prototype will roll out in rural Victoria and future EnergyBank endeavours will focus on regional clients, more of your colleagues grow concerned.

‍

Your inboxes are filled with worried messages from people who now feel insecure.

 

“hey, can we talk? I have three kids in school and a mortgage, and my wife is terrified we’ll be asked to leave the city which we can’t, her mother is in a nursing home near our house. We have literally no room to move.”

 

“I could wrap my head around the energybank thing but going bush might be a step too far for me. I grew up on a farm, i don’t want to go back.”

 

“I’ve just enrolled in a masters program and i’m just choosing my subjects - you need to tell me if I’m being sent to Mirboon (Mirnabol?) asap because I need to organise my life.”

 

The reality is their day-to-day work will be focused on rural communities and some of the team will need to relocate. Working in a rural-focussed startup is a far cry from the finance job many of your team originally accepted. You will need to consider how to manage this transition, negotiate new working and salary conditions, decide who in your team will need to relocate and, if so, how to incentivise relocation, all the while remembering EnergyBank’s ethical banking ethos.

 

Ethical micro-loans

Is there such a thing as an ethical micro-loan? You’re about to find out. Hussey and McKenzie have a conversation with you, informing you of the grand plan to use Mirboo North as the testing grounds for EnergyBank’s new offering - environmentally-friendly, community-focused micro-loans.

 

‍Mirboo North was chosen because of its tourist appeal. Micro-financing in Mirboo aims to capitalise on unique features of the town and build its fiscal profile while also addressing social problems. A 2016 survey of Gippsland residents by the Gippslandia publication painted the following picture:

‍

“After a bit of digging, we uncovered some validating and somewhat troubling statistics. In Gippsland, 75% of adults are overweight or obese (1). In the Latrobe Valley 8.4% of our residents are unemployed (2), and 25.5% of our youth are disengaged from study, training or employment (3). The Latrobe Valley is home to a number of ‘food deserts’, which means that fresh and healthy food is not accessible to many members of the community. For every 1 fresh food outlet, there is an average of 3.7 takeaway food outlets (4).”

 

Examples of ethical micro-financing in Mirboo North could include:

• Regional food festival

• Solar power for the men’s shed

• Food and nutrition education

• Youth art programs

​

NEXT STEPS

​

Early days

The relocation doesn’t go as smoothly as you might have hoped. At least half your team still travel back to Melbourne on weekends as they struggle to relocate their families. You trial flexible work hours and working from home to accomodate the team’s needs and in the process, realise that the expensive office you’re renting isn’t getting much use.

 

Coworking

You decide to find a new space to set up a coworking space for your team and the community at large. Unfortunately, coworking is bit of a new concept in Mirboo and you face some communication challenges when you explain it to locals.

 

Media incoming

The PR team at EZN bank love the co-working idea and arrange to send a journalist out to photograph the space and interview you about EnergyBank. The content is slated to appear in a national publication in a (paid) feature as well as the EZN newsletter and social media.

 

New space

It doesn’t take long to find a nice property with frontage onto the main street of Mirboo. It’ll need a few renovations to convert it from what it was (a bookshop) to a slick open-plan office. The timing of the incoming journalist and the renovation is tight so for a week or so, all you can think about is logistics. You don’t notice the grumbling around town.

​

​

​

​