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Savings under the Alliance Bank® Solution

8 March 2018 |Industry Updates

Savings under the Alliance Bank® Solution

8 March 2018 |Industry Updates

While margin revenue is shared there are considerable cost savings to be realised under the Alliance Bank® Solution when compared to the ADI Model. In this example AWA Alliance Bank® expects to realise savings in the vicinity of $820,000 per annum.

‘CEO’s and Boards spend considerable time focusing on operating costs. The Alliance Bank® Solution has enabled us to realise cost savings that were previously part of our standard operating expenses. This has and will continue to make a significant contribution towards our bottom line,’ says Graeme Scannell, CEO AWA Mutual Ltd.

Scannell has highlighted the following areas to demonstrate where real savings can be realised.

Audit

‘As an ADI our external audit costs were approximately $44K pa whereas these are expected to be $20K in 2017/18. Our internal audit costs were approximately $16K pa and these are expected to be $8K in 2017/18.’

Saving - $24,000 pa and $8,000 pa respectively.


Insurance

‘As an ADI our Bond and Package Insurance cost was approximately $42K pa, under the Alliance Bank® Model this was $25K in 2016/17.’

Saving - $17,000 pa.


GST

As an ADI AWA was Input Taxed and therefore could only claim back a proportion of the GST that it paid (i.e. the RITC benefit) whereas under the Alliance Bank® Model we are able to claim back the full amount of GST paid amounting to a saving of approximately $100,000 pa.

Saving - $100,000 pa.


IT

‘From 1 March 2017 Bendigo and Adelaide Bank began to pick up the majority of our IT costs reducing them from $452K pa when we were an ADI to an anticipated $120K pa on-going.

Additionally they also pick up the IT cost of all new products - i.e. new Payments Platform in 2018.’

Saving - $332,000 pa + all new products under the IT umbrella.


Processing Costs

‘Cuscal costs (including Redicard production costs and rediATM transaction Fees) were approximately $139K pa as an ADI these are now totally paid for by Bendigo and Adelaide Bank.’

Saving - $139,000 pa.

FTE

‘Relocation of various back-office functions - Direct Entry, Member Cheque, Delinquency Management, etc. - together with a significant proportion of the Regulatory and Compliance obligations - notably APRA, AFS Licence, Credit Licence, etc. - are now undertaken by Bendigo and Adelaide Bank. This represents approximately 3 FTE positions equating to approximately $200K pa’.


Saving - $200,000 pa.

As you can see a total of approximately $820,000 in savings will be realised per annum plus any new IT products introduced. For AWA Alliance Bank® this will have a significant impact on the bottom line. Worth thinking about when considering your options for the future.

For more information contact Graeme Scannell on 0417 301 043.

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Bendigo and Adelaide Bank Limited, ABN 11 068 049 178 AFSL / Australian Credit Licence 237879. AWA Mutual Limited®, BDCU Limited®, CIRCLE Mutual Limited®, NOVA Mutual Limited® and SERVICE ONE Mutual Limited® (Alliance partners) are independent mutual entities that have formed an alliance with Bendigo and Adelaide Bank. AWA Alliance Bank®, BDCU Alliance Bank®, CIRCLE Alliance Bank®, NOVA Alliance Bank® and SERVICE ONE Alliance Bank® are trademarks of Bendigo and Adelaide Bank Limited.

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