From Shoebox to Bank: Michelle Bagnall and the story of Bank First.

Michelle Bagnall is the CEO of Bank First, a mutual bank with 92,000 members and $4.7 billion in assets that exists to serve nurses and teachers in Australia. In this episode she tells Dexter the origin story of a bank that started with $480 in a shoebox, explains why nobody at BankFirst gets paid a bonus, and makes the case that mutuals were the original fintech startups.

Bank First. Forty-eight teachers and a shoebox.

I have spent almost two decades placing executives into fintech companies. I have watched founders raise millions on pitch decks that promised to give people access to fair, transparent, lending. Every investor presentation I saw between 2015 and 2022 had the same slide: banks are broken, we are the fix, we are changing the world. Some genuinely were, others were all about changing their world.

Last week I sat down with Michelle Bagnall, CEO of BankFirst, and she told me a story that made me feel passionate about Fintech again. In 1972, a group of 48 teachers in Victoria decided they were being ignored by the banks. So they pooled $10 each, put $480 in a shoebox, and started lending to each other. Their first loan was $250 to a single female teacher who needed help getting into a house.

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Today, BankFirst has 92,000 members and $4.7 billion in assets. Nobody at the bank gets paid a bonus. Not the CEO, not the board, not the branch staff. Every dollar of profit goes back to members or into the communities the bank serves.

About Michelle Bagnall

Michelle Bagnall is the CEO of BankFirst with more than 20 years in banking spanning NRMA, RBS in the UK, and multiple listed and mutual institutions. She grew up in Southwest Sydney, went back to university as a mature age student at 23, and describes herself as an accidental banker who found her way home in the mutual sector.

The Peer to Peer model and Fintech.

When SocietyOne launched in 2012 as Australia’s first peer-to-peer lending platform, the pitch was simple: cut out the banks, connect borrowers and lenders directly, give everyone a better deal. It raised $46 million in venture capital. It was backed by James Packer, News Corporation, Kerry Stokes and Westpac.

RateSetter quickly followed and Peer to Peer lending was the buzzword in Fintech right up until 2018 when NeoBanks and BNPL started to grab the attention of investors.

In 2021, MoneyMe acquired SocietyOne for $94 million. The peer-to-peer model was quietly shelved.

Zopa launched in the UK in 2005 as the world’s first P2P lending platform. By 2020 it had applied for a banking licence. By 2021 it had closed its P2P arm entirely and pivoted to become a regulated digital bank offering savings accounts and credit cards.

LendingClub, founded in 2006 in the US, acquired Radius Bank for US$185 million and shut down its retail P2P platform the same year. RateSetter, which had roughly £1 billion in loans on its books, was acquired by Metro Bank. The entire P2P lending sector converged on the same conclusion within a 12-month window.

Ravi Anand, managing director of ThinCats, a UK alternative lender that also shut its doors to personal investors, summarised it bluntly. P2P lending, he said, was a “moment in time response” to the global financial crisis. The model worked when trust in banks was at its lowest. Once trust recovered, the structural economics of crowdfunded lending could not compete with deposit-funded balance sheets.

Every major peer-to-peer lending platform in the world eventually decided it wanted to be a bank. And while they were spending a decade and hundreds of millions of dollars figuring that out, a model that already did exactly what P2P promised was sitting in a shoebox in Victoria. Community-based lending. Aligned incentives. Lower costs. Running since 1972.

50 years of patient capital.

The Australian mutual banking sector holds $178.4 billion in assets as of 2025, according to KPMG’s Mutuals Industry Review. That is 2.7% of all authorised deposit-taking institution assets in the country. It is not large relative to the big four, who control about 70% of the market. But it is not supposed to be.

Mutuals are not a niche. They are one of the oldest forms of organised lending on the planet. The credit union model traces back to 19th century Germany. Friedrich Raiffeisen built lending cooperatives in rural communities where formal banks refused to operate. The principle was identical to what 48 teachers did in Victoria a century later: people who share a common bond pool their capital and lend to each other on terms that a distant institution would never offer. It is the same principle that SocietyOne launched on. The difference is that the mutual version was never designed to generate an exit.

The structural difference is not scale. It is incentives. A mutual has no shareholders. There are no quarterly earnings calls. There is no investor pressure to prioritise short-term margin over long-term member outcomes. Capital allocation decisions are measured in decades, not funding rounds.

In the venture-backed fintech world, the dynamics are inverted. Australian startups raised $5.48 billion across 390 deals in 2025, a 31% increase on the prior year. Fintech was the second-highest funded sector at $868 million. But 46% of investors surveyed by Cut Through Venture saw at least one portfolio company shut down during 2025, and 77% reported layoffs across their portfolios. The capital is flowing, but the structural pressures of the VC model create a set of incentives that are fundamentally incompatible with building patient, community-first financial infrastructure. Grow fast, demonstrate unit economics, exit within seven to ten years. That timeline does not suit a bank built to last 100.

Michelle Bagnall has a phrase for the BankFirst model. It is not “not for profit.” It is “for profit, for purpose.” The distinction matters. The bank generates returns. It just does not distribute them to external shareholders. The more successful BankFirst becomes, the more it invests back into nurses and teachers. That feedback loop has been compounding for over 50 years.

Why understanding credit risk is essential for investors.

The advantage of the mutual model is not ideological. It is structural.

Consider credit risk. BankFirst lends heavily to nurses and teachers. These are professions with high rates of casualised employment. Shift work, agency contracts, no guaranteed hours. The standard credit risk frameworks used by the big four were not designed for this workforce. They were designed for full-time employees with fixed salaries and predictable income streams.

BankFirst can design products specifically for casualised workers because it has no pressure to maximise net interest margin across a diversified portfolio. It can take a longer view on credit performance. It can underwrite people the major banks would reject on automated scorecard alone. And it can do this not because it is more charitable, but because its capital structure allows it.

Then there is the no-bonus model. In listed banking, variable compensation drives behaviour. Risk appetite, product design, sales culture, hiring priorities: all of it flows downstream from incentive structures tied to short-term financial targets. BankFirst removed that lever entirely. Nobody gets a bonus. The CEO included. Michelle Bagnall does not frame this as sacrifice. She frames it as alignment. When nobody is being paid to optimise for the quarter, decisions default to what is right for the member over the long term. You can build a faster app. You can lower origination costs. You can use AI to automate credit decisions. But you cannot engineer away the structural tension between investor return timelines and the long-term, patient relationship that community lending requires. The mutuals solved that problem in 1972. They did it with governance, not technology.

Inventing a model that already existed.

The fintech industry has spent 15 years and billions of dollars trying to rebuild something that already existed. The narrative was that banks were broken and technology would fix them. What nobody factored in was that a different ownership structure, not a different technology stack, was the real disruption.

The mutual sector in Australia is consolidating. Fewer, larger mutuals are emerging through mergers. Bank Australia absorbed Qudos Bank and became just the fourth mutual to reach $20 billion in assets. The sector grew assets by 5.8% in 2025. This is not a sector in decline. It is a sector figuring out how to apply the structural advantages of member ownership at economies of scale.

The talent signal is hard to ignore. I place executives for a living. The candidates I speak to who have spent 10 or 15 years inside listed banks are asking different questions than they were five years ago. They are less interested in total comp and more interested in what happens after they leave. They want to point at something they built that still exists, that still serves the people it was designed for. That is not idealism. It is the natural career trajectory of someone who has already earned enough to care about meaning. Mutuals offer that. The difference now is that highly talented Fintech operators are making the move.

Tier One People is working exclusively with Bank First to hire their first ever Chief Product Officer. If you’ve built consumer lending products in a high growth Fintech reach out to me.

Links from this episode.

• Bank First
• Careers at Bank First
• Bank First community impact, including the scholarships and partners Michelle mentions
• Pinchapoo
• Business Council of Co-operatives and Mutuals (BCCM)
• Common Equity Housing Limited
• Michelle Bagnall on LinkedIn
• Tier One People

More on mutual banking on Fintech Chatter.

• Greg McKenna, CEO of Police Bank (2023), on the mutual banking model and partnering with fintechs
• Stevie-Ann Dovico, CIO of Beyond Bank (2024), on talent moving into community banking
• Peter Jones on Nimo Industries: breaking into mutual banks (2026)
• Move Bank on Constantinople: a world first bank migration (2026), with Move Bank CEO Mike Currie
• All Fintech Chatter episodes

Full transcript.

Lightly edited for readability — filler words removed, wording otherwise unchanged.

Dexter Cousins
Hello and welcome to Fintech Chatter. I’m Dexter Cousins, your host and the founder of Tier One People, the executive search firm that’s dedicated to helping you find the leaders who can guide you through the AI native fintech builds. Today’s guest is Michelle Bagnall, the CEO of Bank First. We’ve got a little bit of a different angle on the show today. Michelle’s the CEO of a mutual bank, and I thought it’d be great to bring her along and talk about the origins of peer-to-peer lending. Michelle, welcome to your Fintech Chatter debut.

Michelle Bagnall
Hey Dexter, great to be here.

Dexter Cousins
It’s great to have you with us. I really appreciate you coming along. A bit of a treat, I think, for our regular listeners and viewers who, I don’t think we’ll have experienced a bank CEO quite like yourself. So, not to put you under any pressure, but I think one of the great things to set the scene is we had some technical issues trying to get onto the recording platform of the podcast and Michelle was on there trying to get it fixed, which I think is very unlike any other banking CEO I’ve ever dealt with.

Michelle Bagnall
They call me the quasi CTO here, Dexter, because quite often when we’re in meetings, I’m the one having to fix the tech when things don’t quite go the way they should. But the team, they hustle here and it’s great. This is what I love. I’ve just Teams messaged somebody, it was fixed within 2 minutes. So,

Dexter Cousins
It’s, yeah, it’s a little bit more hustle than you normally find in a bank. It’s great. And I mentioned there in the intro, you’re kind of the original peer-to-peer lender. And if I look back at fintech 2013, really the first fintechs in Australia were peer-to-peer lenders as well. And one of the things that’s really kind of struck me is, particularly where we’re at now with cost of living and the challenges in the economy, the time for fintech to really kind of fulfill its early promise of a fairer financial system I don’t think has ever been more important, and it was one of the reasons why I really wanted to get you on the show. So I thought maybe the best place to start might be the origins of Bank First and how the bank got started.

Michelle Bagnall
Yeah, look, it’s absolutely fair to say that co-ops and mutuals were the original startups, and that’s language we quite often use here, because the why mutuals exist is because there were problems that others weren’t solving. And that’s the foundation story of Bank First really. So, we started out of the Victorian Teachers Union. And there were 48 members of the union who decided that teachers were not getting a fair go from the banks and were not being served. And they all put 10 bucks each in a shoe box, literally in a shoe box. I wish I still had the shoe box cuz it is the thing I get asked the most. Have you still got the shoe box? No, we don’t.

But 10 bucks each in a shoe box. So $480 worth of capital, makes me a bit sick as a banker, but 480 bucks of capital. And the first loan was to a single female two kids teacher. Couldn’t get a bank to give her a bond for a rental, a house for her and the kids. And so our very first loan, handwritten in the ledger downstairs, is 250 bucks to this teacher to get her into a house. And that’s the essence of who we still are today.

The thing I love most about that foundation story is we met a lot of the founders and we’re still in touch with a lot of the founders. They’re regularly engaged with us, which is brilliant. But we didn’t know this, but they used to call themselves the renegades and rat bags of the union. How great is that? How great. Like, how naughty do you have to be to start a credit union? So, they were teaching by day and they were bankers by night. Whether they intended that or not, but the whole purpose of that was to fill a need that somebody else was not filling. And that’s where the passion for startup comes from and that’s where our passion still comes from.

Dexter Cousins
Now, when we talk about mutual banks, I think there’s a little bit of kind of confusion around what a mutual bank actually does and what it stands for, and particularly around customer-owned. Can you talk us through the model?

Michelle Bagnall
Yeah. Look, the first thing I’m going to say is the misnomer is that we’re somehow not a real bank. So we are regulated exactly the same way as any other bank in Australia. So for the lines of business that we run, which is primarily retail lending, we’re regulated exactly the same way as a CBA or Westpac or whatever. As the CEO I’m held to exactly the same accountabilities as any other CEO of any of those banks. So it is a real bank and it’s a safe, strong bank. We have all the same requirements of the regulator that any other bank does.

The major difference comes in where our capital comes from and who owns us. So our owners are the members of this bank and the capital comes from the retained earnings. So we don’t have that imperative that listed banks have to keep going back to the market every quarter. And I’ve come through listed banks, which I know we might cover off later on. I’ve come through listed banks, and that quarterly Excel spreadsheet we all fill out to demonstrate that we’re doing what we said we were doing to the market so that people leave their money with you. That’s where their capital comes from. Our capital doesn’t come from there.

So our capital comes from our retained earnings. Now that’s double-edged sword, because obviously there’s always finite capital, but the brilliant part of it is what it lets us do in terms of the way we make decisions. So we make decisions for the long term. We’re not thinking about a quarterly Excel spreadsheet when we make a decision to do something. We’re thinking about the one question. Is this in the best interest of the members? Is this going to serve nurses and teachers and help them thrive? That’s the one question we’re thinking about as we make decisions.

So, where yes, we have access to finite capital. We manage it very carefully, but all of our regulatory requirements are exactly the same as any other bank of our kind. But we actually make decisions for the long term and we act in the long-term interest of the bank. We talk a lot here about legacy leadership, and about the legacy we leave behind.

Dexter Cousins
I’m keen to talk about and just give some context of where you are now from the origin story. So, you’re now, what, 92,000 members, 4.7 billion in assets. I’m sure you’re not collecting cash in a shoe box anymore. So, how has the business and the mission changed as you’ve scaled to that level?

Michelle Bagnall
In some ways, it is very much the same. So the ethos and the center point of why we exist is still to fill the spaces that others won’t fill. So when you think about the complexities of who we serve. So yes, we’re safe, strong bank, 92,000 members. Important to say we’ll bank anybody so long as you’re a good credit risk. We’ll bank anybody, and particularly if you care about a nurse or a teacher in your life, but knowing that our profits go to nurses and teachers in Australia, the 1.5 million nurses and teachers, thinking about how do we help them thrive.

So yes, we were started from teachers, but nurses and teachers is now where we funnel our profits to, to help them. And that’s really about the complexity of their lives. That’s about the casualization of their workforce. It’s about the fact that often they’re running multiple jobs or their hours are uncertain or they need ease and speed and don’t create another problem for me. My focus is on my patients, my focus is on my students. It’s the understanding of that and filling the spaces where actually, how do we design products, design services and offerings that speak straight to that.

The other part of that too is, we talk internally, and I don’t know if I’m allowed to say this, Dexter, but I’m going to anyway, but we talk internally about being a bloody good bank. We are a bloody good bank, but we’re actually more than a bank. And that more than a bank is the main game for us. So, it’s how do we use the profits? The more successful we are, the more money we push back into nurses and teachers and helping them thrive. How do we use the profits in the most effective way to help nurses and teachers get a stronger start?

And sometimes that’s when they have to start over again later in life. Sometimes that’s when they’re at university facing into placement poverty. And sometimes that’s when they’re early in their career in their first jobs and they want to go off and do something that there’s no money for, education or scholarships, etc. So there’s lots of different places where we try and fill that need, but in a lot of ways it’s exactly the same as why we started 50 something years ago.

Dexter Cousins
So obviously our lives have changed massively in the last 50 odd years, and particularly the way we bank. Branches have closed. We’re all banking now through smartphones. How does a mutual bank with 4.7 billion in assets compete with a big four bank who’s spending 4.7 billion on technology?

Michelle Bagnall
Short answer to that one, Dexter, is we don’t try to, mate. So we don’t try to build everything ourselves. Well, the reality of it is this is digital native, is where we’re at. So, we’re digital first, but human-centered. So, we are very, very passionate about our partnerships, and in other places you’d call them vendors. We partner with people who get what we’re about and who are actually in it for the mutual benefit. No pun there in mutual benefit, but who are actually in it for the mutual benefit of doing the right thing by nurses and teachers. So even the vendors that we choose, we treat like partnerships, and they are critical to who we are.

We’re super excited about the possibilities of AI to disrupt, because we want to hold the thing tight that means the most to us, which is purpose and humanity and the humans in this place. But actually everything else we hold fairly loosely, to be honest. So we’re not encumbered by legacy systems. We’re not encumbered by all of those things that, each time we make a decision. We often make decisions about what we’re letting go as much as what we’re building. And so we don’t try and compete on spending two billion on tech every year like some of the banks who shall remain nameless. We don’t do that, and we don’t do that deliberately, because the core question for us is, if it’s not going to differentiate us in the market with nurses and teachers, it’s not special.

Dexter Cousins
So then the other kind of, I guess, area where perhaps you’ve had some competition as well is on the neo bank side, and some have struggled but others have done really well. What lessons have you taken from some of the neo banks around how you’ve gone to build a digital native bank?

Michelle Bagnall
Look, first thing I’d say about that is, and this is going to sound counterintuitive as competitors, I actually really think we need to keep encouraging startups, challengers, innovators in Australia. So there’s a misnomer that there’s either listed banks or there’s fintech startup, and customer-owned sits in a place where we are challengers. We are challengers to the majority of the market. Listed major banks still have 85% of the market.

So there’s this challenger that sits in the middle that is regulated exactly the same way but driven from a purpose that is completely different. So we still have, we’re safe, strong bank, we have great offerings, but the way we make decisions is very, very different. And we talk about customer centricity. It’s real in these places. Like, it is the lifeblood of what makes member-owned banks real and meaningful.

Dexter Cousins
Kind of nice little, I guess, segue into what I wanted to chat with you about next, which is really about the culture and the leadership that you’re looking to impart in Bank First. And I thought what would be nice is maybe to talk about your background first, so we had some context as to where that came from. So talk me first of all, Michelle Bagnall, before banking, as a young woman, where did you kind of come from, and what was the upbringing that you had?

Michelle Bagnall
Was there life before banking, Dexter? I don’t know. I grew up in southwest Sydney, and for anybody from Sydney, that’s not the bit that the tourists go to see. So, it’s growing up in a place like that where we didn’t have a lot. The two things we mainly grew up with was, education was critical and education was your way out. And there was a lot of expectation around how you actually contribute back, and contribute back, yes, into the family life. So it was one of those situations with two parents who were working seven days a week, where we’re expected to look after ourselves and to get on with it and to do the housework and to contribute back into the family.

But they are also very community-centric, and it was, life is not just about you and about what you garner for yourself. Life is actually about the little bits that you leave behind around you that make other people’s lives a little bit better. And my memory is the house was always full of people. And no matter how much we never had, there was always enough for more people. And it was an abundance and a generosity of spirit and an absolute knowledge that money did not make you great. Money is not what life was about. And connections, relationships, being a decent human being, Dexter, to other human beings.

And I can remember my mother always used to say, “No matter how badly off we are, there’s always somebody worse off. So pull yourself up.” It was that piece around, life isn’t about how much you can garner just for yourself, and what are you going to leave behind you that makes other people feel like you’ve contributed something.

Dexter Cousins
Yeah. So despite that great upbringing you went into banking.

Michelle Bagnall
Yeah. Which is also funny. Dexter, do you know what? It’s so weird, because the other thing Kathleen always used to say to me was,

Dexter Cousins
Break it from the inside.

Michelle Bagnall
Oh my god. Kathleen used to always say never a borrower or lender be, and I ended up in banking. Like, god, get further away from it. So by accident actually, if I’m honest. So the beginnings of my career were in small business, and I didn’t do it the usual way, and I’m very overt when I talk to graduates and others about this. I didn’t go to uni straight out of school. I actually worked, and I went back to uni when I was 23, and I went back as a mature age student, and I felt really old at 23 going back to uni. And I worked full-time and did my business degree part-time, and worked a lot in small business, and probably the equivalent of startups in those first kind of five or six years of my career.

And then I landed at a mutual back in the 1990s. I landed at NRMA before it became IA, before they demutualised and listed. And that really was the foundation of, I suppose, this true understanding of, when you say you are customer focused, when you say you are member focused, the true test is in the boardroom. The true test is around the leadership table. The true test is where your capital goes and how you make decisions about where you’re allocating capital. So, it was quite foundational for me, those years at NRMA.

And then I decided I needed to go overseas to get a proper job in a proper bank. And I ended up in the UK at RBS in corporate banking and financial markets. And it wasn’t until I was about 33, I remember talking to an exec coach when I was 33 and I went, I’m 33, how did I end up in magic? Like, how did this happen? And that’s more than 20 years ago now. But it was one of those things where you accidentally find out what you’re good at. And so I accidentally found out I was really good at business banking and banking and decision making around commercial decisions and growing businesses, actually. Taking tough decisions around transformation and what we were willing to break, and preparing a business for growth, and then actually driving a business towards growth. They were the things I accidentally found out I was good at.

And the foundation stone though had never gone away. And so I went through listed banks, both in the UK and here in Australia. And there was always a feeling of disconnect. And that disconnect was a disconnect between what we said mattered and what actually mattered and the actions we took. And there was a lot of talk about customer, a lot of money spent on customer and marketing. But when the pinch point came, you knew what was really important in those places. And that doesn’t make them bad. It just makes them what they are. And we’ve seen that over the last 10 years through Hayne Royal Commission and all sorts of things, and the clarity that, yeah, you do have a purpose. You just don’t like saying what that purpose is. And that’s okay.

But it wasn’t until I landed in my first CEO gig back in mutuals, back in mutual banking, that I kind of walked in the front door of that place and went, “Oh god, I feel like I just got home.” Like, it was that sensation of arriving home. Yeah. And I sometimes still say, “How lovely is it to be able to do what I’m good at, which is banking and running a commercial business, in a place where I can sleep at night.”

Dexter Cousins
Yeah. Wow. There’s a few things that you’ve mentioned there that I want to talk about a little further, because they’re kind of recurrent themes in what I see, whether it’s somebody moving out of banking and they’re disillusioned, or whether it’s somebody that’s in fintech and they’re disillusioned as well. And the first thing that you talked about was kind of the accident of banking and finding what you were good at. And I obviously meet with a lot of people who are disengaged and looking for what’s next, and they’re all looking for this passion, that they think an employer has to give them purpose, or they have to be given a mission. And I think ultimately what ends up happening is you discover passion mainly through just being thrown into something and getting better at it and learning, and then you kind of become absorbed in it.

And I think this kind of external look for meaning and passion and mission is perhaps, I think, another of the things that you touched on, which is this lack of congruency between what you’re saying or your values on the wall and what your incentive structure is and the actions that you take. And when you combine those two things, what I see are a lot of people who kind of sign up for the what’s written on the wall, and hey, now you’ve given me a mission, and it’s never like that when they walk in the door.

Where I also see it becomes very difficult for people to fulfill their kind of meaningfulness in a role is when you have a structure where you’ve got, and I see this with startups all the time, right? When you’ve got your people and your customers, it’s easy, right? Like, it’s a lot easier because you know that you’re building for those people. Soon as investors come in, you get this love triangle that either your people or your customers are or bought them, right? But the investors never are. And so you can never ever truly, to your point, you can say you’re customer focused, but if you’re measured on shareholder returns, you’re not customer focused, you’re shareholder return focused, right? It doesn’t matter what you say, what you do, what advertising campaign, people see through it.

So I think it’s fantastic to hear you talk through that journey, because I think it’s the path that I see so many people kind of trying to find and trying to discover, and being sold the pitch when they go for an interview. And I say this a lot, right? I meet a lot of founders where, when they talk about changing the world, they’re talking about changing their world, not the world.

Michelle Bagnall
That’s so true. I look, Dexter, I just genuinely think people need to be honest with themselves about what matters to them, because actually, if you want the stuff and you need the stuff and you want the big office and you want the big bonuses, if you want all of the stuff, just be honest with yourself. That’s what you want. That’s what’s in there. And do you know what? Each to his own, right? If that’s what you want, go for your life. But the truism in the places where that’s possible is that it’s the old rule of the triangle, right? Only two sides of the triangle can win. So if your investors are winning and you want your people to win, somebody has to suffer.

Dexter Cousins
And that’s generally the customer, right?

Michelle Bagnall
It’s like the old, I’m an old credit risk person, Dexter, and the old principle of credit risk, lending volumes and margin, you can only have two out of that three at any point in time. So that’s the truism. Be honest with yourself about what really matters to you.

And what I found working in this place, and kind of the culture that we’ve created here, it’s not for everyone, by the way. So I don’t sell it as an aspirational state for everyone. It’s not for everyone. If you need the stuff, if you need the status, if you need all of that stuff, this isn’t the place for you. So people who come here, and there’s quite a lot of people who have come here, are hugely talented. We punch above our weight in talent, but they felt kind of disconnected in those other places and they couldn’t quite work it out. And quite a number of them have said to me, I swore I was never going to work in banking ever again. And here they are.

And they’re back in banking, but it’s so connected to what matters to them and why they want to get out of bed in the morning that actually it doesn’t feel like banking. It feels like a purpose-driven organization for nurses and teachers that happens to thrive off, or happens to be funded by, banking. So, that’s the other thing that’s important about this place. It’s not not for profit. We’re not not for profit. We’re for profit for purpose. But we’re really clear about that. The more successful we are, the more we invest back in nurses and teachers.

Dexter Cousins
Yeah. And I think one of the other things that I’ve noticed, particularly in this startup space over this last decade, is either this over inflation of their importance or this kind of grand dream that we’re going to solve world hunger with the blockchain. Any Aussie, right, anybody who’s here knows the impact that teachers and nurses have on their lives.

Michelle Bagnall
Oh, mate, you stand in any room. If I’m presenting to 300 in a room, first question I’ll start with is, who in this room has a nurse or a teacher in their lives that they give a damn about? I reckon 95% of hands go up.

Dexter Cousins
Yeah. I look at my own experience, right? And the teacher who said something, did something. I remember an art teacher turning around to me. I was, what, 14 or 15 years old. Bit like yourself, I came from a really tough background, single parent family, didn’t have anything, and he really gave me a lot of support. And I’d wanted to be a graphic designer, and he put a lot of time and investment in, and I asked him why once, and he said because it’s not just rich kids who should have education. And it was just something that, it becomes then a cornerstone of your principles and values as you grow and you go through life. And I think, yeah, it’s important that kids get an education, but I think what’s also important is the role that teachers play in inspiring our kids and pushing them to levels, and to be the human that they are as well.

Michelle Bagnall
It drives everything we do. That story you’ve just told about yourself, Dexter, is a story we hear over and over and over again. And it’s the reason why one of our charity partners is a charity partner called Pinchapoo, which is all about hygiene health. And Pinchapoo provide little hygiene packs to schools and hospital wards, because people turn up to hospital wards with nothing, and it’s the dignity that that nurse is able to give to that patient in giving them something. And the kid who turns up to school with clearly no access to hygiene products, the ability for the teacher to hand a little pack to that student.

Now what we discovered, one of the reasons why we fund it is, and Pinchapoo will tell you this every day of the week, teachers and nurses are buying this stuff out of their own money, because they give a damn about that kid, they give a damn about that patient. So actually, the small acts of what we are able to do, the small act that creates a huge impact. And we talk so much more about social impact than anything else in this place, because it’s the exponential impact.

Now the other place where we spend a lot of our money and give away a lot of our money is in scholarships. So scholarships for nurses and teachers for educational experiences they otherwise wouldn’t have. Now that has social impact that, we’re not doing it, but our money, our members’ money, is actually creating social impact. The school principal who we helped to fund to go to the Nordic countries to study food security in schools, and has started up a kitchen in her brand new school, where she’s the brand new principal, over the last two years. She actually has created food security across her community for the pupils who are at her school. They get every meal at the school. Whatever they want they get while they’re at that school.

And she talks to us about, it isn’t just about the food. Behaviors have changed. Educational results have changed. The parents are more engaged with the school. There is a deeper connection in the community because of what they’ve done with this food. So, it’s the impact, the social impact of what you can do by putting your money in the most important places.

Dexter Cousins
Now, we kind of talked about, I guess, at the beginning of the show, fintech being a force for good and kind of getting back to the origins. You’ve obviously given a lot of examples there as to how you’re helping the community, but we are at a point where cost of living has gone through the roof. From a product perspective, and I guess a strategy perspective, what is it that Bank First are looking to do in this next 5, 10 years to really help their members through this difficult period that doesn’t look like it’s going to let up anytime soon?

Michelle Bagnall
Yeah. Look, the very first thing I would say is we are absolutely profit for purpose, but we are not profit maximizers. So really very overtly I say to people, nobody at this bank gets paid a bonus. Nobody. So there is no benefit to me or any other person in this bank maximizing our profit for our own interest. It just doesn’t exist. So when we think about how we use our profits, it’s actually in how do you make sure that you’re priced fairly, because yeah, we’re still a regulated bank, but making sure that we’re priced fairly, that there is absolutely no fee or charge where there does not need to be. Where you show up when people need it the most.

And I think this is probably the biggest difference. But I’m talking about general population now, Dexter. So all of our members, not necessarily just nurses and teachers. I’ll talk about that in a second. But general population of our banking members, the real difference shows up in the compassion. So when hard times here, we stay with you longer and we work with you more closely. And we are not about looking after the bank at your expense. So yes, we’re regulated. Yes, we have to make sure we’re safe. Yes, we have to look after our capital. But actually, we make decisions anchored in compassion as well.

So there’s a difference on that side, and you’ll hear that story over and over again from customer-owned banks right across Australia. The difference is we make decisions on compassion and care for the community. And the other thing is, from a credit risk perspective, great looking books, because we stay close to our members, we stay close to our customers.

Now on the nursing and teaching side, we will do things for nurses and teachers that we won’t do for others. And what do I mean by that? Like any other bank, we have leeway to make exceptions and to do things for individuals when we need to. We save that and we keep our powder dry for nurses and teachers. So you look at a nurse who’s working for three different health care providers. That nurse comes to get a loan, and because they’re working for three different health care providers and they’re not considered as working full-time for any, other banks look at that and go, “Well, that’s not full income.” We don’t treat them that way.

There’s just things like that that are practical in the moment, around, we see you. We see what’s going on for you. The casualization of the workforce in nursing and teaching is a big deal, because it actually changes the structures around them and what they can get access to. So, that’s a big thing for us. How do we actually design our products and services around them and about helping them get in faster? And hopefully some of these changes, I know there’s lots of issues and things still to be worked out around some of these changes, but actually hopefully it does solve some of the stock problem for first home buyers.

Because that’s the place where we want to help them, and we are already helping them disproportionately for nurses and teachers. It’s first home buyers. And how do we help them get in and live where their life is going to be a little bit better? Because the biggest issue that we’ve got in this country is affordable housing for essential workers in the places where people like you and me need them, Dexter. We need them to live near these hospitals. We need them to teach our kids. We need them to be in these places. They can’t afford to live there.

Dexter Cousins
Yeah. Look, listening to you, it’s kind of incredible, to be honest, Michelle. And why I say that is, I think for the last 10 years I’ve been talking about credit risk frameworks and how they’re just irrelevant, right? And I’ve done a lot of research around things like the gig economy, the nature of work and how it’s changing, and what you’re talking about is the forerunner of how it will be for everybody. And yet we’ve still got people being assessed on credit risk frameworks that were created before I was born.

Michelle Bagnall
I think the critical difference is, and I think about the work that we’re doing in affordable housing at the moment, we’re not doing it alone. We’re doing it with a coalition of the willing. And some of those partners are Common Equity Housing Limited, SGS research, like there’s a whole range, but BCCM, the Business Council of Co-operatives and Mutuals. Melina Morrison, who’s the CEO there, is an absolute powerhouse of passion for solving this problem, but solving the problem not on our own, solving it collectively.

And I look at the work that my CFO and treasurer is doing in that space at the moment, in that kind of coalition. There are other customer-owned banks in there, and we are partnering like we’re best mates on this, because this is not a problem that somebody can solve on their own. You absolutely have to be willing to play your part, and whether that’s the initial capital investment to build the stock, or whether that’s the ongoing funding that goes in the back end of it. So there are points in that value chain where we’re looking right across it going, we can’t solve it on our own. How do we play our part? And how do we make sure that the voices of nurses and teachers are in that conversation? Where do they need that affordable housing to be built? You’re going to build a new hospital, you have to be thinking about the affordable housing in the local area. And if that’s not a state government initiative, how are we engaging local government?

Dexter Cousins
It’s a real thing, right? And I think just what you shared, Michelle, is actually shared, I think, by pretty much every person that I’ve spoken to who is involved in this problem set. Is, I don’t have the answer. We are coming at it from this specific angle. There’s 101, if not way more, ways of which we can fix these problems. But we have to accept, first of all, that it’s highly complex. It’s multi-tiered. It’s multi-layered. And anybody who says I have the solution, I think you need to avoid them. And as you’ve said, everybody needs to collaborate and get together.

And if I do have a frustration, I think, with what I’ve seen over this last 10 years, is this is an existential crisis that has been put in the hands of some willing founders who are putting everything at risk and aren’t getting any support. If anything, they’re getting roadblock after roadblock put in front of them, through regulators, through government, through legislation. And it’s just so frustrating to see not just the wastage, but I think the kind of hubris as well that goes on with it, when really we need to be just fixing the problem and sorting it out.

Michelle Bagnall
And one of the key pieces, when you start to talk to people who say, “Yeah, yeah, I want to help solve that problem,” you then start to unpick their appetite for how long they want to be in that problem. And the timeline in their mind for how quickly they’re going to make a return and get out and get whole and out again. And the kind of problems we’re talking about, affordable housing in this country, care in the community, the water problem, the resource and energy, etc., they’re not short-term problems. They’re problems that actually need long-term thinking and long-term commitment.

And this is where, fundamentally, the way that mutuals and co-ops are structured, I don’t need to get a quarterly return. Now I need to get our return at some point, because I need to look after the sustainability of the bank on behalf of the members and the security of the banking system. But I don’t need a quarterly return. I don’t even need an annual return. We just need to make sure we’re doing the right thing longer term, that actually gets the outcome that we’re driving to and makes everybody a little bit better off from a social impact point of view. Again, we talked about this with individuals wanting to come into spaces like this. Think about what’s important to you. Think about what really matters to you. And if that’s a short-term return, don’t try and solve a long-term problem.

Dexter Cousins
Michelle, we get a lot of people, highly talented, who listen to the show, who are probably listening thinking, “Wow, I’d love to be part of this journey.” Where can they find out more about careers?

Michelle Bagnall
So come and check out our socials. We’re on all the platforms. But we had a lot of content that’s not necessarily bank related. It’s more telling the story of our social impact for nurses and teachers. So come and have a look at that content. The other thing is we are actually working with Dexter to recruit a brand new role, which is a chief product officer role. So reach out to Dexter if you’re interested in talking to us, and Tier One. We are really excited about this role, for the way it’s going to challenge us to the next place of social impact for this place, and really showing up for nurses and teachers in a way that is different and meaningful and going to have real impact. So yeah, be great.

Dexter Cousins
And I just want to say as well, really delighted to be working with you on this, Michelle. I mean, just an incredible story. Everything that Bank First stands for is why I’m passionate about fintech, which is to create a fairer financial system. It ain’t about technology. It ain’t about AI. It’s not about cute CX. It’s about all of the things that you’ve talked about today so passionately, and that you’re doing and living every day of the week.

Michelle Bagnall
Thanks, Dexter.

Dexter Cousins
Now, the other thing as well is, obviously everybody listening here has a bank account. If they’re fed up with giving money to shareholders and they want a better purpose for their savings and their hard-earned cash, where can people find out more about becoming a Bank First member?

Michelle Bagnall
Mate, come to bankfirst.com.au on here and actually open a bank account remotely, self-service, and then give me your feedback, cuz I want to know what you thought of the experience. You can reach me on LinkedIn anywhere, but if you open a bank account with Bank First and you want to give me feedback, I’d love to hear it.

The other thing I would say is, I go to a lot of barbecues and a lot of drinks and dinners and whatever, when people don’t have nice things to say about their banks, Dexter, and the first thing they say is, “But all the banks are all the same.” They’re not. They’re really not. And it’s worth the effort. It’s worth the effort of putting your money with, whether it’s our bank or another customer-owned bank, that your money is going to be used for community and doing social good. So yeah, it’s worth it.

Dexter Cousins
Brilliant. Appreciate you sharing the journey. It’s been fantastic to have you on. As always, folks, you can connect with me on LinkedIn. If you are coming back, thanks so much for your support. And if you’re new to the show, make sure you follow us and leave a review. Until the next episode, be good.