Australians have spoken and they want a better bank. Here’s why customer owned banks are becoming an increasingly popular alternative to the Big 4.

While the Banking Royal Commission revealed Australia’s biggest banks haven’t exactly been giving customers a fair go, it’s not all bad news from the financial services sector. Amid the noise and headlines, customer owned banks have increasingly emerged as a trustworthy alternative to the big 4 banks.

They answer to customers, not shareholders

Customer owned banks aren’t publicly listed companies. This means they don’t have to chase profits to pay shareholders. Every customer has a stake in the bank and has the opportunity to vote in the governance process if they want to.

Profits are put back into the business, with a focus on providing superior customer service and more competitive rates for mortgages, personal loans, credit cards, savings accounts, and term deposits.

Ethical banking

Most customer-owned banks subscribe to the Customer Owned Banking Code of Practice, which means they formally agree to be bound by the Code in their dealings with their customers. A copy of the Code can be found here.

Being focused on customers rather than answering to external shareholders means customer owned banks, which include building societies, credit unions and mutual banks, are able to stick to a few golden rules.

  • Fair and ethical banking – they care about where they invest.
  • Customer focused – the customers essentially own the bank, so they’re put first.
  • Responsible lending – they make sure that the customers they lend to, can afford to pay it back.
  • Community support –customer owned banks have a strong track record of rolling up their sleeves to help the communities their customers live in.

They’re profitable and a safe place for your money

According to the Customer Owned Banking Association (COBA), in 2016, customer owned banks in Australia held 10 per cent of household deposits. “If Australians want banking that’s truly focused on people,” said COBA CEO Michael Lawrence, “the customer owner banking model] has been operating in Australia for more than 70 years.”

“The customer owned banking sector is profitable and has more than $111 billion in assets” he added. “We’re focused on delivering for the 4 million Australians and local communities we already serve and expanding beyond that.”

What does this mean for Qudos Bank?

Being a Code subscriber, Qudos Bank makes 10 key promises:

  1. Fair and ethical dealings with customers
  2. Focus on customers
  3. Provide clear information about products and services
  4. Responsible lending
  5. High customer service
  6. Deal fairly with complaints
  7. Recognise customers’ rights as owners
  8. Comply with legal and industry obligations
  9. Recognise our impact on the community
  10. Support and promote this Code of Practice

Customer owned banks are not only winning customers, but awards as well.

In 2018, Mozo awarded Qudos Bank Australia’s Best Small Bank based on “an excellent range of great value home loans, as well as ranking well among other product areas over the past 12 months. They outranked every other small bank as well as almost all of the larger ones, proving that bigger isn’t always better.”

And that’s good news for everyone.


Qudos Mutual Limited trading as Qudos Bank ABN 53 087 650 557 AFSL/Australian Credit Licence 238 305. The information in this article is of a general nature and has been prepared without considering your objectives, financial situation or needs. Before acting on the information, consider its appropriateness to your circumstances.

You should read and consider the relevant Terms and Conditions and our Financial Services Guide available on our website, before deciding whether to obtain any of our financial products or services.

Published May 2019