Bank of Melbourne – *Is* better banking closer?

Big news out of bankland this morning is the Westpac announcement that they will be resurrecting the Bank of Melbourne to replace St George’s presence in Melbourne.

The Bank of Melbourne brand has been absent from Victoria since 2004, following acquisition by Westpac in 1997. By relaunching this brand the Sydney based Westpac is making a strong statement of commitment into traditionally ANZ and NAB held retail and business heartland, investing not only in a widened branch network but also generated considerable investment basing head office in the Melbourne CBD.

“Our customers and the market have told us that they want a local bank, one that is really engaged in the local communities in which it operates,” Bank of Melbourne chief executive Scott Tanner said in a statement on Thursday.

Challenges ahead

The bank will leverage an existing (and considerable) branch network presently held through the St George brand. They have also committed to the opening of 14 new branches during 2011, including outlets in Fitzroy, Richmond, Carnegie and Melbourne CBD. Head office is tipped to be located in the Melbourne CBD, with rumor they have taken over the old ANZ office space at 530 Collins.

In a Tweet posted by the official @BankofMelb Twitter account, the bank states they hold ambition for the creation of “up to 800 news jobs in Victoria”. A lofty goal indeed, with the economy running near full-employment and significant skill shortages in the financial services sector.

While limited details have been released in regards to BoM’s service offering, a polished website and Facebook & Twitter presence from day one indicates at least someone within the business has considered the importance of engagement in the social media space. Hopefully this will extend as a customer service channel once the bank comes online.

Likewise, details on their internet banking capability remain closely guarded. It was be fantastic to think Westpac has made the investment in a built-from-the-ground-up online and mobile offering, but knowing how expensive an exercise such as this would be, not to mention the change management required for existing St George accounts holders, it seems more likely they are going to recycle large chunk of the current St George IB capability.

Better Banking is Closer™

Victoria has been in dire need of a real competitor to the NAB and ANZ in a few key product markets for a while now, but in the current landscape of desperate price-competition and product/service non-differentiation Bank of Melbourne will need to look outside the usual retail strategy of offering good branch service and keeping fees low if they hope to expand Westpac’s footprint.

(Re)Starting life as a fresh, unencumbered-by-legacy brand provides Bank of Melbourne the opportunity to attempt some cool – and hopefully radical – approaches to the traditional way of doing things.

Please Bank of Melbourne, we need more UBank and less NAB.

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