Keeping Pace with Performance: Rethinking Revenue in Mutual Banking

This is the second blog in our three-part series addressing the cost-to-income (CTI) challenge facing Mutual Banks in Australia. In our first post, we explored the strategic urgency of the CTI ratio. Today, we turn our attention to the revenue side of the equation—and how Mutual Banks can unlock new growth without compromising their Member-first ethos. 

The revenue challenge: more than just margin 

Revenue generation in Mutual Banking has traditionally been conservative – anchored in home lending, deposit products, and a narrow suite of services offered to a confined geographical or industry aligned audience. But in today’s environment, this model is under strain. With rising costs and limited pricing flexibility, Mutual Banks must find new ways to grow. 

This is not just about selling more—it’s about reimagining the value proposition and being laser focused on who we are serving. 

Three strategic levers for revenue growth 

1. Product Innovation and Diversification

• Mutuals must ask: Are our products solving today’s member problems? There is opportunity to expand and embed adjacent propositions – such as financial wellness tools, protection/ insurance, and embedded finance partnerships that align with Member needs and generate fee-based income.
• Bundling and tiered offerings can also help drive deeper engagement and wallet share.

2. Pricing Strategy and Margin Management

• Many Mutuals have historically priced for fairness, not competitiveness. But with margin compression, a more sophisticated pricing strategy is needed.
• This includes dynamic pricing models, risk-based pricing, and better segmentation to ensure pricing reflects the value delivered.

3. Digital Distribution and Member Engagement

• Revenue is not just about products—it’s about access. Digital channels must be optimised not only for service but for growth.
• Mutuals should invest in CRM, data analytics, and Member journey mapping to identify cross-sell opportunities and improve conversion (more on this in the next blog).

A mindset shift: from passive to proactive

Mutual Banks often pride themselves on Member loyalty. But loyalty alone won’t drive growth. In fact, perversely, examples of strongly loyal Members but less competitive products can actually result in a materially negative overall impact for the Mutual where they are used as a secondary Bank only – with the higher value services going to larger peers (i.e. cash processing and ‘shop front’ retained by the Mutual Bank and the mortgage going to the larger peer).

Banks must shift from a passive service model to a proactive engagement model—one that anticipates Member needs and delivers value before it’s asked for.

This requires investment in data, technology, and capability—but also a cultural shift in how revenue is viewed. It’s not a dirty word. It’s the fuel that sustains purpose.

How we help 

As trusted advisors to Mutual Banks, we support revenue transformation through:

• Confidence on ‘where to play’ – strategic product reviews and market scans
• Practical steps on ‘how to win’ – pricing diagnostics and margin modelling
• Understanding your Members – channel optimisation and Member analytics
• Enhancing execution – capability uplift across sales, marketing, and product teams

Looking ahead

In our next and final post, we’ll tackle the cost challenge—exploring how Mutual Banks can streamline operations, modernise infrastructure, and reduce structural inefficiencies without losing their community soul.

The CTI ratio is a two-sided problem. Revenue is half the story. Let’s make sure it’s a story of growth.