Monday, January 11, 2010

"Imagine if in every post office you could find a dedicated professional who would have the capacity to offer you non-commission-based finance"

Watch Australia Post in 2010

Its new head Ahmed Fahour used to run the Australian operations of NAB.

Christopher Joye outlines what to expect - real soon.

"Ahmed Fahour could secure his first banking mandate in rural Australia. This would also provide Kevin Rudd and Wayne Swan with a powerful political wedge. The Nationals would find it impossible to oppose empowering Australia Post to deliver banking services to their constituencies. At the same time, the 'dry' faction of the Liberal Party would presumably be opposed to any form of state intervention in the banking sector even though such opposition would be based on an ideological fiction (the fact is that the state already underwrites much of the industry). In short, this would be a policy that would either cleave the Coalition in two, or represent something they'd be forced to embrace if the ‘dries’ were rolled.

... Aussie Post is effectively a monopoly in decline. Standard mail is a thing of the past. So the main test facing our chief postie, Mr Fahour, is how to reinvigorate the franchise while avoiding the adverse political spectre of closing non-economic post-offices.

...Australia Post has the one thing that many smaller lenders do not: an extraordinarily strong national branch network. With over 4,000 outlets nationwide they have a distribution capability comparable to the majors....

Imagine if in every post office you could find a dedicated professional who would have the capacity to offer you non-commission-based finance on behalf of the smaller banks, building societies and non-banks. Aussie Post could remunerate these professionals on a time-basis and avoid some of the conflicts associated with mortgage brokers. Concurrently, they could negotiate at the corporate level very lucrative distribution deals with all the non-major lenders in Australia on a volume basis. In time, it is easy to imagine this service being expanded to other staple products: for example, various forms of insurance, Australian government bonds, superannuation, and so on.

At the very least, this should be some food for Mr Fahour’s thoughts.

It's worth reading the whole thing.

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