In a drive to deliver greater efficiencies in managing property assets, Australia's top four banks have shared their property asset management data in Turner & Townsend's
The anonymous survey is the first of its kind in Australia and interviewed property leaders across Australia from National Australia Bank, CommBank, ANZ and Westpac. This collaborative data has been shared with all participants to help them shape future strategic planning and asset allocation .
The banking benchmark survey analyses high level areas of capital program delivery including approach to design, program planning and costs.
Director of Consulting at Turner & Townsend Jon Poore said, "The survey highlighted that there is a large variance in how banks approach capital program delivery, cost reduction and expenditure on internal fit-outs of their retail branch network. Property seemed to have a different role to play depending on the bank with some institutions taking a proactive approach to asset planning whereas others were more reactive to changing customer demands.”
The survey found that the expenditure on new stores varied significantly with one spending over 25 per cent on its annual capital expenditure on unplanned work, while another spent 5 per cent. It also showed there was a similar spend by all banks on building works and security, however fitments, services and consultant fees varied by hundreds of thousands of dollars per project.
The variation in the front of house area for each member of retail staff reflected that some banks are already moving towards a self-service format although there are differences in how banks count staff. The number of staff per square metre of retail space varied from six to eleven for a full service store; highlighting a different approach to customer service and subsequent store format.
[urbanRelatedPost][/urbanRelatedPost]"Based on the survey research and our experience, I would estimate that savings of between 10 to 15 per cent per annum are realistic targets if appropriate program, design and procurement strategies were put in place. These savings have the potential to run into millions of dollars across the banking sector," Mr Poore said.
There are approximately 6,000 bank stores across Australia and refurbishments generally happening within a 10 year period. Approximately 600 refurbishments, new stores or relocation projects occur every year costing up to $1.5 million for a full service store.
"Two areas where savings could be found include introducing design standards aligned to the bank’s brand that are value-engineered to cost effective materials and procured to obtain the best market rates.
"The second area is having a solid long term plan for projects which unlocks bulk procurement opportunities and avoids unnecessary costs," Mr Poore said.
"One priority for property teams is to focus on better alignment with corporate strategy and to develop a responsive asset strategy that delivers bank objectives and shareholder returns. The objectives vary from bank to bank and could include to be an accessible bank located in prime city locations, a friendly bank with extra staff or digital bank with a limited number of branches.
"The brand strategy will help dictate where to place capital for the greatest return," he said.
"Each year banks spend millions of dollars on renovating, relocating and purchasing property assets. Property is one of the greatest assets any bank has and needs to be managed accordingly with a long term strategy. A simple and clear framework needs to be adopted in conjunction with the corporate team’s objectives to ensure the greatest cost savings and efficiencies can be realised."
View the Retail Bank Benchmarking Survey 2015 here.