Lindley Edwards, Chair of the Xinja board, has extensive banking experience (Associate Director at Macquarie, Vice President at Citibank) but we asked her a few questions about her work in financial literacy in developing countries, what we can apply in Australia to change attitudes & practices around money, and why Xinja.
"Xinja is an opportunity to totally reinvent the banking experience"
Tell us a bit about your work with the Grameen Foundation & the National Bank of Vanuatu - what does it achieve, and what did you learn along the way?
There is always so much to learn from people that have not had the privileges we have in Australia. Many years ago I read a book by Grameen founder Professor Yunus, called "Banker to the Poor - The Grameen Story". I was struck by Professor Yunus' identification of skills and assets that people with less financial wealth had to offer the world. These included amongst other things listening skills, memory skills (many are part of oral cultures), survival and community skills which allowed the economical use of collective and individual assets and energy, good resource utilisation, where every material object, every resource available is explored, and a high degree of sharing of tasks and benefits. I find these skills and others in abundance in the work I am privileged to be part of in the region.
Both National Bank of Vanuatu (NBV) and Grameen Australia (Philippines initiative) have financial literacy programs as part of the banking/credit providing platforms. Both organisations get borrowers to open savings accounts and teach the power and impact of compound interest in growing savings. The NBV savings products include Mekem Gro (Make your money Grow) and Savem Vatu (Save your Vatu). In the Philippines when women get their ATM card they have been wearing it proudly on a lanyard as this is their first access to a financial system and savings accounts.
In both organisations literacy programs the emphasis is not only on financial aspects of banking, borrowing and saving but on business creation and business knowledge. In these countries people often have to create their own jobs and therefore they need and get more training around all aspects of business.
All training programs are delivered in communities, in ways that make sense to the audience receiving the information. Often people will attend the same training module more than once to really understand it. Language and descriptions are very literal so that everyone can understand the concepts and be empowered to act. They learn that change happens by serious of small steps that are repeated and importantly they also learn together as a community.
In regard to impact, the savings rates as a result of both initiatives are very impressive. The level of loan defaults are low. The level of community engagement amongst the businesses with people supporting each other is amazing to witness. Job creation, improvements in health, well being, economic improvements of individuals, families, communities and regions can be demonstrated.
"If people with a lot less advantages than we have can significantly improve their financial health, in reasonably short time frames, then so can we."
I am also continually asking how can I take some of the skills and assets that people I am working with in these countries and programs and apply to my life. Currently I am reading a book written by some Australians with a permaculture background called "The Art of Frugal Hedonism - the Art of Spending Less but Enjoying Everything More" by Annie Raser-Rowland and Adam Grubb . I recommend it as it asks some interesting questions that we could all pose to ourselves - what truly makes us happy? The documentary on "Minimalism" is also worth watching. (After watching this my partner disagreed with my comment that I was a minimalist, pointing out all the things/stuff I have. My response is that I am an extravagant minimalist and I did chose not to point out that he usually benefits from the use of such stuff).
Both Grameen and NBV have highlighted to me the need for simple understandable language that avoids jargon and links into the everyday experience of the participant. Financial services in Australia is full of jargon and probably the easiest thing to understand in all the materials received when opening accounts or taking out loans is the level of fees and charges.
"Financial services in Australia is full of jargon"
So how can we apply these learnings to Australia - what do you think we need to do here?
I think that we all need help and good structures/processes to get our financial affairs in order, no matter if we have a small or a large income. Well managed financial affairs do not just mean we should be focused on having enough superannuation to live on when we retire or creating a savings buffer for unexpected bills or events, but mean that we have created financial space to enjoy life and can be free from financial worry.
Studies show that whilst the average person in a developed economy earns more, they spend a lot more, and as our income increases so do our expenses. We are all continually pushed messages to consume more across all our devices and in the media- we can never be enough, have enough, unless we consume. We are also time poor so we spend money that we wouldn't if we had more time - fast food, convenience items- engaging in compensatory spending when we feel stressed. In addition the increase in housing prices in Australia has meant higher mortgages, and the increasing value of property adds extra cost layers and expense into goods and services we buy.
Both increasing housing/property costs and our high consumption contribute to what recent research is showing, which is that the average Australian has more personal debt and less savings than ever before.
Of course we need debt to buy larger investments that build a platform of wealth for ourselves, our families and communities. However, too much debt, not having enough money or savings to meet not only our expenses but to give us space and time drains our energy and takes all the joy out of life. We can feel like the hamster on the treadmill.
Money is a difficult area for most of us and we all have areas where we could adapt and modify our habits and behaviours to get better short term and longer term benefits. Financial literacy, engagement and gamification to help you improve your financial well being will be encouraged and promoted by Xinja. This will be about creating understanding of what are the impacts of our choices and how we can do certain things that will provide short and longer term rewards and optimise not only our financial position but be a positive for our overall lives. Our strong view is that none of us should despair about our financial affairs now or in the future, because we can all do some simple and straightforward things that will help us now and later on.
"Financial space to enjoy life..free from financial worry"
So why Xinja for you - and how will it contribute?
The biggest contribution that Xinja can make in my opinion, is to make all of us more financially astute and provide a means for concrete and tangible steps that we can take to create better financial outcomes for ourselves. Much of the messaging around money is fear based - we don't have enough, we will not have enough. That is really scary in a world that money is key as money is the lubricant for all kinds of material interchanges in our lives and is needed for us to live.
If Xinja creates people-centred products and services that get good outcomes for our customers and help them feel more financially secure and free then we would have achieved something special. Whilst Xinja is a for profit business, we are all well aware and conscious that banks rely on the goodwill of the whole community and I know the team at Xinja is committed to being a good corporate citizen and participant. Eric [Wilson our CEO!] is leading this, in bringing back old fashioned but enduring banking and finance values and marrying this with the latest technologies and approaches.
We are all committed to shared value as the underlying business strategy. This is where genuine win-wins are created, where stakeholders, customers and Xinja receive meaningful benefits and value by being in business together.
"We are all committed to shared value as the underlying business strategy"
I started my career in financial services in a country bank branch of a small regional bank and have worked in retail, corporate and investment banking both for local and international groups.
I see that Xinja is an opportunity to totally reinvent the banking experience and associated services for Australians without having to deal with legacy issues.
This makes Xinja open and willing to do product and service innovation. We are creating a new form of bank that serves the needs of its customers in a way that looks with fresh eyes at what customers need and want, whilst complying with the important and necessary prudential rules and regulations. We all think that the time is ripe for this to occur.
Eric Wilson has assembled a first rate team with extensive banking, technology and design expertise who all are committed to the vision of the reinvention of the banking experience.
So of course all of this made joining the Xinja board incredibly attractive and it feels like my banking career has come full circle!
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