Bank on strategic movement at Fahour's new post

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This was published 14 years ago

Bank on strategic movement at Fahour's new post

By Danny John

Australia Post's new boss will not sit on his hands.

AMID all the talk about a ''People's Bank'' and the possible involvement of the country's postal network in such a proposal, Australia Post is facing a real challenge in deciding what sort of business it will be within the next 10 years.

While it is a publicly owned corporation and a monopoly supplier in its key operation of delivering letters, it should be remembered that Australia Post is no stranger to competition.

From its humble beginnings 200 years ago, Australia Post is a retailer, a courier service, an express post deliverer and a mover of millions of parcels each year - all areas where it comes up against private rivals; although it has a big advantage due to its heritage and infrastructure.

But although it has managed to maintain its market position, there are signs that technology is slowly eroding its core franchise - the mail. Email, of course, has had an impact; but that has been gradual given that it's been around as a mass-consumer tool for more than 10 years. And the effect on Australia Post seems to have been to slow its growth rather than to send it into inexorable decline.

But the use of the next phase of technology, particularly mobile devices, will see the rot truly set in.

The more people who use Facebook, Twitter, SMS and presumably iSlate (the next must-have Apple product), the less likely they are to put pen to paper, queue up at a counter to buy a stamp and drop the packaged item into a postbox.

If that doesn't sound like a quaint, old-fashioned form of communication now, it soon will.

Businesses are constantly looking at ways of saving money and anything that can be sent digitally is and the trend will only grow. You only have to look at your pigeon hole at work to know how little information is now sent out in the traditional way.

But it's not only companies that are cutting back. Think also how many Christmas cards you sent this year. Fewer than last year? More than likely; and almost certainly replaced by those all-singing - and all-dancing - electronic cards that the consumers of tomorrow just love to open by clicking a button.

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This indicates that Australia Post is facing structural change - rather than a temporary, cyclical one - which will require it to come up with a strategic answer rather than just a tactical solution.

Step forward Ahmed Fahour, the newly appointed chief executive of Australia Post whose background is in planning and change management (through his time at Boston Consulting) and banking (both investment and retail) at Citigroup and NAB.

Given his pedigree, you can bet Fahour has not taken the job just to run 4433 post offices. His job will be to secure the corporation's future, make better use of its huge retail network and avoid at all costs (primarily political and consumer) closing any one of those outlets.

How could he do that? By developing its basic bill-paying, insurance and minor banking services and turning Australia Post into a specialist retail bank and thereby creating a publicly owned challenger to the big four.

So, watch out for the following moves involving Australia Post over the next two years:

-The Rudd Government's election pitch to break up the big four's oligopoly.

-An application for a deposit-taking licence and Bank@Post shedding its agency status as a conduit for other banks.

-A joint venture or formal arrangement with an authorised bank, almost certainly an overseas institution - from the US, Britain or Hong Kong, for instance - to provide the necessary expertise and support to set up a retail banking business

-The use of the Government's AAA credit rating to raise funds for products such as home and personal loans.

-An online banking division with a catchy name.

Not all of these may happen but you can bet Fahour is thinking about them.

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