A network CEO has decried the new Commonwealth Bank deal with :Different, warning business owners and property managers that they could soon be facing competition issues.
Speaking on a recent episode of The WIRE, Stockdale & Leggo CEO Charlotte Pascoe said that Commonwealth Bank’s x15ventures is “well within their rights” to invest wherever they so please, but it does have the potential to be considered a massive conflict for the real estate industry.
REB first reported on the Commonwealth Bank of Australia’s (CBA) strategic partnership with :Different back in September, which coincided with a $25 million capital raise made possible by CBA’s venture-scaling entity, x15ventures and Antler.
At the time, the bank said the partnership was designed to extend the group’s capabilities around an end-to-end digital home buying solution.
Ms Pascoe first voiced her concerns earlier this month to the AFR.
Reflecting on the issue again on The WIRE, the CEO flagged to Sadhana Smiles that “now, what will happen, is anyone who is a Commonwealth Bank client – if you’re an investor, if you’re looking at buying a home, refinancing – any of those people who do any banking with Commonwealth Bank will now be approached by them to transition their property, effectively”.
“Let’s break it down for what it is. They’re going to try and poach the clients and say, ‘come and transfer the property to :Different’.”
For Ms Pascoe, her major concern is around the unjust competition this deal could create.
“What I see being a major issue with all of this is you can’t claim to be supporting this industry, but being in the industry in direct competition with everybody that you’re claiming to support.
“The biggest issue here for me is that Commonwealth Bank have now decided that they are in competition with us. They’re investing in a company; they are supporting a company, which means as far as I’m concerned, if you are supporting them, you can’t be supporting everyone else in the industry.”
The CEO is calling on the big four bank to “call it what it is”.
She said agencies who are referring banking business to CBA need to know “if you give me your referral, if I’m looking after your investors, finances or whatever it might be, I’m going to be approaching them and telling them to transition it out of you”.
And with so many agents having a relationship with a bank that’s across the road and they refer to each other, Ms Pascoe is urging agencies to reconsider that relationship.
“If you have any dealings with Commonwealth Bank, stop, because Commonwealth Bank will take your money on one end, and then they’ll take your client on the other end.”
Since initially voicing her concerns, the Stockdale & Leggo CEO said she’s had a number of different organisations approach her to say they have made their decision to switch banks as a result of the deal.
Telling listeners she’s “on a bit of a mission to educate the industry”, Ms Pascoe said in the initial days after the deal was announced, the potential knock-on impacts it could have on the industry had gotten lost.
I don’t think anyone really sat down and went, “Well, hang on a second. What does that mean for the rest of the industry?”
Once they are aware of the potential issues, Ms Pascoe opined that whatever they do choose to do with that information is “fine”.
“If you want to keep supporting the Commonwealth Bank, go for it. But I think it’s important for people to understand that if any of your clients are banking with Commonwealth Bank, they will be approached to take their business from you and give it to :Different.”
You can listen to the full conversation with Charlotte Pascoe here.
ABOUT THE AUTHOR
Grace is a journalist across Momentum property and investment brands. Grace joined Momentum Media in 2018, bringing with her a Bachelor of Laws and a Bachelor of Communication (Journalism) from the University of Newcastle. She’s passionate about delivering easy to digest information and content relevant to her key audiences and stakeholders.