1 00:00:03,960 --> 00:00:06,810 Sean Aylmer: Welcome to the FEAR & GREED business interview. I'm Sean Aylmer. 2 00:00:06,930 --> 00:00:10,260 Sean Aylmer: Australia's banks each have their own reputations and their own 3 00:00:10,260 --> 00:00:13,590 Sean Aylmer: specialties. Commonwealth Bank, for example, has the largest share of 4 00:00:13,590 --> 00:00:17,009 Sean Aylmer: the home lending market. National Australia Bank has long been 5 00:00:17,010 --> 00:00:20,880 Sean Aylmer: known for its business banking and it's pushing hard into small 6 00:00:20,880 --> 00:00:24,570 Sean Aylmer: business. Today I wanted to talk to the person responsible 7 00:00:24,570 --> 00:00:26,700 Sean Aylmer: for that part of National Australia Bank to find out 8 00:00:26,700 --> 00:00:29,550 Sean Aylmer: why NAB out performs and what the bank is seeing 9 00:00:29,610 --> 00:00:33,690 Sean Aylmer: in that arena. Ana Marinkovic is the Executive General Manager, 10 00:00:33,690 --> 00:00:36,510 Sean Aylmer: small business bank at National Australia Bank. Anna, welcome to 11 00:00:36,510 --> 00:00:37,200 Sean Aylmer: FEAR & GREED. 12 00:00:37,440 --> 00:00:38,550 Ana Marinkovic: Thank you very much, Sean. 13 00:00:39,030 --> 00:00:41,400 Sean Aylmer: So how are small businesses faring right now? 14 00:00:42,150 --> 00:00:46,500 Ana Marinkovic: Look, it's very much a double speed economy that small 15 00:00:46,500 --> 00:00:50,400 Ana Marinkovic: businesses are operating in. We have about half of our 16 00:00:50,400 --> 00:00:56,040 Ana Marinkovic: small businesses doing extremely well, having adapted to the changing 17 00:00:56,460 --> 00:01:00,990 Ana Marinkovic: environment circumstances post Covid. And then we have another half 18 00:01:00,990 --> 00:01:05,730 Ana Marinkovic: of our portfolio where those businesses across the country require 19 00:01:06,150 --> 00:01:09,208 Ana Marinkovic: quite a bit of help and assistance to be able 20 00:01:09,209 --> 00:01:14,400 Ana Marinkovic: to continue to be sustainable. So whilst at NAB, we 21 00:01:14,670 --> 00:01:19,560 Ana Marinkovic: continue to support over 1. 1 million small business customers 22 00:01:19,890 --> 00:01:25,920 Ana Marinkovic: with 1600 dedicated staff across some 500 locations, we are 23 00:01:25,920 --> 00:01:29,430 Ana Marinkovic: lending at the moment some $ 1. 2 billion a month. 24 00:01:29,940 --> 00:01:34,380 Ana Marinkovic: We are also super conscious about the need to continue 25 00:01:34,380 --> 00:01:38,880 Ana Marinkovic: to support those customers that are finding it tough. And 26 00:01:39,150 --> 00:01:42,810 Ana Marinkovic: what we are seeing there is this continued pressure shown 27 00:01:42,959 --> 00:01:49,319 Ana Marinkovic: coming with higher inflation, interest rate increases, continuous labor shortages, 28 00:01:49,679 --> 00:01:54,959 Ana Marinkovic: as well as disrupted supply chains and ever increasing prices 29 00:01:55,230 --> 00:01:55,920 Ana Marinkovic: of inputs. 30 00:01:56,400 --> 00:02:00,719 Sean Aylmer: Okay. So if you've got sort of a split two 31 00:02:00,719 --> 00:02:05,820 Sean Aylmer: sector part of the small business economy, are there any traits 32 00:02:05,820 --> 00:02:09,930 Sean Aylmer: that are more common in the ones doing better or similarly more 33 00:02:09,930 --> 00:02:12,660 Sean Aylmer: traits common in the ones doing not so well? That 34 00:02:12,660 --> 00:02:15,660 Sean Aylmer: might be geographies, might be industry. What are you seeing? 35 00:02:16,530 --> 00:02:21,298 Ana Marinkovic: Look, what we are seeing is that essential services continue 36 00:02:21,299 --> 00:02:29,459 Ana Marinkovic: to do really well. However, travel, hospitality and discretionary type 37 00:02:29,610 --> 00:02:35,399 Ana Marinkovic: products and services are those that Australians are being a 38 00:02:35,400 --> 00:02:39,360 Ana Marinkovic: lot more considered when it comes to their spend. We 39 00:02:39,360 --> 00:02:44,669 Ana Marinkovic: know that groceries, petrol, mortgages, rent, electricity, gas, all of 40 00:02:44,669 --> 00:02:51,750 Ana Marinkovic: those items have gone up. So what we are seeing is that subsequently a 41 00:02:51,750 --> 00:02:56,700 Ana Marinkovic: whole lot of small businesses are seeing their revenues decrease 42 00:02:56,758 --> 00:02:57,389 Ana Marinkovic: as a result. 43 00:02:59,160 --> 00:03:03,480 Sean Aylmer: Okay. You mentioned a shortage of workers in that, that 44 00:03:03,480 --> 00:03:06,389 Sean Aylmer: is a big problem for small businesses at the moment? 45 00:03:07,020 --> 00:03:11,130 Ana Marinkovic: Certainly is, and it is one of the biggest concerns 46 00:03:11,550 --> 00:03:15,120 Ana Marinkovic: for small business owners. When we talk to them about 47 00:03:15,179 --> 00:03:19,650 Ana Marinkovic: the key challenges that they face, labor shortages tend to 48 00:03:19,650 --> 00:03:24,510 Ana Marinkovic: be in the top three. And whilst we have seen 49 00:03:24,510 --> 00:03:30,030 Ana Marinkovic: particularly in metro areas of Sydney, Melbourne, Brisbane, and Perth, 50 00:03:30,480 --> 00:03:35,220 Ana Marinkovic: while we've seen a level of easing with the incoming 51 00:03:35,430 --> 00:03:39,750 Ana Marinkovic: foreign students and opening up of our borders, regional and 52 00:03:39,750 --> 00:03:44,730 Ana Marinkovic: rural Australia continues to face into significant challenges in that 53 00:03:44,730 --> 00:03:50,940 Ana Marinkovic: space. I was visiting a customer in rural South Australia 54 00:03:50,940 --> 00:03:56,310 Ana Marinkovic: recently, a potato farm where they were paying $ 95 an 55 00:03:56,310 --> 00:04:02,040 Ana Marinkovic: hour for pickers. And that kind of tells you what 56 00:04:02,250 --> 00:04:06,809 Ana Marinkovic: these small business, small farmers, the choices that they have 57 00:04:06,809 --> 00:04:12,030 Ana Marinkovic: to make around, " Do I leave my produce to rot 58 00:04:12,750 --> 00:04:15,600 Ana Marinkovic: or do I pay to take it out and try 59 00:04:15,990 --> 00:04:19,140 Ana Marinkovic: to get some return on it?" So those are the real 60 00:04:19,380 --> 00:04:23,250 Ana Marinkovic: issues that I suppose don't get a lot of media 61 00:04:23,250 --> 00:04:28,619 Ana Marinkovic: coverage, but do impact a material number of small businesses 62 00:04:28,619 --> 00:04:29,130 Ana Marinkovic: out there. 63 00:04:29,730 --> 00:04:32,550 Sean Aylmer: We talk a lot about cyber risk at the moment 64 00:04:32,550 --> 00:04:35,549 Sean Aylmer: and we've seen it with Optus and Mandi Bank and 65 00:04:35,550 --> 00:04:39,420 Sean Aylmer: places like that. Is it something that small businesses, firstly 66 00:04:39,420 --> 00:04:42,810 Sean Aylmer: are aware of? And secondly, are they feeling the impact 67 00:04:42,900 --> 00:04:44,070 Sean Aylmer: of hackers at the moment? 68 00:04:44,759 --> 00:04:48,930 Ana Marinkovic: Absolutely. What our research shows is that three in 10 69 00:04:48,930 --> 00:04:53,640 Ana Marinkovic: Australian small businesses have experienced a cyber attack or a 70 00:04:53,640 --> 00:04:59,609 Ana Marinkovic: data breach, and losses on average are estimated at about $19, 71 00:04:59,670 --> 00:05:06,510 Ana Marinkovic: 000. So we are dedicating a great deal of resources 72 00:05:07,260 --> 00:05:10,860 Ana Marinkovic: to try to help out our customers deal with the cyber 73 00:05:10,860 --> 00:05:17,969 Ana Marinkovic: criminals. I think another issue for smaller businesses, smaller organizations 74 00:05:17,969 --> 00:05:21,659 Ana Marinkovic: is that they do not necessarily have the kind of 75 00:05:21,659 --> 00:05:28,710 Ana Marinkovic: IT and tech and risk management resources that larger organizations 76 00:05:28,710 --> 00:05:35,789 Ana Marinkovic: do. So keeping abreast of developments and educating themselves across 77 00:05:35,790 --> 00:05:40,319 Ana Marinkovic: the most common scams, which center around remote access scams 78 00:05:40,320 --> 00:05:44,400 Ana Marinkovic: and investment scams and romance scams and phishing, it is 79 00:05:44,400 --> 00:05:47,190 Ana Marinkovic: so important that that is top of mind for them. 80 00:05:47,670 --> 00:05:49,440 Sean Aylmer: Stay with me, Ana. We'll be back in a minute. 81 00:05:55,650 --> 00:05:59,369 Sean Aylmer: My guest this morning is Ana Marinkovic is the Executive General Manager, 82 00:05:59,369 --> 00:06:03,900 Sean Aylmer: small business bank at National Australia Bank. What's the prognosis 83 00:06:04,230 --> 00:06:07,470 Sean Aylmer: for the small business sector over the next 12 months 84 00:06:07,470 --> 00:06:09,839 Sean Aylmer: to 18 months? With a bit of luck, inflation has 85 00:06:09,839 --> 00:06:13,380 Sean Aylmer: peaked, interest rate hikes there may be another one in 86 00:06:13,410 --> 00:06:16,320 Sean Aylmer: offering, but we're kind of getting towards the top. Do 87 00:06:16,320 --> 00:06:19,200 Sean Aylmer: things look better for the sector in the next 1, 88 00:06:19,200 --> 00:06:20,100 Sean Aylmer: 2, 3 years? 89 00:06:20,850 --> 00:06:24,390 Ana Marinkovic: Look, in the immediate term, 2024 is going to be 90 00:06:24,390 --> 00:06:28,260 Ana Marinkovic: harder. We see that many Australians are under increased financial 91 00:06:28,260 --> 00:06:33,029 Ana Marinkovic: pressures, and whilst we do remain optimistic, we have one 92 00:06:33,029 --> 00:06:37,230 Ana Marinkovic: of the best performing economies in the world in spite 93 00:06:37,230 --> 00:06:40,470 Ana Marinkovic: of these challenges. We do have to be congruent to 94 00:06:40,470 --> 00:06:42,450 Ana Marinkovic: the fact that there are a lot of families out 95 00:06:42,690 --> 00:06:46,710 Ana Marinkovic: there that are finding it tough. What that also means is 96 00:06:46,889 --> 00:06:52,199 Ana Marinkovic: that customers are changing their behavior. They are making considered 97 00:06:52,199 --> 00:06:55,890 Ana Marinkovic: changes to their spending and that of course has a flow 98 00:06:55,890 --> 00:06:58,560 Ana Marinkovic: through to many of our small business customers in particular, 99 00:06:58,560 --> 00:07:03,178 Ana Marinkovic: and as I mentioned earlier, impacts on their revenue lines. But 100 00:07:03,300 --> 00:07:05,969 Ana Marinkovic: there are also plenty of reasons to be super confident 101 00:07:05,969 --> 00:07:09,270 Ana Marinkovic: that things will turn positive toward the latter half of 102 00:07:09,270 --> 00:07:13,679 Ana Marinkovic: next year. A big factor there is that our unemployment 103 00:07:13,770 --> 00:07:18,810 Ana Marinkovic: remains near its lowest level in decades. We also know 104 00:07:18,870 --> 00:07:22,800 Ana Marinkovic: that our natural resources are a great export opportunity and 105 00:07:23,040 --> 00:07:25,828 Ana Marinkovic: there are many businesses with ambitions to grow. As I 106 00:07:25,830 --> 00:07:29,879 Ana Marinkovic: said, we lend over $ 1. 2 billion to small businesses 107 00:07:29,879 --> 00:07:34,320 Ana Marinkovic: each month. So the spirit of entrepreneurship is certainly strong. 108 00:07:35,190 --> 00:07:38,820 Sean Aylmer: Okay. So with that as a background, if I want to 109 00:07:38,820 --> 00:07:41,820 Sean Aylmer: go into a small business, create my own small business, 110 00:07:42,150 --> 00:07:44,129 Sean Aylmer: what should I be thinking about? What are the things, 111 00:07:44,130 --> 00:07:46,949 Sean Aylmer: what's the advice you would give someone who thinks they've 112 00:07:46,949 --> 00:07:48,720 Sean Aylmer: got a great idea and wants to start a small 113 00:07:48,720 --> 00:07:50,850 Sean Aylmer: business? What are some of the things they should be 114 00:07:50,850 --> 00:07:51,900 Sean Aylmer: thinking upfront? 115 00:07:52,650 --> 00:07:56,940 Ana Marinkovic: Well, they need to be thinking about educating themselves on 116 00:07:57,000 --> 00:08:02,399 Ana Marinkovic: the opportunity, the market, the environment, the competition, point of 117 00:08:02,400 --> 00:08:07,679 Ana Marinkovic: differentiation. How are their products and services going to be 118 00:08:07,680 --> 00:08:11,460 Ana Marinkovic: competitive to what is already in the market? Having a 119 00:08:11,460 --> 00:08:17,070 Ana Marinkovic: really, really strong business plan, understanding what government grants they 120 00:08:17,070 --> 00:08:21,270 Ana Marinkovic: could potentially get. But also then building a strong relationship 121 00:08:21,599 --> 00:08:25,860 Ana Marinkovic: with their bank and making sure that they are planning 122 00:08:25,920 --> 00:08:30,570 Ana Marinkovic: in a way that is sustainable and that can withstand 123 00:08:30,900 --> 00:08:35,189 Ana Marinkovic: a number of different shocks, be it continuous interest rate 124 00:08:35,190 --> 00:08:40,080 Ana Marinkovic: rises or again, as we talked about, labor shortages or 125 00:08:40,650 --> 00:08:45,059 Ana Marinkovic: they need to think about having alternative manufacturing and supply 126 00:08:45,059 --> 00:08:50,640 Ana Marinkovic: chains. So it's so important to think really, really holistically 127 00:08:51,000 --> 00:08:57,270 Ana Marinkovic: and to be quite conservative in your projections and also 128 00:08:57,509 --> 00:09:00,150 Ana Marinkovic: to keep... One of the things that is quite unique 129 00:09:00,150 --> 00:09:03,690 Ana Marinkovic: in Australia, Sean, is that Australian small businesses tend to 130 00:09:03,690 --> 00:09:07,260 Ana Marinkovic: utilize the equity in their homes to prop up their 131 00:09:07,260 --> 00:09:10,530 Ana Marinkovic: businesses and their cash flows. And it is something that 132 00:09:10,530 --> 00:09:14,399 Ana Marinkovic: at NAB we actually strongly discourage. I think it is 133 00:09:14,400 --> 00:09:19,468 Ana Marinkovic: really important that anyone going into small business or already 134 00:09:19,470 --> 00:09:23,790 Ana Marinkovic: established small business owners really keep their personal and business 135 00:09:23,790 --> 00:09:30,719 Ana Marinkovic: finances separate because it's just important to ensure that risk 136 00:09:30,719 --> 00:09:36,000 Ana Marinkovic: mitigation and that the wellbeing of the family does come 137 00:09:36,000 --> 00:09:40,530 Ana Marinkovic: first because we have seen some examples where those things 138 00:09:40,530 --> 00:09:40,981 Ana Marinkovic: don't end up well. 139 00:09:40,981 --> 00:09:44,220 Sean Aylmer: Now, just before you go, I've got to ask you, 140 00:09:44,220 --> 00:09:46,920 Sean Aylmer: Ana, because your story itself is fantastic. You arrived in 141 00:09:46,920 --> 00:09:49,920 Sean Aylmer: Australia as a refugee from Serbia when you were 12. 142 00:09:50,130 --> 00:09:52,740 Sean Aylmer: You've had this great career and I know that diversity 143 00:09:52,740 --> 00:09:56,968 Sean Aylmer: inclusion are very important to you. Also focus on mentoring 144 00:09:56,970 --> 00:10:00,330 Sean Aylmer: and supporting other women to reach their career goals. You 145 00:10:00,330 --> 00:10:03,840 Sean Aylmer: are a successful example of that within the finance sector. 146 00:10:04,500 --> 00:10:07,530 Sean Aylmer: Is the finance sector getting better at gender balance? 147 00:10:08,730 --> 00:10:10,441 Ana Marinkovic: Well, yes, it's certainly getting better. 148 00:10:10,441 --> 00:10:10,442 Sean Aylmer: It's not there yet. 149 00:10:10,442 --> 00:10:14,340 Ana Marinkovic: I do not think it's quite there yet, but it 150 00:10:14,340 --> 00:10:19,200 Ana Marinkovic: certainly is getting a lot better. I'd say many professionals 151 00:10:19,350 --> 00:10:22,800 Ana Marinkovic: change countries in pursuit of their career goals. Obviously my 152 00:10:22,800 --> 00:10:27,060 Ana Marinkovic: story is quite different and my transition to Australia was 153 00:10:27,420 --> 00:10:30,510 Ana Marinkovic: obviously for different reasons. As you said, I was only 154 00:10:30,510 --> 00:10:33,120 Ana Marinkovic: 12 years old when I was separated from my family. 155 00:10:33,600 --> 00:10:36,958 Ana Marinkovic: But I also want to say that that is where Australia 156 00:10:37,320 --> 00:10:40,529 Ana Marinkovic: is such a unique country where that opportunity and access 157 00:10:40,530 --> 00:10:45,569 Ana Marinkovic: to education and development is second to none. I was 158 00:10:45,570 --> 00:10:48,958 Ana Marinkovic: given opportunities to learn, to grow and lead and that 159 00:10:48,960 --> 00:10:51,809 Ana Marinkovic: is something that I'm incredibly grateful for and I think 160 00:10:51,809 --> 00:10:56,910 Ana Marinkovic: that my journey is a really good example of why we 161 00:10:56,910 --> 00:10:59,250 Ana Marinkovic: are a really lucky country, indeed. 162 00:10:59,700 --> 00:11:01,529 Sean Aylmer: Ana, thank you for talking to FEAR & GREED. 163 00:11:02,219 --> 00:11:03,630 Ana Marinkovic: Thank you very much for having me. 164 00:11:03,960 --> 00:11:07,740 Sean Aylmer: That was Ana Marinkovic, Executive General Manager, small business bank 165 00:11:07,740 --> 00:11:10,380 Sean Aylmer: at National Australia Bank. This is the FEAR & GREED business 166 00:11:10,380 --> 00:11:12,929 Sean Aylmer: interview. Join us every morning for the full episode of 167 00:11:12,929 --> 00:11:17,069 Sean Aylmer: FEAR & GREED, Australia's best business podcast. I'm Sean Aylmer. Enjoy 168 00:11:17,070 --> 00:11:17,460 Sean Aylmer: your day.