Australia, who have won the one-day World Cup four times and are the most successful Test playing nation of all time, are ranked ninth in the world in the shortest form of the game.
Their best finish in the three Twenty20 World Cups to date was reaching the final at the last edition in 2010 but Bailey said the country's approach to the format had altered.
"It's the one trophy we don't have in our cabinet and it's something we're looking to rectify," he told reporters in Colombo on Thursday.
"It's a bit of a process, Australia didn't really take T20 that seriously, I certainly think that's changed.
"(But) it doesn't change overnight, it takes a bit of time to catch up."
Australia prepared for the Sept 18-Oct 7 tournament with a three-match series against Pakistan in the United Arab Emirates, a rare chance to string a few matches together which coach Mickey Arthur said should benefit the team.
"Normally your T20s are sandwiched between your tests and your ODIs and it is a time where you take your foot off the pedal," he said.
"But to have a group together for 12 days has been excellent."
Australia lost the first two matches of the series to the 2009 Twenty20 World Cup winners - the first by seven wickets and the second in a 'super over' shootout - but recovered to win the third encounter by a crushing 94 runs.
"I thought we had a really good build up, we obviously had a disappointing first game but from there on in I think we played some really good, consistent cricket with bat and ball," Bailey added.
"And certainly to finish off that series with our strongest performance was excellent and certainly arriving here as confident as can be and with a little bit of momentum."
The second defeat saw Australia slip below Ireland to 10th in the rankings but they moved back above the Irish with the victory over Pakistan in the third match. Bailey admitted to being 'confused' by the rankings.
"We probably don't pay that much attention to them," Bailey said.
"I haven't been doing this job that long but I have no idea how the rankings work.
"Whether that's a fair reflection, I guess we'll find out over the next few weeks.
"We're not proud of it, but it's not embarrassing either ... ranking doesn't matter when you start playing."
Australia face Ireland in their opening Group B match next week before meeting West Indies, also in Colombo, the following Monday.
While conceding that David Warner and Shane Watson were key players for Australia, Bailey said their opponents would be foolhardy to think they were a two-man team.
"They're two of our most destructive batsmen and if they fire, we're pretty hard to beat," he said.
"In terms of us relying on them, they're matchwinners but I don't think they are the only ways we can win.
"If you just looked at them, I think you'd be doing the rest of the team a disservice."
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