How New Zealand banks are front running on innovation
Financially empowering a new generation with practical money skills and data-driven campaigns to make kiwis finally better off are just some of the key initiatives driven by banks in New Zealand.
New Zealand is now seeing one of the highest rates of digital engagement globally.
According to RFi Group data over 80 per cent of consumers interact with online or mobile banking at least once per week.
“As a result, consumers in New Zealand are likely to have higher expectations of the digital service and experience they receive from their banks and other financial service providers,” RFi Group general manager Kate Wilson said.
The inaugural RFi Group New Zealand Banking and Innovation Awards was testament to how Kiwi banks and fintechs are transforming the industry.
Interviews with Kiwibank and ASB reveal how these banks are leading on customer engagement and innovation.
Financially empowering new generations
Soon after it formed in 2015, Banqer, a financial education company struck a partnership with Kiwibank that would rollout a program that inspires students to be curious, creative, and confident with money.
Five years later, this relationship has improved the financial literacy and developed the financial capability of more than 150,000 Kiwi kids, with ambitions to support a further 110,000 Kiwi’s in 2020.
For Kiwibank Sustainability Lead Julia Jackson and Banqer co-founder and CEO Kendall Flutey, to be recognised as the winner in the Best Financial Literacy and Betterment Initiative is testament to the hard work achieved by both organisations in delivering on financial literacy.
Banqer currently provides New Zealand’s most comprehensive digital solutions dedicated to providing financial education to schools; as such the partnership has a resounding impact.
This uplift in financial education has been achieved through three innovative platforms; Banqer Primary, Pēke Kā, and most recently, the launch of Banqer High.
Jackson said that Kiwibank provides its expertise to ensure educational content is accurate, the creation of engaging video content (that has 250,000+ views), device donations are made, and have conducted school visits to talk to students about banking.
What has actually blown me away…is the pace and willingness that Kiwibank has provided to the program.. It has been really incredible, and I think fundamental to our partnership, Kendall Flutey, Banqer
The flagship platform, Banqer Primary engages students with finance through online accounts, and mock classroom currency, students begin to earn money, transfer it, save it, and pay classroom bills (such as weekly desk rental, or wifi costs).
Building on these foundations, students aged 9 -13 then traverse concepts such as credit cards, renting, mortgages, contents insurance and more within Banqer High - all through simulation.
With financial behaviours forming as early as seven years old, Banqer Primary is a crucial proponent of national financial attitudinal shift and behavioural change, evidence to date suggests that some parents have commented that their children are more mindful of family costs like asking do you pay rent for our house etc.
According to Flutey, this in turn creates gratitude and has a great flow-on effect.
Both Banqer and Kiwibank have regular check-ins to ensure the program remains robust and timely although Banqer’s Flutey and her team are responsible for the day-to-day running.
We genuinely want to support the creation of a more financially capable generation of Kiwis, Julia Jackson, Kiwibank
“What has actually blown me away from my previous experience working with bigger organisations is the pace and willingness that Kiwibank has provided to the program. It has been really incredible, and I think fundamental to our partnership,” Flutey said.
Kiwibank is state-owned, but still must adhere to commercial objectives and with that a balance has been struck between advocating and supporting a national literacy program without promoting the bank.
“We have been incredibly conscience of how we have developed the partnerships. We have very clear lines around how Kiwibank will be seen in the platform,” Jackson said.
“For example in the primary school space, a child will never see the Kiwibank logo when they are interacting with the financial literacy concept.
“That's incredibly important to us because we didn't get into the partnership for that reason.
“We're a commercial organisation, of course, but it’s not the primary reason. We would definitely not want to be seen to be influencing choices made through the platform,” she added.
“We genuinely want to support the creation of a more financially capable generation of Kiwis.”
Walking the walk on customer innovation
ASB - owned by Australia’s largest lender the Commonwealth Bank – recently won the Best Customer Innovation Award for a strategy that helps to accelerate financial progress for all New Zealanders.
“Success for us is the customer being financially better off,” ASB direct marketing chapter lead Morgan Lee said.
“We use timely, relevant and personalised communications to help customers identify actions they can take to better their financial position.
Lee and the Connected Customer Conversations programme’ team led the strategy, which uses data to create better customer outcomes.
“Our vision for our direct marketing has always been to deliver better experiences for our customers,” said Lee. Importantly the strategy, while personalised, was delivered at scale.
Conversations run every day, triggered by customer behaviour and actions.
Messages are able to be served through multiple channels, inbound or outbound, allowing the message to surface in the best channel for each customer, based on their habits and preferences.
The project involved five years of cleaning up data, as well as investing in the latest marketing and advertising technology to put it to work.
“Success for us is the customer being financially better off,” Morgan Lee, ASB
The bank now has a library of more than 600 campaigns that are able to run each night, triggered by customer behaviour, as seen in their data.
“This enables us to identify opportunities to communicate directly with personalised information, relevant to each individual’s own needs.”
Lee highlights a salient point – customers typically have a long-term relationship with their bank, however, banks have not traditionally harnessed the vast amounts of data into meaningful customer relationships.
“A key focus has been around identifying opportunities to help our customers become financially better off, as identified within our data - for example saving money in fees, or earning more interest.”
Based on the metrics, ASB’s customers are benefiting from the strategy.
To date, 1,090 customers have switched transaction accounts, saving more than $536,372 in fees annually.
Furthermore, 12,122 customers switched savings accounts, earning more than $1,398,580 in additional interest annually while 33,439 customers made more than $37,640,448 through additional voluntary Kiwi Saver contributions.
The library of campaigns also drove $33 million in additional home loan payments, with customers responding after receiving ASB’s message, saving them interest, and helping them get mortgage free sooner.
Overall, according to Lee, these campaigns resulted in 805,812 actions taken, or as she terms it - Good Customer Outcomes delivered.
“Our customers are continuing to respond to our recommendations and taking action which is awesome,” said Lee.
“For us as a bank, the question is always ‘will the customer be better off’.”
The full report is featured in the June edition of AB+F