New Zealand banks have had great success in growing their digital channels. Stephen Little spoke to four of the largest banks in New Zealand to find out more about their digital banking strategy and the impact the shift to mobile and online is having on their branch networks

New Zealand banks are among the most successful in the world at promoting digital banking. RBI spoke with Kiwibank, BNZ, ANZ and ASB to discuss their digital banking strategies.

RBI: What are your current digital banking priorities?

Stephen Bowe, head of online, BNZ (SB): We are adding to our transactional capability to give people more functions, so they are in control of their money. It is important to engage customers and one way we will be doing this is through personalisation. Our aim at BNZ is to help customers make the most of the money they have got.

Peter Fletcher-Dobson, head of online channels, Kiwibank (PFD): We are hoping to drive migration to digital channels and transform Kiwibank’s online channels from transactional to sales and service. We want to develop social media as a key part of our marketing and brand strategy and use a mobile-first design principle for the website. We are also looking to give the functionality to manage everyday banking wherever you are via mobile apps or our mobile website.

Kerri Thompson, managing director for retail banking, ANZ (KT): Technology has given control to customers and the banking system as a whole is much more customer-centric. The rise of social media means it is no longer a one-way conversation, and banking, like other industries, needs to be reactive and responsive.

At ANZ we are constantly looking at new technologies that will make it easier and more convenient for people to bank with us. The new technologies we are introducing are designed to supplement and complement the service provided by our staff.

Nicole O’Brien, corporate communications, ASB (NO): Our focus on technology innovation is centred on making life easier and more convenient for our customers. New Zealanders are generally very tech-savvy and have continued to embrace mobile and video technology in their professional and personal lives.

RBI: What is your current online banking strategy?

SB: Online banking is sometimes driven by the bank, so we are focussed on creating a great digital experience and treating people as individuals.

We have just launched a new internet banking platform called YouMoney, which has a user-centric design. Customers will be able to personalise their money by creating different pots for different functions. They will be able to open and close accounts, set savings goals and drag and drop funds between their own accounts or to payees.

PFD: Over the past year we have introduced online relationship managers for all online customers. We have also been upgrading our online offering for business markets customers over the past six months. Active users of our internet banking channels are around 50%. Up until last year, desktop internet banking was growing at 16% per year.

KT: After announcing last year that we were bringing the ANZ and National Bank brands together as ANZ, we brought customers of both banks onto a single internet banking platform. This has simplified our internet banking offering and means it will be easier to introduce new features and improvements.

We will be upgrading our internet and mobile platforms throughout the rest of 2013 and beyond. Our goal is to add the features our customers want across internet banking and mobile and make them as easy to use as possible. Our next release is in March 2013, which will include giving customers access to seven years’ worth of statements and tax certificates in PDF format.

NO: Mobile and online banking innovation means customers increasingly have ‘their bank in their hand’, giving them greater control over how they manage their money. The pace of technology change and adoption means we are approaching a point where a customer can access a comprehensive range of banking services without ever having to enter a branch.

ASB has remained at the forefront of technological innovation with recent developments such as the world’s first virtual branch on Facebook and the ability to make mobile payments to Facebook friends.

RBI: What is your mobile banking strategy?

SB: If you do not have a mobile app for a customer account you are just not fulfilling customer expectations. From our perspective, it has been about broadening the functions and being pro-active, rather than reactive. It is important to push modifications that give customers control. We have got iPhone and Android apps and we have launched a mobile app for businesses. Digital wallets will be the next innovation.

Mobile banking is still very transactional and is not just internet banking on your smartphone, which is what most mobile banking is at the moment. The opportunity for it is much broader than that as smartphones have created a whole new way of interacting.

PFD: We want to provide the best mobile banking services for out customers. We have innovated the traditional banking model so we can offer our online customers a relationship manager they can interact with via desktop and mobile.

We are currently operating on iPhone and Android platforms and we offer a number of services including personal mobile banking with account and transactional information and payments to individuals and businesses.

Since mid-2012, usage of our mobile apps has grown 375% and mobile users now make up 38% of active online customers. It is quite staggering.

KT: We are constantly looking to enhance and update our mobile banking services for both iPhone and Android users.

We successfully trialled ANZ Mobile Wallet on iPhone earlier last year. This technology uses near-field communication, enabling customers to conveniently and securely make purchases wherever contactless cards are accepted via their phones.

Customers can securely transfer and store one or more ANZ cards on their phone and use those cards by simply holding their device close to the payment terminal.

It is part of our wider plans for mobile innovation, but we do not yet have a firm timeframe for bringing a wallet into production.

NO: We are seeing acceleration in demand for banking over mobile as smartphones continue to move towards being a daily necessity. It is clear that people’s willingness to embrace mobile technology will see them increasingly rely on smartphones for day-to-day transactions, thereby reducing reliance on traditional payment methods.

In its first year alone, the volume of transactions done through ASB’s mobile banking app was more than four times the number that took place in the first year of internet banking. The ASB Mobile app is the first banking app to be available across Apple, Android and Windows smartphones, covering 80% of the market.

RBI: How are changes in digital banking affecting your branch strategy?

SB: Online will never be as good as an actual conversation as people can offer real relationships. Stores will still play an important role in banking as we go forward. We are focussed on engaging with customers, rather than having our stores as just being a point of transaction. We have got 180 branches and the number has stayed relatively static. We have just undergone a big store revamp programme where we looked at layout and did a big refresh.

We want to free up the phone and store channels. We are starting to see things like video in the stores so people will be able to go in and use them to get specialist advice.

We have not seen much change in call centre growth and have found online is driving behaviour in the call centre, with peak times moving to 8.00pm. We are hoping to free up call centre resources to be more focussed on outbound.

PFD: We have currently got 280 branches, which has not altered much since we launched. The current store network, which is shared between Kiwibank and our owners New Zealand Post, does not currently serve our customers in the best way possible. We are looking to transform the network to give people a wider choice of when, where and how they do business with us.

Self-service is a key strategic initiative and we have also developed a set of future store concepts that are being trialled now that consist of three different concepts and sizes of store. These will involve larger growth stores with separate banking and postal counters, and express stores that will be more compact and located in convenient places.

Contact centre person-to-person calls have plateaued, while online sessions have doubled, which has been driven mostly by mobile. This is against a backdrop of 8% customer growth year-on-year.

KT: There will always be a need for branches, but they will constantly evolve. Branches of the future will be less about transactional banking and more about offering advice, access to technology and other services.

The online and mobile channels will continue to grow and we will see a convergence of channels. Online and mobile channels will be used for quick and instant transactions. The branch will be a place to get advice and support from experts, and will house interactive, self-serve technology for customers to use.

Branch design will be about removing the physical barriers between customers and staff, making conversations easier.

At the moment we have around 300 branches and over the next two years, as we combine some of our adjacent ANZ and National Bank branches, this will fall to about 280.

We are investing $100m to ensure we have new and renovated branches and specialist staff in the places customers need them, including branches in some new communities. We will also continue to review the network to ensure it stays that way as the industry and country evolve. Over the next two years, we will increase our branch presence from 75% of where New Zealanders live to almost 90%.

There will be a wide range of specialties covered including investment, mortgage and small business specialists. Our branch design will become more modular and flexible so we can meet changes and trends in the way people do banking in the future.

RBI: What are your future plans for digital banking?

SB: We have to make sure that every single piece of effort we put in maximises the output for the customer.

iPads are going to be the default way to consume the web soon. So far iPad apps have tended to be a blown-up version of mobile apps. I think we should be focussed on offering a much richer experience, similar to internet banking, but with a different level of interaction.

PFD: We have optimised our web internet banking for tablets using a mobile first design principle and we are continuing to transform our public site into a responsive site for multiple screen sizes.

KT: Our goal is to add the features our customers want across internet banking and mobile and make them as easy to use as possible. We will be upgrading both our internet banking and mobile platforms throughout the rest of 2013 and beyond. Our next release is in March 2013, which will include giving customers access to seven years’ worth of statements and tax certificates in PDF format.

NO: Social media, mobile and financial services are constantly evolving and we will continue to design the customer’s banking experience to be relevant, personalised and useful. Our ongoing dialogue and engagement with our community through our digital and social channels will be a key factor in the innovation and design process.

We are committed to communicating with customers in the spaces they are comfortable with and our conversations with our customers about their banking wants and needs are an important driver for innovation.