Bank of New Zealand: Rejuvenating consumers’ fiscal health

If you want to start a new chapter in a far-off country, one of the first logistical hurdles you’ll face is creating a local bank account. This was exactly the case when Stephen Bowe touched down in Australia just over a decade ago. “Being new to the country, I needed a bank account. I actually tried opening accounts with several different banks, but in each case the whole process was awful,” Bowe recalls. “I vividly remember walking through Sydney’s CBD (central business district) thinking to myself, ‘If I ever get the chance to start a bank that’s genuinely focused on the customer, I’ll show them how to do it...’ I suppose the moral of the story is be careful what you wish for.”

Fast-forward a year and Bowe had gotten his wish. He left his career in telecoms and joined a bank, helping the National Australia Bank (NAB) launch a new online bank called UBank. “Ever since then I’ve been super passionate about how to make banking better for customers and specifically how to do that online,” Bowe enthuses. “I think if you look at banks around the world, they all talk about how they're trying to focus on the customer, but it's quite clear that in many geographies, they have failed to do that adequately.” Bowe also points out that despite widespread adoption of digital services by customers, it’s important not to equate usage with good service. “Just because you’ve seen exponential growth in mobile banking usage, it doesn’t mean that your app is any good. The reality is that even if it was rubbish, people would still use it in droves because of the convenience it provides.” Instead, banks need to think much more deeply about how they create value for their customers in their everyday lives.

Today, Bowe is making his mark at NAB subsidiary, Bank of New Zealand (BNZ), as the firm’s GM, Digital & Applications. He and his team have been tasked with delivering state of the art customer experiences to the 155-year-old bank by tapping into the wealth of digital tools at the financial sector’s fingertips. “If you look at most digital banking offerings around the world today, they pretty much all look and feel the same. It’s a one size fits all proposition where customer interactions are largely transactional, and the service is increasingly commoditised. The whole process is unexceptional… but it doesn’t have to be like that.”

And so, Bowe and his team searched for a different way to help BNZ stand out from the crowd. Instead of trying to simply improve the current paradigm of online banking, they went back to the drawing board and spent a significant amount of effort to decipher what customers really want from their bank. Whether trying to pay off a mortgage or saving for a wedding, most customers are trying to make their bank balances stretch to meet the needs of their daily lives. That spurred BNZ to make financial wellness a core mantra for the firm. “At BNZ, our whole purpose is based around helping customers be good with money, so they can do great things with it. Essentially, we want them to achieve better financial outcomes, however they define those outcomes for themselves,” says Bowe.

With this in mind, BNZ created a brand new online banking platform called YouMoney, that specifically focused on helping customers manage their money more effectively. Customers can set up as many accounts or ‘pots’ as they want. They can then personalise them by adding photos and goals, as well as moving money effortlessly using a novel drag and drop capability. “It just looks completely different,” enthuses Bowe. “It’s highly personalised; it doesn't resemble the traditional ledger of most platforms. Instead we’ve focused on design to add the little details that delight customers. We’ve asked ourselves: ‘How can we make each digital banking experience remarkable? How do we create everyday exceptional experiences?’ We’re working to turn an average experience into an awesome experience.” This digital transformation is already starting to see dividends: BNZ was named Best Consumer Digital Bank in New Zealand and Most Innovative Digital Bank in Asia-Pacific at the 2018 Global Finance awards.

Customers are also reaping the benefits, contends Bowe. “We can see that we’re making a difference for our customers. We’ve found that people who use our platform to compartmentalise their money are hitting their goals more frequently. They’re saving greater amounts of their income.” With many people keen to get on the property ladder, repaying a mortgage can seem a daunting task. To tackle this financial challenge, BNZ also launched a new feature that allows customers to change their mortgage payments online and make micropayments. “Since it launched, we’ve been able to save BNZ customers over NZD$585m in future interest payments. We’ve knocked more than 135,000 years off mortgages and the average customer has saved over NZD$10,000.” The most interesting fact up Bowe’s sleeve though, is that 67% of people’s changes have cost less than $50 a fortnight – that’s the cost of a cup of coffee per day.

It’s worth noting that BNZ has not only zeroed in on the customer experience, but it’s also been keen to reimagine the employee experience too. As the war for talent heats up and businesses scramble to attract and retain top talent, Bank of New Zealand has pushed ahead with cutting-edge employee initiatives. This is perhaps best encapsulated by the firm’s digitally-savvy new premises in Wellington. “We’re aiming to make BNZ the premier place to work in digital in New Zealand,” explains Bowe, noting how the firm is not only contending with other banks, but also competing with a diverse ecosystem of digital firms. “We’re working to create an environment where digital natives want to work,” he adds. “Everything from our customer research rooms to our break out areas reflect our digital ethos” Additionally, in a bid to boost talent retention, the firm has worked hard to upskill its staff, setting its sights on the up-and-coming realm of cloud computing. In fact, Bowe points out how BNZ’s parent firm, NAB, has more AWS-certified engineers than any other organisation in the whole of Australia, other than Amazon Web Services (AWS) of course. "We’re on course to replicate that here in New Zealand at BNZ.”

At the end of the day, most of BNZ’s initiatives revolve around one common aim: improving its customers’ financial wellbeing. As customers focus on saving – whether managing day-to-day income and expenses, building up a rainy-day fund or saving for retirement – banks increasingly are recognising that they have a duty to help customers navigate these challenges and promote better financial health. BNZ has clearly put this ethos into motion with its digital transformation efforts. It’s this, says Bowe, which distinguishes BNZ from the pack. “I feel we have a strong sense of purpose,” he reflects. “We think helping customers be good with money is a fantastic challenge to rally behind. We can make a material impact for New Zealanders financial wellbeing by helping them be good with money.”