FST Media: What are your priorities for the next 6 months?
Herbison: Our focus at BNZ is clear – we are here to help New Zealanders to ‘Be Good With Money’.
With some of the lowest interest rates in a generation, it’s a great time for our customers to get ahead and pay more off their mortgage. So we need to be enabling better financial conversations with our customers. Equally, many customers look for more than just an interest rate. A real priority for us is delivering BNZ Advantage – our rewards and recognition programme. A part of this is credit card rewards, but it is far deeper and takes into account the broader relationship. The card offering gives customers a choice. They can earn cash back and save that money or take it off their card balance. Or they can earn Fly Buys points at an accelerated rate.
After the launch of the BNZ Advantage we’ve seen an increase of retention of our high value customers which is a clear sign that we’re delivering what they’re wanting from banking relationship. An importantly, recognising their value to us – this is so much more than just rewards, we have a whole recognition programme. Underpinning all of this are our six customer promises that guide us to always try to do the right thing by our customers. We have an internal programme of work behind the scenes to identify and fix any pain points and improve our service offering and we have managed to halve our customer complaints over the last year.
FST Media: What technology or innovation is proving to be the single biggest game changer across the finance industry?
Herbison: Digital is now the number one way our customers choose to bank with us. In 2015 digital engagement increased 25 per cent and mobile engagement increased by 36 per cent. We also recently completed migrating all our customers to You Money, our award-winning digital banking platform.
The speed of technological change is certainly driving the entire industry to be more agile. We are looking beyond merely being first to market and are striving to provide the right customer solution that makes our customers lives easier. We can only do this by working with our customers and listening to what they want and how they want to interact with us.
FST Media: What is the most significant challenge facing the housing market in New Zealand right now?
Herbison: The housing shortage has become an issue of social and economic importance, particularly in Auckland where supply has not been keeping up with demand for a number of years and is now starting to have flow-on effects to other regions in New Zealand.
BNZ’s Financial Futures research told us that many Kiwis are struggling to gather a deposit and the resulting home ownership divide is creating ‘haves’ and ‘have nots’ in terms of the extent they are being good with money. For many New Zealanders, home ownership is an essential way to save for their retirement. Now, with so many struggling to get into the market, we have to ask ourselves what impact this will have in the future.
FST Media: What are the current attitudes towards mortgages and the property sector in New Zealand?
Herbison: Our BNZ Financial Futures research spoke to 2,000 New Zealanders to try to gauge sentiment about home ownership and identify the barriers for entering the housing market. Starkly, 59 percent of non-home owners say homeownership isn’t achievable in the next five year. Aucklanders who are ready to take the leap and buy their own home are six times more likely to buy outside the city or town they live in due to affordability, compared with just two years ago. That said, despite a sense of despondency, more than two-thirds of non-property owners confessed they have the capacity to save money so we definitely encourage those looking to buy a first house to take a realistic look at their financial situation and work out a plan. On the flipside, property owners appear to be taking advantage of historically low interest rates to pay off their home loans faster with 69 percent making lifestyle sacrifices to put extra money towards their mortgages.
FST Media: What role does BNZ play in helping drive New Zealand’s competitiveness in the banking sector?
Herbison: Home lending in New Zealand is incredibly competitive and reacts to market and regulatory changes. Despite prices, low interest rates are having a positive effect on home loan payments. BNZ has led the market on many key drops in fixed interest rates We’re partnering with mortgage brokers for the first time in 12 years which means we now have access to a quarter of home buyers who use a broker. That part of the market was effectively closed off to us and we’re already seeing the impact of how this has helped arrest our declining market share and increased volume. We’re also boosting our mobile mortgage managers using analytics to place them for best opportunity. By working on all aspects of our distribution model and being more agile, we are seeing results. In March 2016 our market share experienced its highest monthly gain in over four years.
FST Media: What specific insights does BNZ bring to the Asia Pacific finance industry?
Herbison: As part of our work to help New Zealanders be good with money, we have really aspired to confront New Zealanders with the hard questions with the aim of inspiring better financial know how – our BNZ Financial Future research is a key part of that. We’ve long been an industry leader in small business banking in New Zealand, an area critical to the New Zealand economy. Our goal to help support a high-achieving New Zealand has led to us being named Canstar’s small business bank of the year for the last five years and have recently recruited more than 50 small business bankers to expand our offering.
FST Media: What notable examples have you seen of financial organisations innovating to acquire and retain the interest of Gen-Y ers?
Herbison: Our customer promises are just as relevant to Millennials as they are to any other segment of the market so focusing on fast, effective services that give the best possible value that are delivered in the most relevant way. The key to retaining the interest of Millennials is communicating with them in the channels that are most relevant to them. Digital marketing and social media will continue to play a growing role in how we communicate with these customers. The focus will be on highly tailored, relevant content focusing on delivering the right message, at the right time and in the right way. But importantly, being good with money is an intergenerational issue and resonates with all customers.
FST Media: How do you encourage a culture of innovation in your team?
Herbison: We feel culture is our strongest assed because it is how we behave that creates the experience for our customers. We have the most open and collaborative environment of on any organisation I have worked for and this creates a strong foundation for the vulnerability and agility an organisation needs in order to stay relevant to customers through innovation.
FST Media: Where do you look for emerging technology trends?
Herbison: The pace of technological change is incredibly quick and it’s an ongoing challenge to remain receptive to emerging trends and platforms. Disruption has become inevitable and we are constantly looking outside our own walls to give our customers the services they need to we can remain relevant. Working with partners providing specialised services has become a crucial part of our business – a recent example of this is our partnership with Figured, a specialised cloud-based financial planning platform designed specifically for farmers. Partnering is critical to any business and to fully appreciate the value chain customers live in every day, you need to appreciate and accept that you no longer can do it all yourself to build and maintain relevance to customers. We spend a lot of time looking and engaging with what could be termed as ‘fintech disruptions’ but we also have an eye to other market disruptors like AirBNB, Uber and Fitbit to understand how digital technologies can enter a value chain and provide a different experience for customers.
FST Media: What is the best career advice you have ever received?
Herbison: Be yourself, because everybody else is taken.