An interview with Nick Astwick


Kiwibank’s Chief Operating Officer speaks with FST Media about how banks can harness the power of social media in order to engage with a growing millennial customer base.

FST Media: What are your key priorities for Kiwibank in the next 12 to 18 months?

Astwick: Our number one priority is improving our core performance which is multifaceted.  This includes our financial performance, our regulatory and sales and service performance.

Our second priority is responding to key trends in the marketplace around customer and technology shifts to ensure we remain relevant for our customers.  The disruptive nature of financial services and the big shift towards digital is one of our core themes.  Within this agenda is the need to undertake a core system change to ensure we have a fit for purpose platform for the future.

Thirdly, from an organisational perspective, we are focused on how we really bring our Kiwibank purpose of ‘Kiwis making Kiwis better off’ to life, in everything we do.  Our focus is on the successful delivery of a purpose driven customer experience and staying relevant in a changing market. Digital and data are just some of the tools we will use to do it.

FST Media: What technology or innovation do you see as being the ‘holy grail’ that is yet to be delivered in financial services?

Astwick: Firstly, I do not think of technological innovation as the holy grail, that is my starting point.  You see a lot of organisations talking about mobile, big data, digital as the solution. The Holy Grail for me is ultimately about how these great capabilities and technologies are leveraged in a unique way to ensure you have a sustainable, high performing and relevant business.

For me, brand (and the brand experience) is really the only long-term differentiator in financial services. For us, it is about how our purpose of ‘Kiwis making Kiwis better off’ is bought to life through customer experiences and propositions built from having a strong customer and innovation culture.

FST Media: Can you tell me about the value proposition of Fetch in terms of how it will help to enhance your overall customer journey?

Astwick: Mobile technology is a fundamental platform of the future. Fetch is a great proposition, delivered on this platform, to make it easier for business to do business. Simply put, making payments easier for customers. Fetch is just one example of many of the innovations we are focused on to ensure we are more functionally excellent and relevant for our customers. It is also an example of how we can bring our purpose to life by making business more independent and prosperous.  This is at the heart of our customer experience. 

FST Media: What are your thoughts on the rise of digital disruptors like Apple and Google and their intelligent use of data analytics?  How should banks like Kiwibank respond to this threat?

Astwick: At the heart of it you need to be functionally excellent. This takes into account your customer experience and your service touchpoints – they need to be seamless and cannot have significant friction. There is a saying that customer’s don’t join banks they leave them. Often it is a service failure at the heart of why a customer leaves.

But this is not enough. You need to be highly relevant in a fast changing context. Many functionally strong businesses have failed because they are no longer relevant. This is where I see the key threat and where Banks need to respond.

The focus for us is making sure we are fundamentally relevant to customers and that we are effective in adapting to their shifting preferences. Customer preferences are changing as a result of significant technological and social shifts and to remain relevant banks need to meet their preferences. At the end of the day, customer needs are largely the same but the way we serve those needs are rapidly changing. Also customers are looking for brands that have a purpose beyond just profit and brands that deliver richer customer experiences.

FST Media: How can banks harness the power of social media in order to engage with a growing millennial customer base?

Astwick: We are seeing some big shifts in the space of social media and there is a number of things that I think banks need to focus on in this area. From Kiwibank’s perspective, we have to understand the role of social players in the marketing of social channels.  That’s crucial and at Kiwibank we tend to use it in two areas mainly.  The first is how we use the social media platforms to assist customers with their decision-making when they’re actively considering which bank to talk to.

The other area that we look at is using social channels to build brand engagement. We do that by referencing our products and services, but it revolves more around our brand attitude, sharing financial tips and being consistent with our vision of ‘Kiwis making Kiwis better off’.  Service interaction also plays an important role.

A really important consideration is respecting each social channel by treating it in the right way, because they’re not all the same. Social channels are multiplying faster than any brand can keep up with, and they’ve all got their own norms, advocates and detractors. The most important thing is to understand the relevant channel for the brand and for your target markets.  You don’t have to be everywhere; you have to be on the platforms that you believe are relevant particularly to you and your customers.

Social platforms are becoming utilities to the internet, so we need to consider how we can build platforms that have these integration capabilities.  Customers today are getting information about who they should bank with from their friends and peers.  It’s not about setting up a shop window anymore and waiting for customers to come to you, it’s about making sure that your technology platforms are agnostic, agile and that they can integrate to where your customers are.

FST Media: What is proving to be your most effective customer acquisition channel and why?

Astwick: The most effective customer acquisition channel is from our existing customers. Having very high levels of brand attraction and net promotor scores means our customers are our best advocates. 

From a channel perspective, I would say that the most effective new customer acquisition channel is still our physical network.  There is still a vast majority of new customers to the bank who are acquired through our physical channels. However from a product acquisition point of view, particularly from our existing customers our digital channels are growing rapidly. Currently between 10 and 35 per cent, depending on product type, are sold to existing customers via our digital channels.

In the next three years, I believe digital will be the most effective customer and product acquisition channel. The customers are demanding this already, largely informed by the purchasing experiences in other industries outside financial services. In saying that, I think the secret sauce for Banks is how they fuse people and digital together in a unique way that will be key to their long term success.

FST Media: How will Kiwibank’s SAP core banking system deliver value to the business over the next few years and how will you measure the success of this?

Astwick: We see SAP in two ways.  We see SAP as a technology e.g. as a core banking platform and as a long term core banking partner. We see this combination as being able to provide us long term productivity benefits, lower cost scale, agility and to take us into new markets given they have capabilities that we don’t possess today.

FST Media: How do you encourage a culture of innovation within your team?

Astwick: I think the key word there is ‘culture’ and culture is often the fundamental link – everything comes back to culture and leadership.  Our view, quite simply, is innovation can’t be switched on.  It doesn’t happen in a function of an organisation – a department of innovation never works.  It has to be deep and buried in the leadership and into the culture.

It has to be comprised of an openness and collaboration in the work culture, but we also have to be encouraging our team to challenge the norms and the way things are [traditionally] done.  Innovation needs come from an understanding of the regulatory environment, as well as understanding customer needs. However, it also has to be harnessed by a higher purpose and that’s the context from which innovation can come. At the end of the day, the frame in which we’re looking to innovate is to make sure that our proposition of ‘Kiwis making Kiwis better off’ comes to fruition. 

FST Media: How do you define success?

Astwick: Success can be measured in many ways.

Financial Service is an annuity business. Therefore the key value driver is customer loyalty and advocacy. Success therefore ultimately comes down to how effective you are in keeping customers with you for a long time and having most of their business with you. The second point would be the level and your track record of financial performance.  You do need a strong financial performance to be able to effectively compete over the long term.

The third factor important to us is do people want to work at Kiwibank?  Having a culture where people want to and can do their best work in a truly authentic way is a critical success factor.

The fourth factor is market relevance, looking at what is the strength of your place in the market you operate. This is one of my core principles.  A brand is, by definition, what people are saying about you in the marketplace; so what is the strength of your market position, your uniqueness, your brand relevance and what people are saying to you is critical to your success.

FST Media: Every leader has a legacy that they wish to be remembered for. What is yours?

Astwick: I have really enjoyed that last 12 years at Kiwibank working with a number of great people to build a Bank in New Zealand that Kiwis can be proud of and identify with. But the job is far from done. My legacy would be to ensure we navigate Kiwibank to be a truly great company and a strategic asset for New Zealand’s long term prosperity.   

Nick Astwick will be speaking at FST Media’s 8th annual Technology & Innovation – the Future of Banking & Financial Services conference in Auckland, in addition to a distinguished panel of executives across financial services on September 17.