Kiwibank says less need for branches
KIWIBANK says the number of customers using its branches has halved since 2015 and that fewer than 5% of customers use a branch as their only means of interacting with it, the bank’s chief customer officer Mark Stephen told a parliamentary select committee.
Mr Stephen and executives from New Zealand Post including acting chairwoman Jackie Lloyd were before the Economic Development, Science and Innovation Committee to explain why New Zealand Post was closing so many branches.
Until recently, all Kiwibank’s physical branches were in NZ Post stores.
Mr Stephen said Kiwibank was adapting to suit changing customer preferences, although it did still see a role for physical branches.
In Ashburton, for example, where NZ Post had closed its branch but appointed two new franchisees with stores within 400m of the old branch, Kiwibank was planning to open a new standalone store, once it secured suitable premises, he said.
National Party MP Brett Hudson questioned whether closing physical branches was giving other banks a chance to steal a march on Kiwibank, or whether it was ‘‘simply ceding market share’’ and whether it was still able to provide customers with the same level of service.
Mr Stephen said Kiwibank was ‘‘a challenger and we will be a challenger’’ and that was one reason why it was opening standalone branches independent of NZ Post.
‘‘It does mean we see a role for a physical presence,’’ but that it would be a matter of balance and ‘‘will be driven by the changing needs and preferences of our customers’’.
Mr Stephen acknowledged ‘‘there’s always risk in change,’’ but that Kiwibank’s experience so far had been that any loss of customers due to branch closures had been modest.
Both NZ Post and Kiwibank had been consulting with local communities and conducting other research before closing branches — ‘‘these are not decisions we’re making on the fly,’’ Mr Stephen said.
Ms Lloyd told the committee the postal service had 79 stores remaining and that it did plan to continue closing stores.
The business was handling a million fewer items a week and losing $30 million in revenue each year.
Nevertheless, moving from companyowned branches to franchised stores was not only reducing costs but also offering customers better service through longer opening hours.
For franchisees, taking on an NZ Post business to augment their business — usually bookshops or pharmacies — provided the benefit of exposure and more foot traffic, Ms Lloyd said.
In some cases, single branches had been replaced by two franchisees. NZ Post now had 880 franchisees. — BusinessDesk