Leading questions: ASB boss Vittoria Shortt says Kiwis should still be mindful about a potential downside in 2021

ASB bank CEO Vittoria Shortt. Photo / Supplied

ASB chief executive Vittoria Shortt talks about the challenges for the banks in 2021 and how New Zealand can get ahead.

How would you describe 2020 for your business?

Firstly, I think it is important to recognise that Covid-19 impacted Kiwis in very different ways. For some it brought isolation from family and friends, for others the anxiety of health concerns or loss of employment; some businesses were not impacted significantly and yet others faced closure. The effects of this pandemic have been broad and uneven – which has been important to understand as we have worked through how to best support our people and our customers.

When Covid-19 struck, we mobilised quickly to change the way we worked and how we supported customers. We moved our 5000 people to work from home within a week. We helped over 31,000 customers and provided relief on more than $11b of lending. Beyond financial assistance we created a hub with cashflow tools, digital tools, and leverage of our sponsorship assets to help New Zealand businesses. Along the way we found more effective ways to work and we made some of those changes permanent, such as a dedicated 0800 line for customers over 65 or those who need extra support; and we now have more flexible ways of working for all our people.

We didn't lose sight of the important role we play in supporting the community. We were able to build on our strong community relationships, delivering extra support for St John while they were doing critical work on the front line. Our Community Council proved invaluable in helping us meet the needs of customers facing vulnerability during lockdown.

Despite all of the disruption that Covid-19 brought, and perhaps because of it, we delivered more for our people and our customers than ever before. More ways to provide support, more products and more services.

How do you think the Government has handled the Covid-19 crisis?

The Government acted quickly and decisively. The timeliness of the wage support scheme payments, in some cases within hours of application, made a big difference.

I also thought the way the Government, banking regulators and the banking Industry worked together for the benefit of supporting Kiwis to get through was important part of our recovery so far.

What are two key things the Government should do for economic recovery?

It has been encouraging to see how the Government has been focusing on finding options to assist the economic recovery. Naturally, the sooner there is clarity, the faster this will translate into confidence, investment, and a continued recovery. This is particularly important for industries that face the greatest uncertainties (e.g. tourism, international education, agriculture) and management of border (how tourism and education sector will be opened up, access to skilled immigrant workers to fill domestic shortfalls).
Real success will be a sustainable recovery – economically and environmentally. Addressing productivity through infrastructure investment and digital must be high on the list along with climate change.

How is your business planning to tackle 2021?

By global standards, New Zealand might have weathered the pandemic well so far, but many businesses have been hit hard. Supporting Kiwi businesses, families and individuals as we reorient to the "new normal" remains front and centre for us at ASB.

We will be looking for opportunities to continue to innovate and find new solutions to tackle the big topics such as the housing market and first home buyers; the challenges and opportunities of low interest rates for investors; and helping our business customers build resilience.

What will be the major challenges and/or opportunities for your industry?

The rebuild of our economy presents a unique opportunity for New Zealand to build a more productive and resilient economy, for the benefit of all New Zealanders. There is an opportunity for Government and the private sector to collaborate here.

With Covid-19 expected to have a long tail it is critical we continue to ensure Kiwis and their businesses remain supported. Particularly as support packages come to an end.

I do see a real opportunity through the challenge of addressing the physical and economic effects of climate change and ensuring a balanced and sustainable housing market. A key focus area for us is helping first home buyers to get on the property ladder.

Also, the face of banking is continuing to change. Banks have evolved from the branch being the single point of access for everything, to customers using a range of channels including contact centres, mobile workforces, automated transactions, mobile apps and online banking. Over the past four years we have seen branch use decline 32 per cent. The opportunity is to demonstrate what the future of banking looks like. The regional banking hubs are a great example of this.

What was the most interesting non-Covid story of 2020?

For me, it was working with the terrific team at Eden Park to secure the one-off, world-first Eden Park naming rights opportunity and then gifting it to a small business from Kaikōura, as a symbol and reminder to support small businesses. And to top this off, the All Blacks played brilliantly and won at the Coopers Catch Park.

Where are you holidaying this summer?

I'm taking a break in the South Island with my family. It will be all about hiking and mountain biking, maybe a bit of fishing and swimming. We will have four generations together to celebrate the festive season. But like many, we will be missing family who live overseas… nothing a few more Zoom calls can't help with.

What are your predictions for 2021?

After the year we've all just had I expect a period of consolidation, following the 2020 post-lockdown rebound and sugar-rush hit from the high degree of fiscal and monetary support pumped into the economy.

Hopefully the global and national roll-out of the Covid-19 vaccine will help us open our borders, but if not, we can expect "muted" 2021 economic growth of around 2 per cent annualised if the borders stay closed and unemployment rises.

On the upside as we prepare to wave goodbye to 2020 New Zealand has been surprising everyone – including economists. Yet, looking ahead no doubt every one of us will be mindful about the possibility of any unforeseen downside to 2021, so I think planning for different scenarios is important for households and businesses alike.