Kiwibank misses chance of tapping into online potential

By RICHARD WOOD

Kiwibank's reluctance to embrace the internet is discouraging the very customers it is trying to attract, says a leading banking commentator.

Limitations in the new bank's software mean potential customers cannot join online. The only way to open a Kiwibank account is at one of the seven pilot branches in Hawkes Bay and the Manawatu.

Would-be customers in the rest of the country will have to wait for nationwide branch openings in April and May.

Banking commentator Dr Mark Colgate, of the University of Auckland business school, said this would slow things "big time" for the bank.

"Even if you have all of your branches open, you can sign up only a limited number of people at a time."

He said the inability to become a customer through the internet was especially unfortunate because Kiwibank was targeting mortgage seekers in their late 20s to early 30s.

"That is the market they are really interested in, as indicated by the 6.1 per cent floating mortgage rate. These people are internet savvy and that's how they like to do their banking," he said.

At least two banks - ASB Bank and Bankdirect - let new customers join online.

Dr Colgate also noted that Kiwibank did not have its fee information on its web site when it announced its charges last Thursday.

Kiwibank external communications manager Bruce Thompson said this was regrettable and the information was made available at the weekend. It was a new website and it would be refined.

Mr Thompson said "point taken" in response to the suggestion that Kiwibank had missed an opportunity to sign up new customers, but said it was emphasising personal service.

"We're going to have more branches, more people, more face-to-face contact than any other bank in New Zealand," he said.

"We're pushing the fact that you can do your transactions and banking in your own neighbourhood with someone you probably know.

"Certainly people will use internet, ATM, and Eftpos, but the main drive is face to face."

Kiwibank's internet banking and telephone banking project leader, Bohdan Szymanik, said online sign-up was never planned for the launch, and was not possible in the current version of the bank's online software.

He said online sign-up was due in the next version, with the ability for existing customers to open more accounts online.

That might appear late in the year.

Another electronic limitation for Kiwibank customers is that they will be able to use only ATM Machines owned by WestpacTrust and ANZ .

Mr Thompson said there were no plans to include other major banks' ATMs.

"WestpacTrust and ANZ have the majority of ATMs," he said.

Kiwibank would not install its own ATMs, nor provide internal ATMs at Postshops.

"You can go to the counter," he said, or to a WestpacTrust or ANZ machine.

nzherald.co.nz/kiwibank