Mark Wilkshire, chief executive of The Co‑operative Bank explains why he believes bank customers have more power and choice than they might think.
Here's a simple unequivocal fact. Banks play an important role in most, if not all, New Zealanders' lives. But what's less simple is how New Zealanders feel about our banking sector and their own power as customers to effect change.
Our first bank account is a rite of passage – often set up by new parents in the first year of babies' lives.
Many older Kiwis still fondly remember those childhood piggy banks, savings accounts, and (if you've been banking long enough, like me) school bankbooks. And many Kiwis will still be with that same bank, 20, 30, or 40 years later.
But few might still feel as fondly about their banks.
There's no question the banking sector is coming under increasing scrutiny in New Zealand. Media are reporting almost daily on rising interest rates, margins, and bank profits.
A common narrative from media, politicians, consumer advocates and bank customers is that our banking system needs to change. We hear customers saying they deserve better from their banks. They want to be treated fairly, they want competition and choice.
The Commerce Commission has stepped in to conduct a Market Study into Personal Banking Services, to get under the hood of issues around competition, and consider some outcomes of that process including bank profits.
As the Chief Executive of a customer-owned New Zealand bank, I believe customers deserve better. The Co‑operative Bank has welcomed the Market Study on behalf of our customers. We hope it will help bring more transparency and a fairer, more competitive environment.
If customers want to be able to switch to a trusted and stable NZ owned bank that treats them fairly, keeps profits in New Zealand, and even shares profits with customers, we want that for them too.
But we also want New Zealanders to know they don't need to wait for the outcomes of the Market Study in order to receive the choice, control and fairness they're hoping for.
As a bank customer, you already have more choice and power than you might think.
New Zealand banks already have an established switching regime for transactional and savings accounts. It's a process administered by the banks, largely behind the scenes, and customers need to do a lot less than they might think.
Pick up the phone, open the app, or walk in the door of the new bank you choose, set up an account, complete a simple switching form, and banks sort out the rest. Your new bank will (behind the scenes) request and arrange the seamless transfer of funds, along with your direct credits, automatic payments and even your saved payees. Even if you've saved scores of payees, they'll be there in your new account. You don't even have to contact your old bank to break up with them.
And you don't need to wait for regulatory change to usher in a new kind of bank that exists for its customers, puts people before profits, and will even share profits with you. We already exist too.
In the last financial year, at The Co‑operative Bank, we made a fair and reasonable before tax profit of $20.6M and from this we returned $2.5m to our customers as profit rebates. More money for hard working New Zealanders and their families.
We have returned $20 million to customers since we started the customer rebate scheme in 2013. Profit not returned to customers is re-invested into the co-operative to enable us to develop future products and services for the long-term benefit of our customers. It all stays in the co-operative and in NZ.
Success at The Co‑operative Bank isn't solely about profit. It's about customer satisfaction and people engagement, balanced with the profitability we need to help ensure the long-term stability and sustainability of the co-operative. We're also B-Corp certified – which means meeting a high standard for verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose.
Importantly, we know our customers value not having to choose between good value and great service - we've been rated #1 two years running in the Consumer NZ People's Choice Awards, and customer research shows customers are more likely to recommend The Co‑operative Bank than any other NZ bank.
As a bank customer, you have power and choice. It's over to you to use that.
*Mark Wilkshire is Chief Executive of The Co‑operative Bank. The Co‑operative Bank is owned by its customers, everyday New Zealanders, and is committed to helping New Zealanders bank better