New Zealand Retail Banking Competitor Benchmarking 2021
Summary
This report benchmarks the leading incumbent banks in New Zealand, comparing their financial performances, market shares, and customer satisfaction data, among other key performance indicators.
The swift and total lockdowns experienced across parts of Asia Pacific have somewhat shielded financial institutions from the worst effects of COVID-19. All banks in New Zealand registered an increase in total divisional assets (TDA) between 2019 and 2020. As low interest rates are likely to persist, incumbents should focus on increasing the proportion of non-interest income. Only ASB and Kiwibank were able to increase their non-interest incomes in 2020.
Scope
- The use of branch services post-lockdown in New Zealand has been relatively high for banks such as ANZ, BNZ, Westpac, and Co-operative Bank, a sign that customers remain in favor of branch services despite using digital channels more frequently in 2021. The use of telephone channels has fallen from 2020.
- All banks in New Zealand saw significant increases in digital channel engagement, but only ASB and TSB Bank were able to reduce branch visitation in 2021.
- Westpac has the lowest average customer satisfaction rate of 70%. It performs best in attributes related to digital products but scores lower with regards to in-person banking and branch and telephone channels, which are key attributes for customers in New Zealand.
- Gain an understanding of which banks in New Zealand are performing best and will continue to do so.
- Discover which banks are under threat and perceived as being behind the curve by customers.
- Understand the New Zealand retail banking landscape and how it may develop based on the key performance indicators included.
- Executive summary
- Financial Performance, Market Share, and Cross-Selling
- Incumbents in New Zealand have seen costs and impairments rise and net interest margins fall
- Table Incumbents in New Zealand have seen costs and impairments rise and net interest margins fall
- Incumbents performed strongest with retail deposits; BNPL is likely hindering credit card growth
- Table Incumbents in New Zealand have seen costs and impairments rise and net interest margins fall
- ANZ holds 32% of the current account market, with ASB, Westpac, and Kiwibank making up the remaining top four
- ANZ, Westpac, and ASB perform best at cross-selling multiple products, likely due to their wide range of integrated products
- Incumbents in New Zealand have seen costs and impairments rise and net interest margins fall
- Channel Visitation Trends and Digital Adoption
- Digital channel usage was accelerated by COVID-19 and increased in 2021 despite the relaxation of restrictions
- An average of 68% of customers prefer traditional providers over alternatives
- The pandemic did not drive an increase in mobile wallet usage in 2021
- Customer Satisfaction
- TSB Bank and Co-operative Bank have the highest NPSs in New Zealand, while ANZ and Westpac have the lowest
- Customers in New Zealand care most about competitive prices and easy digital banking
- TSB Bank and Co-operative Bank have the highest customer satisfaction for resolving problems easily
- Easy digital banking has become a critical success factor given the number of customers using online and mobile channels
- Easy-to-understand products have become a key metric of satisfaction as emphasis is placed on enhancing customer trust
- Helpful staff is a key factor of service for every bank in New Zealand, and all score highly The shift to digital channels has
- Customers are broadly satisfied with money management tools, but TSB Bank and Co-operative Bank perform worst here
- Incumbents in New Zealand are struggling to satisfy customers with loyalty rewards
- Scope remains for providers to offer a greater range of customizable products
- Customers are relatively satisfied with prices in New Zealand, with an average net satisfaction score of 79%
- Customers are not satisfied with digital-first offerings that prevent in-person banking
- Appendix
- Methodology
- Sample size
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