The news this week that BNZ is to close 38 of their bricks and mortar branches across the country should come as no surprise to anybody. Eight branches will be gone by Christmas; 30 will disappear over the next year.
True, it goes against the pledge made by the bank that there would be no regional branch closures until 2022, but it was clear the bank was looking to divest itself of expensive real estate and do away with profit-draining face-to-face customer encounters. Covid just allowed them to get away with doing it sooner than they'd promised.
Covid changed everything, according to BNZ's chief customer officer, Paul Carter. Our customers, he said, have embraced digital services and tools and our bankers are serving customers irrespective of where they are.
Well, not strictly true. According to the bank's own numbers, three quarters of its customers are down with internet banking and phone banking. That still leaves a quarter who are not, and listening to the callers to my show on Friday, the reasons were myriad and varied. And their experiences went across all the major trading banks, not just BNZ.
Other banks have, are, and will be closing branches across the country. Just last week, I went next door to where my local Kiwibank is conveniently located to pick up a replacement debit card – only to find it had vanished, along with the one up the road.
I seldom need to step inside a bank – I just didn't want to wait for a card to be posted out – but there are still many people who need the security of a branch staffed with humans. And they're not all antediluvian technophobes who simply refuse to get with the times.
People who lived rurally said the internet was sporadic in their area and telephone coverage was patchy. Others had dyscalculia – like dyslexia but with numbers which meant they needed people to double check they'd entered numbers correctly. In the past,
they'd been able to ask the tellers to fill in the forms; increasingly, it's been difficult
for them to do that as the tellers are being told to steer them towards ATM machines located within the branches. Some on a pension said they simply couldn't afford an internet connection, others had crippling arthritis that made it difficult to punch in numbers or type. There are the partially sighted, those who been burned once with online scams and who are fearful of being burned again.
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As I say, the reasons were varied and, I think, legitimate. However, genuine concerns or not, the future of banking is online. Calls from people for a New Zealand-owned bank that will establish itself in the regions that have been abandoned by the big four should remember that was exactly the reason Kiwibank was established.
In 2001, then deputy prime minister Jim Anderton proudly laid out his vision for a Kiwi bank that would provide enough local branches for customers and give better service than the overseas banks. New Zealanders, he said, were sick of branch closures and staff being laid off in their thousands and a Kiwi bank, he said, would provide a new direction.
That was nearly 20 years ago, and Kiwibank, as I discovered last week, has seen the writing on the wall and is reducing its bricks and mortar presence along with the other banks. E tu, Kiwibank, e tu.
The banks are trying to help those customers who feel they're being left behind. ASB has a priority line for vulnerable and elderly customers; Westpac was offering in-branch tutorials to help people understand online banking. All the banks are doing their best to get people online. It's more convenient, they say. It gives people more options. This is
true – but really, it's not about us. It's about them.
What they neglect to say when they're talking up the benefits of technology is that its waaaaaay more profitable for them to have us online – so profitable that some banks were offering staff incentives to steer customers away from traditional accounts and into digital
banking. And they've been doing that for years, long before Covid.
I hope the banks continue to look after those that have been left behind but I can see, within the next decade, bank branches will become like video stores. They will only exist
in the stories we tell our grandchildren about how things used to be done in the quaint, anachronistic past.