ANZ relaunches in NZ to improve poor image

By NZPA

Wednesday 10th July 2002

ANZ Bank today has recognised its poor image with its customers with a radical revamp of account offerings including substantial fee reductions.

Although New Zealand does not have Australia's Bastard Bank of the Year award, ANZ would have won it in a close tussle with WestpacTrust over the last few years according to surveys by Consumers' Institute and Auckland University.

"We're aware of people's attitudes towards banks, so we're changing ours," said the ANZ publicity blurb to go with the relaunch.

ANZ hotly denies the relaunch is in response to the entry of Kiwibank into the market. It says ANZ Bank has made similar moves in Australia and began planning the project nine months ago, before the Government decided to proceed with Kiwibank.

But Consumers' Institute chief executive David Russell said there was little doubt Kiwibank with its lower fee structure, lower mortgage rates and local ownership was making an impact.

"If they are in the business of retail banking they can't afford to sit back and ignore the new competition and in particular home grown competition."

He said Kiwibank was offering things other banks could not offer included an edge with its new technology.

Mr Russell welcomed ANZ's moves which will be offered from Monday. A major advertising campaign begins on Sunday.

"Attitudes are not good and, within the banking community, the ANZ is near the bottom.

"I'm encouraged that the ANZ is recognising that the greater number of their customers are dissatisfied by comparison with other banks. I give them a big tick for recognising the problem they face and for doing their best to remedy it."

ANZ, which is the most profitable of New Zealand's banks and has a buoyant share price, said the move will initially cost it on the bottom line. But it knows that having high dissatisfaction levels with its 650,000 customers is unsustainable long-term.

"In such a competitive market, that's is just not viable for a retail business," said ANZ public affairs manager Steve Fisher.

Retail banking products manager George Vice said that rather than tinkering with existing accounts as the bank had attempted in the past, it decided to go back to the drawing board.

At present ANZ is second in number of customers behind WestpacTrust, but is only fourth is "share of wallet".

While it has 1.1 million customers in all, ANZ sells each customer only one to 1-1/2 of its products against some banks selling three or four. The new strategy hopes to improve things for ANZ. That should help compensate for the lost fee income.

A key driver of share of wallet is customer satisfaction. ANZ staff will be given incentives based not just on sales but on customer satisfaction.

Much of the dissatisfaction is based on the feeling that ANZ had many accounts on offer but they were basically the same.

The new offering is simpler and gives customers three distinct choices.

The "Control" account is a user pays one where customers pay per transaction. Electronic transactions will cost 50 cents and staff-assisted ones will cost 75 cents. The $3.50 monthly service fee is wiped. A small interest payment of the account will also be wiped.

The "Freedom" account has a flat monthly fee of $19 for manual and electronic transactions including non-ANZ ATM charges.

The "Thrifty" "cheap as chips" account has no monthly fee, allows 10 free electronic transactions a month and charges 60 cents for each subsequent electronic transaction and $3 for a staff-assisted one.

As a next step ANZ is looking at allowing some customers to tailor accounts to personal needs. It is also piloting letting front line staff have far greater decision making power.

ANZ's move comes as WestpacTrust said it would abolish a waiver of its $3.50 monthly fee for customers with more that $1000 in their accounts.

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