New Zealand may be best known as the backdrop for the Lord of the Rings movies and for its large population of sheep — it has 40 million sheep, 10 sheep per person. But New Zealand and Australia are also where some of the most ground-breaking financial technology is pioneered, from cloud computing to mobile payments to videoconferencing.
Bank of New Zealand has moved all of its small business bankers to a centralized hub from which they communicate with clients through videoconferencing hookups in the branches. Customer satisfaction, profitability, and the number of small business customers have all grown substantially.
Next year, BNZ will begin providing video banking online. This will let the small business owner connect through videoconferencing with a specialist business banker from his laptop, iPad, Surface tablet or other video-enabled device anytime from 7:00 a.m. to 10 p.m.
"In 2009 we took a look at how we service small business customers," Harry Ferreira, head of small business banking at BNZ, recalled this week in an interview at the Small Business Banking Conference in Boca Raton, Fla. "Customer satisfaction was low, productivity was low." The bank's small business market share was 15%. When surveyed, small business customers said they wanted better accessibility, simple pricing, easy-to-understand products and better advice.
Since deploying videoconferencing and incubator-like spaces for small business clients in all its branches, BNZ has seen a 22% increase in customer satisfaction. Its market share has grown to just under 24% and it moved from being the fifth (and last) in small business banking to second bank among New Zealand's five banks.
"We doubled the number of small business customers we have — it was 48,000, now it's just under 90,000," Ferreira says.
He estimates that staff productivity among small business bankers has improved eleven-fold. Return on investment for the bank's small business line is 22%.
People often ask Ferreira if something gets lost in the transition from dealing with customers face-to-face to videoconferencing. At first yes, but in the longer term, not at all, he says.
"The branch still connects people together," he explains. "We did lose some face-to-face interaction in the beginning until we got better at communicating what we were doing with employees internally and with customers through social media." Ferreira stars in a weekly internal TV show called Edge TV, in which he expresses his vision for small business banking to 5,000 employees. "Trying to get all the branch managers to understand and support what we were doing was a challenge," Ferreira explains. "But in every branch there will be one or two people who don't mind video" and those people help support the initiative. To improve customer communication, the bank set up a BNZ Connect forum where customers post what they think of the bank and staff respond in seconds.
Along with the video technology project, BNZ hired ex small business owners and taught them banking, so they could have empathetic conversations with clients. Existing small-business staff lacking that experience are sent to spent a week every year embedded in a small business, so they can understand its cares.
All told, 54 people work in the business specialist center and serve the telepresence setups in the branches. They conduct 10,000 video conversations with customers a week. "The specialists can have really in-depth conversations with small businesses," Ferreira says.
BNZ created Edge Centres within its branches that provide services to small businesses such as meeting rooms, free wifi, fax machines, and workstations they can use to check email and work. "Often small business customers are in industrial areas and they don't want to bring customers to their location," Ferreira says. "They can bring them here instead." The bank hosts Friday night get-togethers where small business owners can network with one another.
The bank also simplified products, and pared down its product line to those that seemed most relevant and understandable to small businesses.
In about nine months, Ferreira expects to roll out a version of small business videoconferencing for smart phones. He also plans to extend the videoconferencing approach to wealth management and property investment.
Ferreira's team tries about 60 new ideas every six months. "Innovation is in our Kiwi DNA," he says.
Why are New Zealand banks ahead of U.S. banks in these and other technology areas? "The big issue with American banks is an unwillingness to move," he says. "People get stuck in a big-bank mentality. But big banks can do this. This was not easy, it took tenacity and not caring what people are saying behind your bank. I also surrounded myself with wonderful people."
Two other bankers at the Small Business Banking Conference also talked about using videoconferencing to interact with small business clients.
CIBC has eight commercial bankers serving small businesses by phone and videoconferencing. Mike Marshall, senior director of small business banking, noted that, "People are much more comfortable talking to an expert who is confident and knows what they're talking about, even on a screen, than someone in a branch who doesn't understand small businesses and the products they use."
David Tremblay, business development and strategy executive of the client development group at Bank of America Merrill Lynch, pointed out that small businesses like to bank when it's convenient for them, which is not during traditional branch hours.
He also noted that his bank provides a choice. "Sometimes clients say, 'I'm old school, I want to look people in the eye, I don't have a computer,'" he related. "We don't cut people off from the branch."
Tremblay expects that within a year, banks will be offering small businesses videoconferencing from a smartphone. "If you're not including a video strategy in your phone strategy, you're missing the boat," he says.