ANZ Alerts Customers They Are Turning Off Paper Statements

ANZ customers are receiving emails advising that the bank will turned off paper statements, unless customers click on the link to retain paper distribution. And there is a short cut off date beyond which you need to log into your account to set preferences. Asking to click on a link from an email is in my view inept, in the era of spam or worse, this is not good practice.

This forced migration may save the bank costs, and for some will be convenient, but for those who need physical statements for audit purposes, this is a problem. In addition, people who are not regularly online (yes there are still many who do not use email regularly, even if they are social media), may miss the change and discover an absence of statements down the line.

We wonder if the ANZ will start to charge for paper production later, we hope not, as this would be a further degradation of service.

It seems to me, the bank should have worded its communication more positively, because this comes across as a high-handed action, without taking customer needs into account. One more example of poor culture.

It is probably true that some would be too lethargic to make the switch to digital statements, without a prod, but this approach from the ANZ will be seen by many as just another example of them not thinking about things from a customer’s point of view. It shows that bank has a long way to got to win back customer favour.

A better way would be to incentivise people to switch by sharing some of the cost savings with their customers who elect to go for online statements.

 

 

What The Removal Of ATM Fees Really Means

The CBA led move last weekend to abolish foreign ATM fees, which was quickly followed by the other majors and Suncorp is a benefit to those using other banks ATMs to withdraw cash, and will be especially welcome in regional and rural areas, where travel times to own branch machines tends to be extended.

We showed that the volume of cash withdrawals is decreasing.

ATMs are now a legacy banking artifact, to be managed not for strategic advantage (replacing more expensive branches) but to reduce costs, as it is being replaced by electronic payments, pay waive and mobile devices.

The timing, I suggest, rather than being a deliberate attempt to distract from the BEAR proposals which were released by the Government a couple of days before; is more an outworking of recent discussions, centered on driving more cost savings from the ATM system.  The fact is ATMs are expensive animals to service, not so much from the technology point of view, but because the cash cartridges need to be physically replenished, which requires a small army of security guards, vans, and a supply of fresh notes. Remote ATMs are especially costly to service. Many are outsourced.

We examined the Point of Presence Data from APRA which includes counts of ATMs, listed by bank, and other provider.  This annual report is helpful when exploring distribution strategy, though the format will be changed this coming edition. We have data to 2016.

It shows that between 2014 and 2016 there was a 3.5% fall in the number of ATMs operating, with a total count of 14,293. We lost net, net around 500 machines in 2 years.

We then looked at the major banks, and Suncorp. Suncorp was responsible for a net 152 reduction, followed by Westpac 88 and ANZ 43. NAB grew their fleet by 45 and CBA by 7.

The state by state data shows that Queensland lost the most machines, down 165, then NSW 118, WA 98 and SA 76.  By bank, CBA, NAB and ANZ grew their footprint in NSW, while WBC and Suncorp cut machines significantly there.

Now, the point of all of this is that given falling transaction volumes, we expect the number of ATMs to continue to fall.  The removal of “foreign” ATMS fees allows consumers to use any ATM within reach. As a result, banks can with some justification say that therefore multiple ATMs in a location are no longer required. As a result I expect a rush of closures, with the aim of not being the “last man standing” effectively holding the community service obligation in a given area.

So, in my view the ATM fee story is more about managing down legacy systems and costs than providing customer benefit.  Think of it as a utility service.  The Banks should consider formalising this in my view!

You could argue, provided you can still get cash, you may not care, but of course if there is a single machine in town, it is also a point of single failure, especially over a long weekend!

As always, there is more behind the PR than first appears….

 

 

 

 

 

Suncorp removes ATM fees

Suncorp will remove fees for all non-Suncorp customers so that no  customer pays an ATM fee anywhere in Australia.

Suncorp Executive General Manager Deposits & Investments, Bruce Rush says the change will deliver greater value to all banking customers while increasing the availability of fee-free ATMs across the country.

“Suncorp supports fee-free ATMs and we will implement this change in early December to coincide with other positive changes, including updating technology and enhancing customer experience which is already planned for our ATM network,” Mr Rush said.

“It is great to see all Australians benefit and we are especially pleased for Suncorp customers who live in locations where there are limited options to withdraw cash.”

… As Does Westpac

All the major banks have removed foreign ATM fees. The ABA welcomed the move.

Statement from Anna Bligh, Australian Bankers’ Association Chief Executive:

“The ABA welcomes the announcement from the major banks today to abolish ATM fees.

“It’s a boon for customers and makes banking more affordable for everyday Australians.

“This is the latest in a suite of initiatives by banks to create better products and services for customers and boost customer choice, including reducing interest rates on credit cards and offering fee-free transaction accounts.

“A competitive banking system is good for customers and good for the sector.”

NAB Joins the ATM Fee Cuts

NAB has today announced it will remove ATM withdrawal fees for everyone using any of its NAB ATMs around the country.

Already, NAB customers using NAB ATMs incur no cash withdrawal fee.

“We’re pleased to now extend this so that all Australians, regardless of whether they bank with NAB or not, can use any of our ATMs and not be charged a cash withdrawal fee,” NAB Chief Customer Officer of Consumer Banking and Wealth, Andrew Hagger, said.

“This is a good outcome for customers. We know it has been frustrating for them to be charged to withdraw their own money from an ATM, and the change we are announcing today will benefit millions of Australians.

“At NAB, we’re proud of our track record of making banking fairer over many years, and we will always look at how we can improve the experience and services we provide customers.”

Since 2009, NAB has led the industry by removing many of the fees and charges that annoy customers the most, and NAB remains the only major bank to have a transaction account with no monthly account service fee, saving customers around $5 every month.

“NAB’s commitment is to back our customers by continuing to listen to them, and respond to their concerns and needs so we can be a better bank,” Mr Hagger said.

ANZ Also Will Abolish ATM Fees

ANZ today announced it would remove fees for all non-ANZ customers using its fleet of automatic teller machines anywhere in Australia. The change will impact non-ANZ customers who are currently charged a $2 fee when they use an ANZ ATM.

ANZ customers are not currently charged when they use one of ANZ’s more than 2,300 machines. ANZ Group Executive Fred Ohlsson said: “While we had been actively working on how we provide fee free ATMs for our customers, we have decided to remove these fees all together from October.

“We know ATM fees are one of the most unpopular and while our customers have benefitted from our network of ATMs across the country, this is another example of acting on customer feedback as well as genuine reform from the industry,” Mr Ohlsson said.

The change will be implemented in early October 2017.

CBA Axes “Foreign” ATM Charges

The CBA today (yes on a Sunday!) has announced they are killing the ATM charge incurred by non-CBA customers withdrawing cash from their ATMs.

In a first for an Australian bank, Commonwealth Bank has removed ATM withdrawal fees so all CommBank and non-CommBank customers won’t be charged an ATM withdrawal fee by us when they take cash out at any of our 3,400 ATMs.

RBA data shows that Australians made more than 250 million ATM withdrawals from banks other than their own last year so the move is designed to increase convenience and bring savings.

“Australians have complained for some time about being charged fees for using another bank’s ATM,” Matt Comyn, Group Executive, Retail Banking Services, said today.

“We have been listening to consumer groups and our customers and understand that there’s a need to make changes that benefit all Australians, no matter who they bank with. This is one of the steps we’re taking to make that happen,” Mr Comyn said.

“As Australia’s largest bank, with one of the largest branch and ATM networks, we think this change will benefit many Australians and hopefully demonstrate our willingness to listen and act on customer feedback.”

No ATM withdrawal fee access applies to CommBank-branded ATMs and excludes Bankwest ATMs and customers using overseas cards.

The number of withdrawals from ATMs (and the number of ATMs in use) are falling, as other non-cash payment mechanisms proliferate – such as pay wave, debit cards and mobile payments.  We expect the downward trajectory to accelerate as non-cash alternatives continue to grow. Customers can also get cash out at supermarkets, and this alternative has become popular for those who need to get their hands on real notes.

Under half have a charge attached, those are withdrawals from another bank’s ATMs.

As we said in a recent post there is a generation shift in play as digital natives continue to adopt smartphone based payment options, from Applepay, to NFC transactions in shops, or apps like paypal as well as the move to debt. Even digital migrants are using electronic mechanisms, such as smart phones, internet banking, contactless payments and Bpay is also a popular option.

Data from the RBA shows the volume of ATM cash withdrawal transactions has fallen by 15% over 3 years, whilst the gross value has slipped a little (and fallen in post-inflation adjusted terms). Debit card transactions are more than taking up the slack. But there is also more going on here.

We are approaching a tipping point where the economics of ATMs will not make sense, other than at a few high traffic locations, as there a fixed costs relating to installation and maintenance (including the cash top-up) and income is linked to volumes. There was a proliferation of third party ATMs in for example retail sites in the 1990’s, but these are getting less use too. So we think the number of machines will fall.

Meantime the ubiquitous smart phone is set to become your personal finance assistant, your electronic wallet and electronic credit card. Just do not lose your phone!

As a result, traditional channels such the the branch, ATM and even plastic are all under threat. Cash will become less important in every day life, but it will remain, used perhaps by people less comfortable with the technology, or in the black economy. It would not surprise me if down the track larger bank notes started to disappear under the guise of migration to digitally based more cost-efficient payment solutions, which just happen also to be easier to track.

Meantime, the ATM just got out-evolved by the smartphone.

Around $500 million was charged by banks to customers, and the average fee is $2 per transaction.  CBA has the largest fleet of ATMs across the country, with more than 3,400.

This is a move which was expected, given there are overseas precedents to removing ATM fees, and volumes are falling.  Of the 70,000 ATMs in the UK network, around 16,000 charge users a fee per withdrawal.

CBA will hope to gain a positive reaction, to counter the recent negative publicity surrounding its business.  It will be interesting to see if other banks will follow (some will require IT modifications, so it may take some time), we suspect they might, which would be a small win for consumers.

 

 

 

DFA’s SME Report 2017 Released

The latest results from the Digital Finance Analytics Small and Medium Business Survey, based on research from 52,000 firms over the past 12 months, is now available on request.   You can use the form below to obtain a free copy of the report.

There are around 2.2 million small and medium businesses (SME) operating in Australia, and nearly 5 million Australian households rely on income from them directly or indirectly. So a healthy SME sector is essential for the future growth of the country.

However, the latest edition of our report reveals that more than half of small business owners are not getting the financial assistance they require from lenders in Australia to grow their businesses.

Most SME’s are now digitally literate, yet the range of products and services offered to them via online channels remains below their expectations.

More SME’s are willing to embrace non-traditional lenders, via Fintech, thanks to greater penetration of digital devices, and more familiarity with these new players. In addition, many firms said they would consider switching banks, but in practice they do not.

Overall business confidence has improved a bit compared with our previous report, but the amount of “red tape” which firms have to navigate is a considerable barrier to growth.

Running a business is not easy. In some industries, more than half of newly formed businesses are likely to fail within three years. We found that banks are not offering the broader advice and assistance which could assist a newer business, so even simple concepts like cash flow management, overtrading and debtor management are not necessarily well understood. There is a significant opportunity for players to step up to assist, and in so doing they could cement and strengthen existing relationships as well as creating new ones.

We think simple “Robo-Advice” could be offered as part of a set of business services.

The sector is complex, and one-size certainly does not fit all. In this edition, we focus in particular on what we call “the voice of the customer”. In the body of the report we reveal the core market segmentation which we use for our analysis and we also explore this data at a summary level.

Here is a short video summary of the key findings.

The detailed results from the surveys are made available to our paying clients (details on request), but this report provides an overall summary of some of the main findings. We make only brief reference to our state by state findings, which are also covered in the full survey. Feel free to contact DFA if you require more information, or something specific. Our surveys can be extended to meet specific client needs.

Note this will NOT automatically send you our research updates, for that register here.

ANZ first Australian bank to roll out Voice ID for mobile banking

ANZ says it will today be the first Australian bank to roll out Voice ID technology on mobile banking enabling customers to complete higher value transactions conveniently and securely.

With Voice ID, ANZ customers can now make ‘Pay Anyone’ payments of more than $1000 on their mobile without needing to log into internet banking, or remember additional passwords or PINs, or visit a branch. They can also use Voice ID to make BPAY payments of more than $10,000 on their mobile.

Commenting on the announcement, Managing Director Customer Experience and Digital Channels, Peter Dalton said: “This is a significant security update that will make it easier for our customers to complete high value transactions on their smartphones.

“Customers increasingly want the convenience of banking on their digital devices and this solution delivers that with the added level of voice biometric security.

“This will be particularly good news for our small business customers who regularly need to make payments of more than $1000 on the go and will only need their voice to authorise those transactions.”

The rollout comes after ANZ completed a successful pilot program with the new technology in recent months and will be available for customers using the Grow by ANZ app from today. It will then be rolled out to other digital channels across the bank.

ANZ has developed Voice ID with world-leading voice biometrics company Nuance to bring the new technology to Australian customers.

Nuance managing director Aust & NZ, Enterprise Division Robert Schwarz said: “ANZ is taking a forward-thinking yet secure approach to identity verification with Voice ID, making it fast, easy and secure for customers who are on-the-go to perform high value transactions.

“Through the ANZ mobile banking app, Voice ID uses proven voice biometric technology from Nuance that is more secure and more convenient than legacy authentication methods.”

NAB Launches Virtual Banker For Business Customers

NAB says it is the first bank in Australia to launch a digital virtual banker specifically for business customers, enabling them to receive instant answers and assistance with common banking questions and tasks.

NAB’s virtual banker is in pilot and available 24/7 on nab.com.au, providing help with more than 200 common questions related to the servicing of business banking accounts.

NAB Chief Operating Officer Antony Cahill said the development of the virtual banker continued NAB’s commitment to providing leading solutions that make life easier for customers.

“Our research shows that two thirds of Australian SMEs cite dealing with administrative tasks as taking a lot of effort, and our customers desperately want to spend more time on their business and less time on dealing with admin tasks.

“’We’re working hard to make banking an easy and supportive experience for our customers and technology like this helps save business customers critical time. When they have a question about their banking, our virtual banker is there to help solve it 24 hours a day, seven days a week; it’s a simple and seamless on-the-go experience.

“We will continue to develop the virtual banker over coming months, enabling an even broader and more diverse range of instant answers and guidance for business customers.”

The virtual assistant’s artificial intelligence is derived from thousands of real-life customer enquiries. There are more than 13,000 variants of the 200 questions the virtual banker can answer; if the question can’t be answered, the customer will then be directed to a human banker.

Customers were involved in the testing and development phase, with more than 75 per cent saying a virtual banking was a highly desirable offering that would help them with their banking needs.

Part of NAB’s delivery of new customer self-assistance also includes walk-through tutorial videos for NAB Connect users. The short step-by-step videos help customers understand how they can use and take advantage of the platform’s wide capabilities, with tutorials that help with common tasks like ‘adding users’ or ‘setting up reoccurring payments’.

The initiatives are just two examples of the many that have been developed by NAB’s Customer Journey teams, who are reimagining specific customer experiences.

“We currently have a number of different streams of work underway with almost 1000 employees across various areas of the bank – from bankers, to product specialists, marketing experts and technologists – working together on these projects and delivering at pace,” Mr Cahill said.

Hear from NAB’s EGM Business Transformation Anne Bennett talking NAB’s new Virtual Banker