State-owned Kiwibank is shifting its focus from winning new customers to "farming" more value from existing clients.
Appearing before a select committee this morning, the NZ Post chairman Sir Michael Cullen said a smaller proportion of the 850,000 Kiwibank customers used it as their main bank than customers of the "big four" banks.
Kiwibank, a subsidiary of NZ Post, was reaching maturity as a retail bank, and was "capital-constrained", he said.
But there was scope to increase value by selling credit cards, insurance and other financial products to existing customers who were "not being fully farmed".
Cullen said the culture now had to change because it was no longer a small bank growing rapidly. Its retail approach was service, not sales-orientated, but with increasing online use people were handling most services themselves.
The bank was also looking at replacing its IT system, which had been designed for Australian credit unions with up to 250,000 customers, and would announce the supplier next week. Ideally customers would not notice the change.
Referring to NZ Post, Cullen said the present method of mail delivery, using a postie and a bike, had probably come to its natural end and would change to someone on foot with a vehicle in support.
NZ Post was looking at what vehicles to use, including the options used in Norway and Switzerland,.
The planned move to delivery three days a week in urban areas, would change the delivery time for senders from three to four days so they needed to plan for the extra day.
But there would also be a premium option, yet to be priced, that would use the courier network to offer faster delivery.
NZ Post has announced up to 2000 jobs will go as a result of the restructuring, prompted by falling mail volumes.
Cullen said the decline in letter volumes was running at about 8 per cent a year.
The government-approved changes to the way NZ Post operated, including mail delivery changes, had changed the value of the core business from negative $285 million to positive $250m.
NZ Post chief executive Brian Roche said the company was seeing a big increase in parcel volumes, including into the country, as retailing moved online and became globalised.
The trend was for NZ Post to transfer goods from the warehouse to the household, bypassing the retailer.
- © Fairfax NZ News