Six forces ‘reshaping’ the banking industry

by NZ Adviser13 Feb 2017
Almost all of New Zealand’s banks are Australian-owned and therefore face the same issues – most of these are global challenges that cannot be ignored.

A new report from PricewaterhouseCoopers delved into the performance of Australia’s big banks and identified six trends that are forcing them to consider how they operate today.

The Future of Banking through a Kiwi Lens looked at changes in demographics, technology and consumer behaviour; Asiafication; the impact of an interventionist Government; and a subdued macro economy. 

PwC partner and banking and Capital Markets Leader, said getting ahead of these trends and looking at them from a Kiwi perspective is really important for our own banking sector. 

“When we look at the report, we see six big trends affecting the financial sector. All of these can be looked at through a New Zealand lens – they have to be, if our banks are to stay relevant, profitable and evolve to suit the environment,” said Shuttleworth. 

The report says that banks must become simpler, smaller and more deeply connected to customers so that they can become more agile in an ever-changing world. Shuttleworth says a bank’s ability to quickly adapt to suit customer preferences is going to be a key focus over the next few years. 

“Banks are increasingly having to adapt their service offerings as the customer demographic morphs from the wealthiest generation in history to the most indebted,” he explains. 

“In New Zealand, half of our population have some form of debt, with 24- to 35-year-olds the most indebted age group, which brings up questions about how our banks service different, less-wealthy demographics and whether their appetite for risk is changing as a result. 

“This also poses some big questions for CEOs in the sector: Are NZ banks ready for a wider change to their banking models because of a change in their customers’ circumstances? From an ageing population to one with different levels of wealth, banks will seek to be more responsive to our shifting demographics.” 

The report outlined six priorities for the banks to address between now and 2020 which included; organizing themselves around the customer, simplifying the organisation, making the most of their partnerships, focusing on specific areas of innovation, embracing regulation and putting their culture to work. 
 

COMMENTS

Most Read

NZ Adviser TV