Reaching the top in an Aussie-dominated field
Head of Kiwibank Steve Jurkovich speaks to Mark Jennings about workplace culture, the meaning of success, and making a mark in an Aussie-dominated industry
Heading up a major bank in New Zealand has been a career ambition for Steve Jurkovich. Not an obsession, but a goal that he has worked towards in a world where Australia calls nearly all the shots.
A few months ago, Jurkovich landed the top job – just not at the bank most industry people expected.
Jurkovich was an ASB man and when Barbara Chapman retired as CEO last year, Jurkovich was a frontrunner for her job.
He was ASB’s head of business banking and one of Chapman’s trusted lieutenants.
Instead, the job went to Vittoria Shortt, a former marketing manager at ASB’s parent, the giant Commonwealth Bank of Australia.
“Was I disappointed? Yes,” says Jurkovich.
“I put my heart and soul into that business, but I accept that a board needs to choose the person it thinks is right in the circumstances.
“Now, I think it was all part of shaping up for this role and when I reflect on it I can see a lot of things that make this the right job for me.”
Changing a bank’s style and culture can be a slow process for a CEO when the outfit has been around for 150 years or more, but Kiwibank is still in its infancy. It started a mere 17 years ago with seven people.
Jurkovich has an opportunity to drive change quickly if he wants to - and it looks like he does.
“I think the place (the bank) needs a shot of energy. We need to ask ourselves: Are we really about the customer? Could we do more for small businesses and home buyers?
“We need to be much more open and transparent. Customers want evidence that they are getting a fair deal.
“It is a case of don’t tell me, show me.”
Jurkovich says he is not a big believer in “charismatic CEOs” but does want to spend a lot of his time on the shop floor and engage fully with staff.
At ASB he was part of the pinstripe suit and tie brigade but always gave the impression he wasn’t entirely comfortable with the conservative dress code.
In this interview at Kiwibank’s rather spartan Auckland HQ (an ex-NZ post building) the suit jacket is off, and the tie is gone.
When he was head of ASB securities in the early 2000s Jurkovich appeared regularly on the share market report in TV3’s 6pm news.
He says it gave him a good appreciation of how tough “live” television was, but he enjoyed the challenge.
Jurkovich’s two biggest challenges now are to increase Kiwibank’s capital base to help it compete with the big four Aussie banks and to sort out the IT disaster that saw a new system abandoned and the bank forced to write off $100 million.
On the first one, Jurkovich appears confident and clear.
“Our new shareholders (NZ Superfund and ACC) have indicated they are supportive and in for the long-term.
“They said give us a plan and we will invest – we are here for you.”
“Yes, we have to earn their trust as there are always more options for investment than there is money, but I am confident we can do that.”
Jurkovich says work on the business plan is well advanced and he expects that the shareholders will make a decision “in a couple of months' time".
The plan will almost certainly focus on how Kiwibank will woo more customers away from the BNZ, ANZ, Westpac and ASB.
Jurkovich’s view is that while Kiwibank’s New Zealand ownership and the fact that “all the profits stay here” give it a strong marketing position, that in itself is not enough to get customers to switch.
“I think it would be if all things were equal, but we need to match the others in every aspect of banking.”
Jurkovich admits to being a great admirer of Air New Zealand.
“Their brand is truly New Zealand, but they are globally relevant too.
“We all love their unique New Zealand flavour but that comes on top of great technology and being very good at what they do.
“The warmth of their brand wouldn’t work if the planes didn’t run on time or they lost your luggage.
“Air New Zealand is a global leader as are other local brands like Rocket Lab and Icebreaker. Kiwibank needs to show that it can innovate in the same way as these companies.”
Jurkovich doesn’t appear nearly as confident or clear about the second big challenge – sorting out Kiwibank’s IT strategy following the $100 million debacle.
“It has left a difficult battle scar on the company’s history, “ he says.
“Only a small portion of the new system remains and works on a day-to-day basis.”
Jurkovich was unspecific when Newsroom asked him what plans the bank has to remedy the situation.
He talked about “developing the right partnerships” and said the lessons learned were “alive and well”.
He agreed that more cost is to come.
“Will there need to be a material spend? Yes.”
Like his predecessors at Kiwibank, Jurkovich will be judged on how good he is at winning shares off the big Australian banks which dominate the New Zealand market.
He knows that the Aussie banks are under enormous pressure from the Royal Commission into banking misconduct. More dirty linen emerges whenever the inquiry probes into the past practices of the big four.
But it is likely that Jurkovich will try to focus on what the banks are doing (or not doing) in New Zealand rather than wait for the fallout in Australia to drift across the Tasman.
“The Australian-owned banks will say they are big employers and taxpayers in New Zealand but if you look at what they give back to this country I don’t think it is good enough and neither does the Governor of the Reserve Bank.
“If you look at their profits they make compared to what they give back to the country and put that into a graph it looks like Jaws. A bigger and bigger gap is opening up.”
Success for Steve Jurkovich will be defined by whether Kiwis care about it enough to take their money out of the foreign owned banks and put in a local one.
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