Put your cheque books away, folks
From February 28, Kiwibank will be cheque-free. Mark Jennings looks at how it has been preparing its customers for the big change.
It’s raining heavily in Nelson, something it hasn’t done for a while. Local MP and former cabinet minister Nick Smith hurriedly climbs into an old bus parked outside the city’s library.
Smith engages 90-year-old Roya De Lorenzo on how she is coping with lessons in internet banking. The veteran MP is mildly surprised when she tells him, “Yes, I can do it. It’s just paying bills online that I struggle with.”
The 33-year-old bus, nicknamed DORA (Digital On-Road Access), is part of Kiwibank’s efforts to help people, especially older people, improve their digital skills. De Lorenzo is one of 640 seniors from around the country who have attended a course onboard Dora since last May.
After Nelson, DORA is heading north to Kaitaia via the Coromandel.
Sheltering under a veranda waiting for Smith to get off the bus is Kiwibank’s general manager of retail distribution Geoff Waller.
Banking and senior citizens are big issues for Smith. When Kiwibank announced it was closing its Stoke branch, the last one remaining in the southern suburb, Smith and Grey Power joined forces to protest the move. Smith is also worried about the bank’s decision to discontinue cheques at the end of this month.
“I’ve had 34 constituents write to me about this,” he tells Waller.
Waller assures him that the bank has been putting in a major effort to help customers still using cheques.
“We know this is a change that is not going to be easy for a lot of people so we have put together a number of options and a range of solutions that help them through that change. DORA is obviously one, but we have a similar programme in libraries and community centres. They are education-based and confidence-based as well. A lot of people are scared about what online can do and how secure it is.”
Smith agrees that security is a big issue and gives his own example.
“My mum, who is 85, terrified me last week. She rang me up to say she had a call at 5am this morning from a nice man who wanted my bank account numbers and she gave him the lot. I had to get her down to the bank to change her accounts straight away.”
Branch closures and the move away from chequing services are a reflection of changing consumer patterns all banks are grappling with.
“The use of cheques has plummeted; going down 20 percent year-on-year over the past five years. The decline was nearly 30 percent in the last 12 months. Other forms of payment are faster, safer and cheaper and therefore people are flocking to them. Over 99 percent of transactions are now done electronically versus less than 1 percent for cheques,” says Waller.
While New Zealanders made 18 transactions by cheque per person in 2010, that number has now sunk below four.
Last year, Kiwibank’s chief executive Steve Jurkovich outlined the problem confronting his bank.
“You face the decision about whether you should invest millions of dollars in a sunset technology. Actually, it’s more than $10 million over the next five to seven years, as cheque-processing technology comes to the end of its useful life and licences and service agreements need to be renewed.”
While Kiwibank is the first bank to scrap cheques, Waller expects other banks will follow suit at some point.” NZ Post, ACC and Inland Revenue are also stopping cheques this year.
As part of its efforts to transition people to electronic banking, Kiwibank has developed an e-banking module for the Digital Inclusion Alliance Aotearoa’s Stepping UP programme - a community-based digital skills initiative funded mainly by Lottery grants, with support from companies such as Kiwibank and Spark.
The Alliance runs the bus – DORA – and works with public libraries to provide two-hour education sessions. Alliance chair Laurence Zwimpfer arrives in the rain while Waller talks to Smith. He is the one who will drive DORA to Kaitaia.
“I wish we had a newer bus,” he says ruefully.
Smith says he thinks it would be a good idea if DORA visited all 12 retirement villages in Nelson.
Zwimpfer demurs: “I think it would be better to just send out the librarians who have had Stepping UP training, put the money into that, the sessions we run here at the library have been really successful.
“The thing about having library staff involved is they are great at interpersonal relationships. They are doing that every day. Librarians are trusted, they are right up there with the most trusted people in society, higher than journalists and politicians.”
Nelson librarian Michelle Bryant has run many of the two-hour sessions and says, judging by the written feedback from the seniors taking part, they are well-received.
“It is mainly people that are in their 70s and they come with their own smart phone or laptop. Quite a few of them have online banking already but they don’t use it because they are afraid - they don’t trust it.
“We spend a lot of time on what to look out for - scams, phishing, strange emails. Everyone in the class has had an example ... including romance scams. So, we talk about what you can do and how to identify and not to click on any suspicious links.”
Bryant and the other librarians use the Banqer app, which was originally developed to teach financial literacy in schools.
“We use the Banqer app because it works in real time. It allows us to practise transferring money (not real money) between people in the class and we then practise doing a payment.”
Zwimpfer says the course gives older people what they value most – independence.
“There is usually this dependence on somebody else. They are getting by by depending on a family member or partner to do their banking, or they are using a cheque to shift funds between different accounts.”
Bryant adds, “They say they feel safe in this environment and they are not made to feel stupid. Because, if they talk to their son or daughter about this, they’ll say, ‘Oh mum’ and also you don’t always want to show your family your bank accounts.”
To complement the Stepping UP programme, Kiwibank has been offering one-on-one coaching at what it calls ‘Tech Teas’. Customers are invited into a branch and get a cup of tea while they learn about internet banking.
“So far almost 2000 customers have taken us on that offer,” says Waller.
“We help them with registering and loading the app onto their own device. At the end of the session, they will often say ‘Can you help me download Skype so I can talk to the grandkids?’ and that’s quite cool too.”
MP Smith seems appreciative of the efforts to transition people to electronic banking, but wants to know about where and when a new banking “concierge” will be available in Stoke.
All six major banks have agreed to collaborate on a trial of concierges in small towns that have lost their branches.
The pilot scheme is being rolled out to Twizel, Stoke, Opotiki and Martinborough.
Waller says the location of Stoke hasn’t been made public yet.
Smith presses him: “I was told this would be happening at the end of March. Is it on track? “
Waller confirms it will be a slightly later opening but everything is on track.
“And will there be a person there that people can talk to?” asks Smith.
“Yes, there will be a real person,” says Waller.
“Great, fantastic. That’s all I need to know.”
A politician with good news in his back pocket is a happy politician. Smith disappears into the heavy rain with a smile on his face.
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