Latest / Best of Business / Steve Jurkovich: Kiwibank CEO on the bank urging politicians to investigate Australian rivals over 'bonus saver' accounts

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Steve Jurkovich: Kiwibank CEO on the bank urging politicians to investigate Australian rivals over 'bonus saver' accounts · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from Newstalk ZB. Follow this
• 0:13
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• 0:16
  Speaker 2: Now, Kiwi Bank is calling out the big Australian banks
• 0:19
  Speaker 2: for their bonus saver accounts. The bank's boss says he
• 0:23
  Speaker 2: suspects most people actually miss out on the advertised interest rates.
• 0:26
  Speaker 2: Chief Executive Steve Yerkovich is with us now. Hi, Steve.
• 0:29
  Speaker 1: Hi, Heather.
• 0:30
  Speaker 2: How much do you reckon they're missing out on?
• 0:32
  Speaker 1: Well, if you look at the numbers that happened in Australia,
• 0:34
  Speaker 1: it was about 70% of people regularly miss out on
• 0:37
  Speaker 1: their bonus rates. So when you're thinking about 7 in
• 0:41
  Speaker 1: 10 people not getting what they sort of hoped that
• 0:43
  Speaker 1: they were going to get or they planned to get,
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  Speaker 1: that's a pretty big number. Yeah.
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  Speaker 2: And the rate is something like 1.8%, but if you
• 0:48
  Speaker 2: miss out, then it drops down to 0.05. Is that right?
• 0:52
  Speaker 1: Yeah. So the difference is you get 1.8% if you've
• 0:55
  Speaker 1: made a minimum deposit and you haven't made a withdrawal.
• 0:59
  Speaker 1: Of course, if you do make a withdrawal, that'll drop
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  Speaker 1: from 1.8% to as you say, 0.05 of a percent.
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  Speaker 1: So a very, very big difference.
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  Speaker 2: So why do you think people miss out? Are they
• 1:10
  Speaker 2: not reading the terms and conditions or they just cannot
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  Speaker 2: meet the obligations?
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  Speaker 1: Well, we did some research which was called State of
• 1:17
  Speaker 1: the Savings and about half the people that we researched
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  Speaker 1: said that they didn't really understand how it works. So
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  Speaker 1: there's a bunch of people that the complexity of banking
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  Speaker 1: has made it tough for them to understand it. I
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  Speaker 1: think the real story here, of course, is life happens.
• 1:32
  Speaker 1: And so you think you're going to be able to
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  Speaker 1: put that money away. You think you're not going to
• 1:34
  Speaker 1: have to touch it. And then surprise, surprise, something happens
• 1:37
  Speaker 1: and you do need to touch it. And, you know,
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  Speaker 1: that's a very, very big difference from getting 1.8% to
• 1:43
  Speaker 1: getting 0.05%.
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  Speaker 2: Now, why is it that you want to know the numbers?
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  Speaker 1: Well, I just think transparency is really good. So you
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  Speaker 1: put transparency on it and you'll see people's behaviour change.
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  Speaker 1: Just like, you know, every person you interview that, you know,
• 1:57
  Speaker 1: is in a tricky situation, Once the spotlight goes on it,
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  Speaker 1: it's amazing how you see people's behaviour change and that
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  Speaker 1: means that rather than the banks being better off, customers
• 2:06
  Speaker 1: will be better off and that's got to be a
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  Speaker 1: good thing.
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  Speaker 2: What do you think people would do differently?
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  Speaker 1: I think once they understand it, they probably would say
• 2:12
  Speaker 1: to themselves, OK, well, maybe I need to split my
• 2:14
  Speaker 1: money that I'm going to put aside so I can
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  Speaker 1: get the bonus interest rate because, you know, they're not
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  Speaker 1: being duplicitous about the way they explain it. If you
• 2:22
  Speaker 1: do the deposit and you don't withdraw, you get the rate.
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  Speaker 1: But actually, maybe if you're in a position where you
• 2:27
  Speaker 1: can save, Maybe you won't put all of that savings away.
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  Speaker 1: Maybe you'll put a decent chunk away for a rainy
• 2:32
  Speaker 1: day and then you'll put some money aside for the
• 2:35
  Speaker 1: sort of mishaps that happen from time to time.
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  Speaker 2: Steve, while I've got you, what are you feeling about
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  Speaker 2: the OCR in October? Does it feel like a pause
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  Speaker 2: to you?
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  Speaker 1: Yeah, it does. I think there was a pretty clear
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  Speaker 1: signal there that it was a move to get away
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  Speaker 1: from it being stimulatory to a bit more of an
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  Speaker 1: even setting. And And that's probably, you know, like our
• 2:56
  Speaker 1: argument was you didn't need to do it now, but
• 2:58
  Speaker 1: I think you can understand that. If there's a pause,
• 3:00
  Speaker 1: then hopefully we can continue to get some momentum going
• 3:03
  Speaker 1: because it feels like finally we are getting some momentum.
• 3:07
  Speaker 2: What are you seeing that makes you feel like that?
• 3:09
  Speaker 1: Oh, customers starting to really, particularly business banking customers, come
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  Speaker 1: in and say, actually, you know, I've been putting this
• 3:15
  Speaker 1: on hold for a while. I think things are getting better.
• 3:18
  Speaker 1: People are starting to see through, you know, that maybe,
• 3:20
  Speaker 1: you know, you're not seeing any policies that feel like
• 3:22
  Speaker 1: they're big, you know, swings from left to right. So
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  Speaker 1: I think some people are starting to say, well, actually,
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  Speaker 1: probably it's going to be a bit status quo, so
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  Speaker 1: let's get on with it.
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  Speaker 2: Yeah, I'm pleased to hear that. Hey, thank you very much, Steve.
• 3:31
  Speaker 2: Appreciate it. Steve Yerkovich, Chief Executive of Kiwi Bank.