Business customers identify clear differentiators in business banks

Martin Smith, Global Head of Markets Analysis at East & Partners

Business Banks are differentiating their solutions and services in a competitive market as they digitalise offerings and respond to the need for more sustainable propositions.

For the first time, New Zealand Business Banks have been ranked by their customers and the business market across 16 key Business Banking Brand Attributes, covering areas including Digitalisation, Safety, Insightfulness, Sustainability, Ease and Responsiveness.

The research included direct interviews with over 600 business leaders of varying company sizes, segments and sectors nationally throughout New Zealand.

The joint East & Partners and Red Matter Consulting research found that Treasurers, Business Owners and CFOs ranked Westpac NZ as the “Leading Business Banking Brand” in New Zealand.

Westpac NZ was identified to be leading the Micro, SME and Commercial banking segments, whilst ANZ was ranked as leading in the Corporate segment. HSBC also performed well in the Corporate space with a higher brand recall than one of the “Big Four” banks.

Who is the “Leading Business Banking Brand in NZ”?

Westpac performed particularly well as a business bank that encourages ‘sustainability’ and is ‘responsive’ in challenging times, most notably through the pandemic.

ANZ was noted for their ‘innovative products’ and trans-Tasman ‘connectivity’.

BNZ scored highly with strong ‘insights to support growth’, while ASB led banks in ‘digital solutions’. Kiwibank’s highest rating was in support and promotion of ‘social enterprises’.

All banks struggled in ease of onboarding’ with 70% of business customers noting that no bank stands out. 5% of businesses failed to identify a Leading Business Banking Brand.

Martin Smith of East & Partners said, “The inaugural best of breed Business Banking Attribute ratings provides insights into the competitive positioning success of NZ Banks in terms of relationship share, wallet share and mind share tempered by genuine capability.”

“Are New Zealand business banks “walking the walk” or simply “talking the talk”?”

“No single business bank is outperforming across all 16 attributes captured at a critical time when one in five CFOs are planning to switch business bank in the next six months.”

“Expectations are rising rapidly, where NZ banks invest to prevent customer churn?”

Iain Taylor of Red Matter Consulting said, “Although it is often said that the business banking sector is highly commoditised, our research is clear that business customers are able to differentiate the business banking brands in New Zealand based on clear criteria.”

“What is particularly interesting is when you map the business bank brand awareness across various attributes, with respective market shares. Some business banks are clearly in ascendence, whilst others are sitting quite precariously and open to attrition.”

With over 20% of business customers noting that they would consider switching on a clear differentiator within the next six months, the importance of continued differentiation and improving the ease of switching, remains paramount for NZ business banks.

About the research

The fieldwork for this inaugural round of the New Zealand Business Banking Attribute Monitor took place over a two-week period ending 15 October 2021 with a sample of 615 enterprises.

The sample was structured using four core customer segments based on annual turnover:

  • Micro business           NZ$1-5m annual business turnover
  • SME                           NZ$5-20m annual business turnover
  • Commercial                NZ$20-100 annual business turnover
  • Corporate                   NZ$100m+ annual business turnover

Enterprises interviewed were randomly selected into the sample frame, sourced from a variety of list brokers and database houses and washed for contact validity prior to any contact.