Banking Review

Thanks heaps!

Kiwibank is winning loads of customers, thanks to its personal financial management tool, heaps!

BY CHARIS PALMER

New Zealand’s Kiwibank has signed up more than 17,000 customers and is getting 70 per cent repeat usage of its new personal financial management tool, says Kiwibank head of online channels Peter Fletcher-Dobson.

Kiwibank launched the tool, called heaps! in March, which includes the ability to categorise transactions as well as budgeting and goal setting capabilities.

Fletcher-Dobson says early adopters of heaps! were people with an academic interest in seeing where their money goes, but use has also grown among customers who are worried about their financial situation and want help with managing their budget. “People are saying it’s transformed their lives. They don’t get that sinking feeling when they log in to Internet banking and see their balance,” he says.

The tool automatically sets a budget for users, using data on their last six weeks of spending to ensure customers are aware of actual versus projected spending.

Value drives loyalty
The launch of heaps! in March came on the back of BNZ’s partnership with cloud-based online accounting provider Xero. BNZ launched MoneyMap in April.

Fletcher-Dobson says Kiwibank spent about 12 months surveying the market and the competitive environment for personal financial management as it looked to take its Internet banking service to the next level: “Personal financial management and goal setting and budgeting is moving (Internet banking) from a payments engine transactional experience to a more interactive, supporting your finances role.”

And, he says, offering customers tools that they find useful should help boost the bottom line: “I think if you are getting value from your bank, then it will definitely increase loyalty.”

Kiwibank worked with online community specialist Social Capital to build the tool, rather than implement an off-the-shelf aggregation solution, such as ANZ’s MoneyManager, which is powered by US banking technology vendor Yodlee.

“We wanted to find the right partner with the right experience in the online community and social media area,” says Fletcher-Dobson.
heaps! includes a community tool that allows users to vote on the features they like or dislike, and Fletcher-Dobson says Kiwibank plans to expand the social elements of heaps! “I think that’s where these types of tools are going – enabling people to help each other more easily and benefit. The key thing is it needs to be done in a secure way. People need their private spaces, and they have that, but if they want to go out and connect with others, then they can also do that in a secure space.”

BNZ plans to charge customers NZ$5 a month for access to its MoneyMap tool, after an initial three-month free period. Fletcher-Dobson says Kiwibank has an agenda to help New Zealanders improve their financial situation and, as a result, has no plans to charge for the heaps! tool: “A real driver for us is helping people pay off their debts, and we’d rather be making money off their deposits than hitting them with fees for things.”

The role of banks in the personal financial management market looks set to grow as stand-alone PFM providers fail to monetise their businesses. In June, US start-up Wesabe announced it would shutter its operations as it was no longer able to cover the cost of the support and security required to maintain the operation. It joins UK group Kublax and the US Dow Jones and IAC joint venture FiLife in running out of cash before being able to build a stable business model.

Wesabe plans to release part of its code to open source platform GitHub and will also maintain its online forums.

Fletcher-Dobson says Kiwibank plans to continue to invest in personal financial management, with plans for tailored offerings targeted at specific segments including small business and different demographic groups.