All too frequently I see comments and advertising making people feel guilty for not banking with New Zealand owned banks. Kiwibank’s ad during the rugby world cup tried to make us feel bad for not banking with a NZ owned bank.

Instead of attacking overseas owned banks, New Zealand banks should be looking at what they can do better.

Full disclosure: I bank with an Australian owned bank.

I would love to bank with a New Zealand owned bank. In fact, I have tried on three different occasions all with poor results.

Experience one: Cooperative Bank

When I first bought my apartment in 2009 I took out a mortgage with The Cooperative Bank. For the most part their service was very good and I had no problems with them. Until I did. About a year into the mortgage I wanted to get smarter about paying down the mortgage more quickly.

I found out that through my company I got discounted rates at Kiwibank so I asked the Cooperative Bank if they could match it, or at least get close. The answer was no and there was no further discussion. Not even the smallest willingness to negotiate.

I pulled my $320,000 mortgage out of the Cooperative Bank and moved it to Kiwibank.

Experience two: Kiwibank

I remained at Kiwibank for a very long year until my 1-year fixed mortgage expired. Where do I start?

It was extremely difficult to make appointments to see someone face to face

They were always closing down offices making it harder and harder to see someone.

When I phoned up, I often experienced ridiculous waiting times.

Finally, when it came time to renew the mortgage I did some shopping around and found an even lower rate with ANZ. I asked Kiwibank if they would match it and just like the Cooperative Bank, they refused. Even when I told them I would leave.

So, yet another Kiwi customer leaving for an Australian owned bank and they didn’t seem to care despite advertising that they do.

Experience three: TSB Bank

After being with ANZ for 3 years, I was looking at moving out of my apartment at this stage and buying a new house. I thought I would try and give another New Zealand bank an opportunity to have my money. I went in to the local TSB Bank branch and sat down with someone and we went over my finances.

He said all looks good for approval and we will be in touch. Well, no one got back in touch. I emailed them several times with no response.

Another lost opportunity for the New Zealand banks.

Final thoughts

Customer experiences is often different between different people. Just as I have had not so good experiences, someone else may have had great experiences. Sometimes it comes down to the difference of just one employee. So if you have had good experiences with kiwi banks then good for you.

Well, I seemed to have stumbled across all the bad employees of the New Zealand banks.

My experiences were also over 5 years ago so times may have changed.

But in my opinion, there is a reason why the New Zealand banks only have less than 10% of all lending between them. They are extremely inflexible as evidenced by their unwillingness to match the Australian owned banks mortgage rates. And their service leaves a lot to be desired.

In fact, Kiwibank, who claim to be “the people’s bank”, are the first bank to remove the use of cheques in NZ. And they only gave their customers 9 months to make the required adjustment. If they truly are the people’s bank why do they have to be the first to remove a service that plenty of people still use? Sure, most don’t, but even 1% of hundreds of thousands of customers is still a big number. And at least give your customers longer than 9 months! That’s not very long for the elderly person who can’t read very well or use the internet with no family to help.

I am not willing to bank with a New Zealand bank if it means I will be worse off financially. The same can be said for many people.

We all know what banks are not New Zealand owned, but we are not willing to move our money to companies that are quite frankly not as good at what they do.

My experiences are that the Australian owned banks employees are much better trained, and more professional all around. They treat their customers better.

I wanted to be with New Zealand banks. I really tried. Unfortunately, they all left a lot to be desired.

So, instead of trying to make us all feel guilty for not banking with them, maybe New Zealand banks should be looking at themselves and asking what they need to be doing better. With such a low market share, they are obviously doing a lot of things wrong and I am not the only one that thinks so.

The information contained on this site is the opinion of the individual author(s) based on their personal opinions, observation, research, and years of experience. The information offered by this website is general education only and is not meant to be taken as individualised financial advice, legal advice, tax advice, or any other kind of advice. You can read more of my disclaimer here