Westpac: New preference for saving over spending

When it comes to saving, the good news is that we are. New Zealand households have been spending less than they earn (in other words, saving) for several years now. Those savings need to be invested!

The CANSTAR Bank of the Year – Savings Award recognises the banking institution that offers the strongest overall value for Kiwis when it comes to their savings account needs. To do this, CANSTAR compares a range of savings products that are available.

This includes at-call accounts (online savings and bonus savings) and term deposits. We also consider a number of features that promote or educate consumers on saving. These features include calculators, personal financial management (PFM) tools, budget planners and saving articles.

Not all of us are the same, so the award also recognises the institution that is able to offer quality products for all different needs and uses and this year, CANSTAR has researched and rated the deposit products offered across seven institutions.

This year, CANSTAR is pleased to announce Westpac as winner of the Bank of the Year – Savings Award. In light of its win, CANSTAR caught up with two of Westpac’s senior team: Simon Pomeroy,  Chief Digital Officer, and Jo McGregor, Director Deposits, Westpac New Zealand Strategy Products & Marketing.

CANSTAR Q: With the official cash rate falling recently, has there been a change in the types of products that savers are favouring?

JO MCGREGOR: We have seen continued growth in our personal online savings products, though customer preference for these accounts has pre-dated the recent OCR changes. In a relatively low interest environment, customers are seeking to maximise returns, and our Portfolio Investment Entities (PIE) products like Online Saver PIE, Online Bonus Saver PIE and the  recently introduced 32 day Notice Saver PIE have become increasingly popular.

Regulatory changes tightening up on early withdrawals from term investments, greater accessibility for relative returns, as well as more enhanced features on savings products have helped drive the switch from term to on call savings accounts.

CANSTAR Q: What are savings trends overall in New Zealand at the moment?

JO MCGREGOR: Growth in personal customer deposits continues across the market at a rate of around 10% each year, reflecting a new preference for saving over spending. We’ve also seen more customers select online savings options as customers choose online channels for their transactions. This is supported by an increase in savings among young people.  Recent Westpac research showed security and financial stability were important to this group, as well as access to digital, online and mobile apps. We have also noticed an increase in the average age of our first home buyers, particularly in the larger cities and metropolitan areas. Many of these customers have taken advantage of our HomeSaver programme which offers practical support in helping them stay on track with their savings goals and incentivises them to save long term.

CANSTAR Q: Westpac’s online banking is exceptional – what are some of your customers’ favourite online banking tools?

SIMON POMEROY: Customers want easy and simple, and that is what we have strived to deliver with our new online banking platform, Westpac One. Westpac One offers the same functionality across all devices – smartphones, tablets, and desktop meaning the customer can bank when they want on the device of their choice. Some of its most popular features are the Quick Access services which allow customers to quickly check balances and transfer money between their own selected accounts without the need to log in.

In addition, our partnership with New York fin-tech start up Moven enables our customers to get real time insight and awareness of everyday spend with features like “Spending Meter’.  It lets them know what they’ve spent in the current month, compared to in previous months. We’re already seeing customers using this up to five times a day.

This awareness helps people slow down if they are in the red, or move money into their savings account if they are in the green. In the near future customers will be able to see their spend broken into categories, showing how much they’re spending on things like eating out, grocery shopping and transport. Every time they spend in a category they can opt to receive a real time alert giving them an up to date position of how they are tracking.

CANSTAR Q: How important is continual innovation in the online banking sphere? How does Westpac stay ahead of the game?

SIMON POMEROY: Innovation in banking is key and more and more customers are wanting total control over their banking. The key for Westpac has been to actively seek customer feedback and use this to drive innovation – building a more collaborative approach with our customers in the way we innovate. Since launching Westpac One we’ve seen close to a 30% increase in online banking usage with more than 65% of our online customers now using mobile devices. We’ve focused on making it easier to get information like account balances and payments, and providing more insights so that customers can manage their finances whenever they like, on the device of their choice.

CANSTAR congratulates Westpac on its well-deserved win. Customer can download the Savings Award report here.

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