General Manager of BNZ Markets
BNZ Bank of New Zealand
BNZ recently published its second paper on Digital Skills for Life in Aotearoa. Unsurprisingly, it concludes that much more still needs to be done if we are to make the most of the opportunities that the digital revolution affords us.
Banking has seen an incredible technological change over the past two years. In particular, we’ve seen our customers respond to COVID by increasing their usage of mobile apps and online banking tools and video technologies. Going digital for us at BNZ, means offering simple and easy to use tools to support our customers and employees as they go about their lives and business.
One of the benefits of these new technologies is that we’re provided with real-time feedback about user experiences. This enables us to quickly adapt to user needs and, in turn, hopefully, attract more business when we get it right. While encouraging customers to digital channels in the first instance, we want them to be secure with the knowledge that when they need us in person, we’re there for them. To put this into perspective, almost 97 per cent of our international payments up to $100,000 are made online through digital channels. This drops to 75 per cent above $100,000 as customers appreciate the access to our expertise and insights when making decisions with increased risk.
As well as our customers, we’re enabling our people. We’ve joined the Digital Boost Alliance initiative to offer essential digital skills for everyone at BNZ by the end of 2022. And of course, with our sponsorship of the BNZ Markets Bloomberg Lab at Otago University – Te Taura Takata, we’re enabling Otago students to learn and practice using real world tools and technologies currently being used in the financial and capital markets.
Clearly for banking, there’s a further digital wave happening. We’re seeing more attention turned to alternative or decentralised finance systems (“defi”) which include stablecoins, digital assets (such as cryptocurrencies and NFTs) and central bank digital currencies (CBDC). These bring risk as well as return and opportunities, and are being watched very closely by all in financial markets. At BNZ, we’re asking ourselves how we offer our customers access to these emerging technologies and asset classes when they are still, in the main, unregulated and volatile.
We’re also mindful that there are significant ESG questions for financial markets and related technologies to answer. We are seeing innovations in consensus mechanisms, such as the move from proof-of-work to proof-of-stake significantly reducing the energy requirement of blockchains. There are also second-layer solutions such as the Lightning network, already in widespread use, bundling a theoretically infinite number of off-chain payments into a single on-chain transaction. Ultimately, assessing any given technology’s use of capital needs to be assessed through the prism of long-term averages and projected utility. A complex task when we are only scratching the surface of the possibilities and implications of this technology.
That said, we see an incredibly exciting future. As we enable our customers to make informed financial decisions and use capital efficiently, we’re mindful of our responsibilities to show leadership in our conduct and contribution to fair and efficient financial markets. We all live on the one planet, and how we “go digital” affects each and every one of us. In the words of our CEO, Dan Huggins, “we have everything to play for and must work together at pace to deliver for all. Let’s find a way.”
Sponsor of BNZ Markets Bloomberg Lab at Otago University – Te Taura Takata