Uncertainty and risk with forecast prices
In BNZ's Rural Wrap report, senior economist Doug Steel looks at milk price forecast and outcomes.
At a primary production select committee hearing last month, RWNZ chief executive Gabrielle O’Brien said there was an overemphasis on apps and digital tools as a way of resolving some of the issues that have arisen out of branch closures.
“Unfortunately, although these are very good and although there is support for continuing to develop those, it does need to be supported by good connectivity and good access,” O’Brien says.
“We understand that the world is moving on and changing, and bank branches are closing, it’s going to look different in the future. We’re not saying that it might look different, but what we’re advocating for is more physical presence of the banks in rural areas whether that is through hubs, whether that is through some kind of mobile service, and whether that is through physical branches, but we don’t think we’re there yet,” she explains.
In its submission, RWNZ states that getting approval for agriculturebased lending required access to bankers with rural lending experience who can provide accurate advice and information about criteria and conditions.
“The reduction in branch locations and opening hours means rural people are being compelled to rely on using their banks freephone number instead,” the submission states.
“The lack of an ongoing relationship impacts the consistency of lending criteria and processes being applied and inhibits staff from being forthcoming about any changing requirements. This is not the case for urban customers who can meet with their same ‘relationship manager’ in the local office.”
Meanwhile, RWNZ connectivity spokesperson and board member Claire Williamson told the committee that while many claim that everyone has access to the same technology, “that’s not the case”.
“We’ve got people in our membership who have to run down the road in order to get connectivity and that doesn’t work when you’re trying to get into a banking app or trying to do two-factor authentication,” Williamson says.
However, in its submission to the committee, Bank of New Zealand (BNZ) says location has not proven to be a barrier to meeting its agribusiness customer needs.
The bank claims its local Corporate Agribusiness Client Directors can travel to their customers’ location to discuss their business needs and to understand the local conditions.
“The bankers are empowered with delegated authority to make any lending decisions while on their customers’ premises,” the bank says.
It says that in addition to this service, BNZ has 102 branches, 178 Smart ATM locations and is participating in regional banking hubs, which are currently being piloted in seven small towns.
“While the volume of over-the-counter transactions in BNZ’s branches has fallen significantly, for most customers BNZ’s online banking tools are an accessible and convenient way to do their everyday banking.”
