Hilarious hypocrisy
April 4th, 2009 at 2:56 pm by David FarrarKiwibank has spent millions of dollars on its nationalistic, almost xenophobic, campaign against Australia and Australian owned banks.
So I had to laugh when I read in the ODT that Kiwibank is using an Australian-based call centre.
April 4th, 2009 at 3:08 pm
I laughed too, but this is not the first time a corporate has palyed on supposed patriotism while laughing up their sleeve at the customer.
Sate Insurance have their TV ads, voice by Oscar Keightlt, about people always stealing your stuff. Phar Lap, Split Enz, Pavlova and Crowded House are inferred as being stolen by the Aussies.
And who owns State Insurance – IAG, that is Insurance Australia Group.
Vote:April 4th, 2009 at 3:11 pm
“Kiwibank has spent millions of dollars on its nationalistic, almost xenophobic, campaign against Australia and Australian owned banks.”
And insulting the Southland town of Winton, pop. over 2000, in the process.
Vote:April 4th, 2009 at 3:11 pm
Forgot to say – it is not, however, hypocrisy to advertise yourself as the Kiwi standing up to the foreign banks when it is, in fact, the truth that Kiwibank is the biggest non Aus owned bank in the country. Unlike the State Insurance ads where the play is on patriotism, the foreign ownership is not revealed in the ads. that probably better qualifies for hypocrisy.
Vote:April 4th, 2009 at 3:15 pm
Why is it “almost xenophobic” to exploit a point of difference in the market? Isn’t this what marketing is all about?
Secondly, isn’t advertising specifically designed to appeal to emotions? All the better if those emotions (e.g. patriotism) already exist in the target market.
Kiwibank didn’t implant patriotism, did it. It’s not an unhealthy emotion, is it.
I’d say personally that as a taxpayer, if Kiwibank had failed to exploit this existing phenomena, then it should have fired its agency for doing a remarkably poor job.
Vote:April 4th, 2009 at 3:16 pm
You wait, Kiwibank will turn out like NZ’s “Fannie Mae” yet.
Vote:April 4th, 2009 at 3:19 pm
Jeebus Crystal Phil – I think you need a new tinfoil hat.
Vote:April 4th, 2009 at 3:23 pm
Those Kiwibank ads are so smarmy and irritating, I’ll never go near the place.
Vote:April 4th, 2009 at 3:28 pm
No billy, Phil has a point, kiwibank is taking high risk clients and offering very competitive rates. Does a new and inexperienced bank with a political mandate to help the less advantaged really understand the NZ market, and market risk better than its rivals.
The only reason it is growing is that it is prepared to back riskier propositions, and accept lower returns than its competitors.
Who owns it? Who is responsible for agreeing to the risk profile?
Fortunately its book is retail and mostly plain vanilla, will be interesting to read this years annual report, in particular, what is being provisioned for bad and doubtful debts.
Vote:April 4th, 2009 at 3:38 pm
I don’t know if it is hypocrisy. It’s capitalism. Wall Street was built on gaming the system. Financial institutions will always try to game the system. And the government will always be one step behind.
I think this issue is morally neutral.
Vote:April 4th, 2009 at 3:48 pm
This should go on Campbell Live or Fair Go and exposed for what it is
Vote:April 4th, 2009 at 3:49 pm
Why, arkhad? What is it?
Vote:April 4th, 2009 at 3:57 pm
Borker, you might find Kiwibank ain’t the biggest non ocker bank in NZ. Depends what you call big. It would not surprise me if SBS’s loan book or that of Rabobank was bigger. Having the largest number of shithead clients is not a useful measure although it is no surprise that lefties would think it is.
nd yes, Kiwibank could well turn out to be NZ’s Fanie Mae. It is an unprofitable politically generated animal which would have gone broke long ago but for the enforced subsidy from NZ Post’s presxisting OTC business. Already we wer4e overbanked and we certainly did not need another one, even if Jamdertin did.
Vote:April 4th, 2009 at 4:14 pm
Storm meet teacup. They probably employ aussies and other foreigners – based on the individual’s ability to do the job. They probably buy technology from non-NZ companies based on, you guessed it, its ability to do the job. They probably… well you know… plan to provide a valuable service to whomsoever they can sell to.
Vote:April 4th, 2009 at 4:21 pm
“The New Zealand-owned bank opted to use Mercer, one of six default scheme providers …However, a call by the Otago Daily Times to Kiwibank’s toll-free Mercer KiwiSaver number was answered by a Mercer customer services representative in Melbourne,
It its Mercers call centre – not Kiwibank’s. Lets get things in perspective.
Vote:April 4th, 2009 at 4:59 pm
Actually advertising is just propaganda, and as such it will always follow the rules of propaganda. Because AIG wishes us to believe black is in fact white, their advertisments use most of the tools. because propaganda doesn’t work if you challenge people’s deeply held beliefs (NZ good, foreign bad) AIG insteads creates an misrepresentation to insinuate their message around the viewers beliefs. The AIG ad uses all the tools refined way back by Leni Riefenstahl: language (a good PI accent from South Auckland using Kiwi venacular), social endorsement & the use of an advocate who appears as a friend (Oscar Knightly), the interrogative model (Whose are the thieves?), framing the “evidence” in a way that suits them best to redefine the situation, and creating an illusory correlation between AIG and New Zealand identity.
Kiwibank on the other has no need to try and convince us black is white, because they ARE New Zealand owned. Hence, their ads are not as dishonest as AIG’s.
All of Which explains why David Farrar’s comment is rather shallow and weak.
Vote:April 4th, 2009 at 5:30 pm
Nationalistic ads are just shallow and annoying. None more so than those fricking braindead state insurance ads with Kieghtly talking like a mong.
But if Kiwibank use a foreign call centre, so what.
Vote:April 4th, 2009 at 5:55 pm
Of all the posts Philbest and ‘The Deity have probably got it about right. Kiwibank have made a meal of it going after the relatively high risk end of thje market in the full knowledge that they don’t have shareholders to answer to but only a Government who, for a variey of reasons, can’t let them to be seen to fail.
I still don’t know why any Government needs (a) to own a bank let alone (b) subsidise it with taxpayers money.
It looked great in the ‘good times’ but I will be interested in their next few results.
Vote:April 4th, 2009 at 7:07 pm
I think we need to base our judgement on the things that really matters: I would do the Rabo Bank girl in a heatbeart, but the Kiwibank girl isn’t anything to be sneered at.
Vote:April 4th, 2009 at 7:39 pm
What evidence is there that Kiwibank has applied any less stringent criteria to its book than any other bank?
Personally I look at it like the Warehouse, in that it keeps its competitors honest by giving the best deals on stuff that isn’t crap.
The dynamics behind the fact its shareholders are the govt changed when the govt changed.
The previous govt set them up and could not afford to see it fail. This current govt will treat it differently and in fact I predict will prepare the public for its sale over this term of office.
Which would not in my view be necessarily the best thing for the NZ taxpayer given the likely book value at the time of the sale and the removal of such a player from a vital market currently dominated by overseas interests.
Vote:April 4th, 2009 at 8:06 pm
billyborker
That insurance TV ad you referred to is actually a NZI ad, not State.
Vote:April 4th, 2009 at 9:46 pm
So what? NZI or State, both are owned by IAG so the point remians
Vote:April 4th, 2009 at 10:07 pm
“Personally I look at it like the Warehouse, in that it keeps its competitors honest by giving the best deals on stuff that isn’t crap”
ummm reid. the stuff that isnt crap at the warehouse is a fairly short list?
Vote:April 4th, 2009 at 10:38 pm
Heres a point of difference between Kiwibank and the Aussie owned banks – Kiwibank doesn’t pay anything for it’s Government Guarantee. (Neither do TSB, SBS, or any Finance Company.) Only the Aussie Owned banks do.
Having the Government as both the regulator and an operator is an obvious advantage to Kiwibank.
Vote:April 4th, 2009 at 11:11 pm
How is it hilarious hypocrisy? Kiwibank resells a service offered by Mercer, because it is not large enough to operate a Kiwisaver scheme itself and is not corporately irresponsible in offering something which it can’t deliver efficiently. At the same time, it offers it’s clients the convenience of the Mercer scheme so that the customer has a smaller number of retail interfaces to deal with while having a more complete suite of financial services.
Various people’s claims about Kiwibank’s low quality clients are mere hearsay. The fact is that Kiwibank has shaken up an ologopolistic market and given consumers, directly and indirectly, a better deal. Kiwibank has also been able to use better, more efficient information systems.
With the deposit guarantees scheme, in theory any bank could become NZ’s Fannie Mae: however right now Kiwibank is transparent, and seems efficiently and well run on the basis of that transparency.
Vote:April 5th, 2009 at 8:22 am
God bless the Aussie banks.
Sound safe and mostly well run.
Saving our bacon while other overseas banks are either falling over or being propped up.
Vote:Not sure of the exact figures, but the big 4 aussie banks are now in the world’s biggest 10 banks.
Nice secure banking for Kiwis.
April 5th, 2009 at 8:40 am
Razork, It’s funny how you fawn like that just to make your point. Actually I also appreciate the security and well-run nature of the Australian banking sector in NZ. However they gouged consumers a bit: Kiwibank’s presence has saved a lot of money for Kiwis. How many times has Kiwibank led an interest rate drop, for example, forcing the Aussie banks to do the same. I think you will find they often are the first.
Vote:April 5th, 2009 at 8:51 am
you are starting to sound like a kiwibank employee there hayek!
You are also proving our point. How is it that the small start up bank can lead the way with interest rate drops?
Either every other bank (including the TSBs and Southlands of the world) are acting as a cartel and gouging us, or…
Kiwibank is making some risky plays going after market share.
I do accept that the Australian banks make good profits here, and I am also very grateful that the 4 big ones are in the top 11 banks left with AA credit ratings, which means they have been relatively more conservative in their practices than their overseas competitors (that used to be large banks like RBS).
I also note that some of the reasons NZers pay relatively high rates are to do with our high current account deficit, our relative indebtedness, and our shallow capital market. That is, there are some systemic and sovereign risks associated with NZ that mean our creditors charge us a risk premium. Do you disagree with this?
Returning to the point though, the fact that kiwibank is attached to a formerly well performing SOE and has government ownership should be a matter of interest, particularly when they are staking out aggressive and leading positions in the market.
Surely even an employee can acknowledge this?
Or are you saying that there is in fact a cartel of banks milking the NZ punter? In which case, perhaps you could pop along to the Commerce Commission and share your evidence.
As I said earlier, the annual report will be an interesting read.
Vote:April 5th, 2009 at 9:39 am
ex-nige,
“Returning to the point though, the fact that kiwibank is attached to a formerly well performing SOE and has government ownership should be a matter of interest, particularly when they are staking out aggressive and leading positions in the market.”
Well, Kiwibank are offering lower floating/short-term interest rates. But their 3-5 year fixed rates actually are higher than their competitors. So it might be reasonable to argue that Kiwibank is following a particular business model – encouraging new business on a lower short-term rate, which then will be fixed when interest rates trend up at a slightly higher long-term rate than could be got elsewhere. Or is this overly cynical?
BTW: I know from personal experience that Kiwibank will not lend to self-employed applicants, and demands a minimum 20% deposit even from applicants earning close to $100k a year. So it’s not like their out in the streets throwing free money around (cf NINJA loans in the USA).
Vote:April 5th, 2009 at 9:33 am
not cynical at all AG, I don’t think for a moment that kiwibank *plans* to become insolvent. I just note that they are taking aggressive positions. I am also concerned about the impact of the implicit government guarantee.
Just as I am sure that Fannie Mae didnt intend to collapse the US economy.
If Kiwibank are balancing their book by pushing up fixed rates and relying on inertia from clients to fund the “headline” figures – well thats just good business practice.
Vote:April 5th, 2009 at 9:34 am
hmm, not sure how my response to you AG has turned up before your comment – must be that omniscient thing?
Vote:April 5th, 2009 at 1:50 pm
tdfn
I’m a kiwibank customer, but have been (still am) with a couple of other banks too.
As you would know, ologopolistic markets have a tendency to poorly regulate the prices. Kiwibank had more of an incentive to offer sharper (but not in my opinion uncommercial) deals to certain sectors of the market to increase market share.
“You are also proving our point. How is it that the small start up bank can lead the way with interest rate drops?
Either every other bank (including the TSBs and Southlands of the world) are acting as a cartel and gouging us, or…
Kiwibank is making some risky plays going after market share.”
TSB is a great bank for a certain sort of customer, but have neither the range nor the broadness of products nor the desire to aggressively expand and influence the whole market. Perhaps an analogy can be drawn with gull petrol (something I know little about). Kiwibank was able to expand because it was cost-efficient to tack on a banking operation to Postshops: I’m not saying it wasn’t a risk building that infrastructure, but it was the sort of opportunity not available to anything other than a govt backed reincarnation of postbank. Govt also took on a risk that it would be commercially successful, not an undue one, but one that paid off.
As AG notes, Kiwibank isn’t exactly making risky plays. Kiwibanks success is also largely due to having successfully deployed efficient internal systems.
Vote:April 5th, 2009 at 2:18 pm
Kiwibank’s own ads have warned us that Aussies don’t know how to pronounce Whakatane? So how are their Aussie call center staff supposed to understand NZ place names? Are we supposed to spell everything out for them?
Vote:April 5th, 2009 at 3:33 pm
davidp, if you were a kiwibank customer would you prefer if they didn’t offer a kiwisaver scheme at all or whether they resold a service from another company to keep things simple?
Vote:April 5th, 2009 at 3:40 pm
hayek… I’d prefer that they didn’t indulge in advertising based on nationalism and xenophobia. Especially since they’re government owned… I might not have any choice in the matter but I’m still a shareholder-by-proxy and it embarrasses me to be associated with shallow jingoism. But, if they’re advertising one thing and doing something completely different, then I’m happy to point out their hypocrisy.
Vote:April 5th, 2009 at 5:44 pm
So offering an ozzie product that therefore has an ozzie call centre is rank hypocrisy? Just don’t see it. Admittedly the ads are jingoistic but calling them xenophobic is rather hysterical, especially as there’s a reasonable amount of evidence that the ozzie banks are running a cozy competitive environment, shall we say, as well as playing fairly free with cost transfers to make sure they don’t pay much tax here in NZ (current court case on that one). One signal of such behaviour is that typically the kiwi subsidiaries of the ozzie banks are more profitable than their parents by most of the key measures, cost of capital etc. The ozzie banks also have a reasonably jingoistic government that via the four pillars approach and policies of using the ozzie banks help support their own banks quite strongly. They see it as very important for their banking system to be ozzie owned – funny really!
So, yes not necessarily a good look and frankly kiwibank has overdone it and the original humour has gone but must be a slow day to launch in to the rank hypocrisy stakes?
In terms of some of the statements here. KB does use the retail government guarantee. They do pay NZPO for the use of the services but it’s obviously cheaper (from a capital requirement level) than setting up branches from scratch. I understand they source much more of their funds from NZ than the ozzies and have thus a cheaper cost of funding. They also do not appear to have significantly different lending practises than the ozzie banks. Despite disliking the regressive party immensely I give anderton kudos on this one – good call.
Vote:April 5th, 2009 at 5:45 pm
bring back the edit
Vote:April 5th, 2009 at 7:13 pm
nationalism and xenophobia is hardly apt. I actually found the ads to be uninspiring but my dislike of them didn’t require such hysteria. Is this just another rather lame attempt to bag kiwibank by various people on the sidelines who have always disliked it but never been able to get a juicy line of attack to skewer it on?
Vote:April 5th, 2009 at 8:38 pm
I hope this is not thread jacking, but,
Vote:I have often wondered why New World and the few other New Zealand owned supermarkets do not employ a similar nationalistic attitude to their advertising.
Countdown and all the other Aussie owned supermarkets have a huge market share here in New Zealand. And their holding companies do not even bother to offer mutual recognition of their franking (imputation) credits to their New Zealand shareholders. And don’t tell me it is impossible. Nuplex offered mutual recognition of imputation (franking) credits before they stopped paying dividends.
April 5th, 2009 at 8:41 pm
By the way, BNZ, ASB Bank (CBA), Westpac and ANZ do not offer mutual recognition of franking (imputation) credits.
Vote:April 5th, 2009 at 10:19 pm
Does anyone else find the fact that a bank comparing itself to people who have fought and died in war is highly insulting to them?
Vote:April 5th, 2009 at 10:26 pm
” Does anyone else find the fact that a bank comparing itself to people who have fought and died in war is highly insulting to them? ”
This is priceless exaggeration
Vote:April 6th, 2009 at 10:27 pm
>>This is priceless exaggeration
Why?
Vote: