Past the first flush of its launch and the bedding in of its IT infrastructure, Kiwibank is now faced with the major task of rolling out equipment and network connections to about 30 newly-opened branches each week.
This includes a major change to owner NZ Post’s Post Shop network, which is being turned round from an X.25 to an IP network provided by TelstraClear.
The bank has committed itself to supplying some remote areas, says IT head Ron van de Riet, “and the infrastructure has just not been there”.
NZ Post has been planning for some time to replace the X.25 network with an up-to-date IP alternative of higher capacity. The upgrade would have been done at some stage, says NZ Post network architect Scott Hudson. “The need was there within Post, but Kiwibank gave us the time imperative.”
The Post IP network will be complete by the middle of next month, Hudson says.
Equipment in each bank branch comprises a local server, with counter terminals — the existing Post Shop terminals with a software upgrade — and “banking terminals” in separate rooms to operate the bank’s internal business and to open accounts and introduce new customers. At present it is necessary to do these last two activities in an interview situation, says van de Riet. Unlike established banks, the Kiwibank branches have an additional large non-banking clientele. Elaborate counter transactions would hold up the lines of people with non-banking NZ Post transactions, as well as those with simple deposits and withdrawals.
The server in the branch reconciles transactions for branch customers within itself, but also communicates in real time with Kiwibank’s central IBM RS/6000 processor.
To further shorten those queues and reduce costs, Kiwibank is putting a lot of faith in online interfaces: the internet and interactive voice response phone banking.
Eventually, the facility to open a new account, or even for a new customer to join the bank will be provided over the internet.
“It is a key strategy for us to establish a lead in internet banking”, van de Riet says, “because that is the cheapest channel” and the bank has a constant eye to economy.
“The problem with [existing] internet banking is that it’s too hard,” and because of unfriendly interfaces, other banks have been limited in the functionality they can provide, he says. Kiwibank plans to change that.
He disagrees that an internet emphasis might pose “digital divide” problems for the lower-income customers which are supposed to be an important part of Kiwibank’s customer base. “We’re not just aiming at lower-paid people; we’re targeting all areas”, he says. Customers typically try all available channels, counter, ATM, phone and internet, and eventually settle on one they prefer for each transaction type.
The bank also has mobile home-loan mangers, who will be provided with a secure interface over the internet through Citrix’s new version of the Nfuse portal, released late last year. This will avoid expensive modem connections over phone lines. “The only expense is to dial into the local ISP.”
Kiwibank currently has an ATM arrangement with ANZ and Westpac, so customers can use those banks’ ATMs. Kiwibank will probably have its own ATMs by later this year or early next, but the bank is gauging the market.
Another high priority for the bank is to make off-site disaster recovery provision. The bank has sufficient backup facilities to restore a local outage at a branch, but in the event of a serious earthquake in Wellington, it will need an alternative site from which to continue operation.