Previously its offering were essentially split in two with a full set of rates for its discount, Classic offering and another set of, higher rates, for its Standard, Fly Buys and Global Plus offerings.
Under the new structure it has three tiers of rates. Classic is now just one rate (two-year fixed) and is marketed under the Unbeatable campaign.
Fly Buys now has a different rate structure to Global Plus, which is designed to make the former more attractive to borrowers. Vernon says the Global Plus product, is more of a niche offering now.
The Fly Buy rate is around the same as standard rates from other banks, but will tend to be at the lower end of the range.
Vernon says while giving Fly Buy points to customers has a cost to the bank it is worth it.
“It allows us to deliver value back to the customer,” he says. Also it helps the bank build persistency with customers – that is that they will stay with BNZ rather than move.
Vernon says the plan is to “hero” the Classic rate – which is evident in recent advertising - while the changes to Fly Buys puts this product “back in the game”.
Vernon says the “Knockout” promotion was the first phase of the BNZ’s spring campaign, and these product changes are phase two.
With Knockout borrowers go into a draw to win a whole year's repayments for that loan up to $40,000.
At this stage there is no phase three, he says. In terms of rate wars, Vernon says it staying around the two-year fixed rate. While the five-year rates are the lowest in the market, they are not necessarily the best option for borrowers.
He agrees with the view that the interest rate cycle is at or near its peak and fixing for a five year term may turn out to be an expensive option for borrowers.
