Bank insurance practises queried
If banks did not offer personal insurance products to their customers, they would not be providing a full level of service, says the chief executive of the Bankers Association. But there are concerns that some staff are not being adequately trained.
Wednesday, July 31st 2013, 4:45PM
Kirk Hope said many customers would already have insurance when they went to a bank but staff would still take the opportunity to make sure they had the right product set.
“Most banks now work around ensuring that they are not just having a conversation with the customer about one product because if they are, they’re not looking at their entire needs.”
Mike Naylor, of Massey University, said bank tellers were less pushy with insurance than they might have been five years ago, because banks were more wary of regulation.
But he said banks were quite restricted in what they could do with insurance and those that had tried to purchase distribution channels had tended not to do very well. “Banks have taken the market gaps seriously but I don’t think they are taking the advice angle as seriously. The Government has missed a beat here.”
Regulation had focussed on investment, he said, because it was an easier way to score political points.
But for the rest of the decade it would probably need to shift to insurance. An Australian review had moved more complex products, such as income and trauma insurance, to the realm of the AFA rather than RFA. Naylor said there was a good chance that would happen here, too.
Naylor said he had been going around the banks, asking about how they trained staff to offer personal insurance. “Some are good but some are new to the area.”
There were moves towards introducing a framework to unify the training methods, which he said would be a positive step. “Lots of banks teach whatever they want in that area, it varies quite a lot. A number come from the investment side, so they don’t know that insurance is a different process and should be approached differently."
Hope said concerns about training were likely out of date.
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