Our response to COVID-19
Supporting our Customers through COVID-19
Heartland is committed to supporting its customers through the financial impacts of the COVID-19 pandemic. When New Zealand began to feel the effects of COVID-19 in March this year, a number of measures were put in place to proactively contact customers, re-deploying a significant proportion of employees to ensure that we were well positioned to do so. Customers were contacted through a number of channels including outbound phone calls and email.
New website functionality was built to specifically enable customers to request support online. To support our customers, a range of loan variation options were offered including payment holidays, reduced principal payments and interest only payments.
Approximately 20% of Heartland employees were re-deployed to customer service and support roles as part of our COVID-19 response strategy. For example, a dedicated customer-facing team was established to proactively contact over 8,000 business customers who may have needed support. 50 employees were also re-deployed to create a dedicated Consumer lending COVID-19 response team of 100 people to respond to, and action, customer support requests.
To help customers leverage their savings during this time, a range of term deposit and call deposit offers were provided to existing customers and shareholders. These interest rate offers also provided an attractive option for customers who were holding government support packages before they were distributed to employees.
Support for our Business Customers
Heartland Bank has participated in the Business Finance Guarantee Scheme (BFGS) since its inception.The BFGS is a collaboration between the New Zealand Government and banks to provide loans to businesses that are financially impacted by COVID-19. Any loans provided by Heartland Bank under this scheme have 80% of the risk guaranteed by the Government – the remaining 20% is covered by Heartland Bank.
On 20 August 2020, the Government announced a number of changes to simplify and expand the BFGS, enabling larger and longer-term loans to be made available to more New Zealand businesses, for more purposes. Heartland supports the changes to the BFGS and believe these are positive for New Zealand businesses.
The changes will enable Heartland Bank, and other participating banks, to assist more new and existing qualifying business customers:
– to access funding for more purposes – as well as cashflow, loans can now also be used for capital assets related to responding to or recovering from, the impacts of COVID-19
– to borrow more, for longer – now $5 million (under one or more loans) for up to five years (increased from $500,000 for three years)
– to repay or refinance up to 20% of their existing debt
– who may otherwise have previously been excluded from borrowing under the BFGS.
In addition to continuing to support BFGS lending, support is being provided to existing customers by giving them more time and flexibility to meet the challenges of lockdowns. In particular, Heartland Extend was launched in May 2020, allowing customers to choose loan repayment terms suited to their needs. Applications are available via a purpose-built digital platform.
Heartland Extend provides the customer with control and flexibility over their loan repayments – allowing them to adjust their payments as needed, with no fees to make these changes. Customers have the option to reduce their regular repayment amounts immediately, or have the flexibility to adjust them in the future if their situation changes. This is done by making changes to the term of the loan. Heartland will continue to work with all Business Extend customers to determine the repayment amounts and term which suit their particular situation.
To date, Heartland has assisted over 2,700 business customers to deal with the ongoing disruption caused to their businesses by COVID-19. With the expansion of the BFGS, and the introduction of Business Extend to new customers, Heartland will be able to assist more businesses to respond to and recover from the impacts of COVID-19.
Support for our Vehicle Loan Customers
For vehicle loan customers in the Consumer division, support options offered included interest-only payments and payment deferrals where required. The feedback from these customers regarding the service provided to them following the outbreak of COVID-19 has been positive. In a survey conducted with vehicle loan customers who had requested assistance with their loan, 96% of respondents were happy with the options provided to them by Heartland and 91% of respondents rated the Heartland team as either “very helpful” or “extremely helpful”.
Investment in digital capability over the last two years meant that intermediary motor vehicle dealers could continue to process finance applications for their customers using digital tools such as electronic document signing and biometric facial recognition despite alert level restrictions on in-person interactions1.
Support for our People
The support provided to Heartland’s customers in response to COVID-19 was only made possible through the resilience and adaptability of our people. In the face of challenges presented to the business, our people stepped up and truly lived and demonstrated our mātāpono. This meant doing the right thing by our customers (mahi tika), working as one team to make change happen (mahi tahi) and continuously evolving as the situation required (mahi tipu).
The health and wellbeing of our people was paramount in our response. Team members who were more vulnerable to COVID-19 were immediately identified and we worked with them to keep them safe. Throughout the lockdown and moving back down the alert levels, we communicated frequently to ensure our people were aware of latest developments, how to stay connected and how to reach out for support if needed.
For those working from home, the use of our online meeting tools was encouraged to enable productive meetings and to keep up regular contact with each other. For those essential employees who remained in the offices, appropriate protocols were immediately put in place to introduce strict hygiene standards and adhere to physical distancing requirements.