It was announced yesterday that he will be retiring from the role at the end of July, after 22 years with the bank.

Smith said the banking environment had changed a lot during his career.

Technology was the big focus now, he said.  “It’s easier for the larger banks than the smaller ones, but even they are going to find it a continuing challenge.”

He said it was not just a matter of needing to devise new ways for customers to interact with the bank, such as mobile and online offerings, but making certain that they were secure.

The impact of regulation was another hurdle, he said. Smith estimated it could take up to 40% of a bank’s resources and said it could sometimes detract banks from their core business. “You’re too busy writing programmes that ensure you’re compliant with the latest regulation.”

Consumers had become more demanding and expected more, he said. As banks had to be more upfront about their fees, he said it was becoming easier for customers to make comparisons between lenders when considering home loans. “Those things have changed significantly… as interest rates continue to rise, people will take even more of an interest.”

He expected the proliferation of online and mobile access to lead to a review of the level of “bricks and mortar” investment by some banks.

He said most banks had three distribution channels: Brokers, electronic systems and traditional branches. “You can’t do it both ways, you have to cut costs somewhere. Those that are well-branched, not us but some of the bigger banks in Auckland could have 80 to 100 branches – I would expect a review of where they are placed.”

Smith said if brokers were writing 30% of home loans, that was an important part of the market. “But it’s challenging being able to pay mortgage brokers and at the same time ensure your rates are at a level that the customer is happy with because they are just an added cost.”

Smith said he planned to focus on his directorships after July.

SBS is in the process of recruiting a replacement.

Smith said he was confident he was leaving SBS in a strong position. “I don’t suggest it’s going to be easy… but we’re well-placed to grow with the market in the future. I have no fears.”