Minister of Commerce and Consumer Affairs Scott Simpson. Photo:
The government has accepted most of the recommendations out of a banking inquiry to improve competition in the sector.
A cross-party inquiry examining the state of banking competition made 19 suggestions in its report, released in August.
The government has accepted or partially accepted all the recommendations.
- Standardise credit information and make it easier to compare loans. Response: Agree.
- Open the door to more overseas banks and fintechs. Response: Agree.
- Strengthen Kiwibank through investment. Response: Agree.
- Review fees and profits on everyday accounts. Response: Agree.
- Revisit Reserve Bank prudential settings. Response: Partially Agree.
- Evaluate capital settings. Response: Agree.
- Broaden the "regulatory sandbox" trial. Response: Agree.
- Cut Council of Financial Regulators overlap. Response: Agree.
- Make climate lending rules clear and consistent. Response: Partially Agree.
- Push for real-time payments. Response: Agree.
- Improve Payments New Zealand. Response: Agree.
- Address limits on growth of non-bank deposit. Response: Agree.
- Cease capital increases for banks. Response: Partially Agree.
- Formal disclosure of factors. Response: Agree.
- Set voluntary Māori banking services standards. Response: Agree.
- Remove anti-money-laundering (AML) roadblocks for Māori land trusts. Response: Agree
- Enable Māori co-investment in infrastructure. Response: Agree.
- Create Māori-focused lending products. Response: Agree.
Finance Minister Nicola Willis said the select committee's findings echoed many of the findings of the Commerce Commission's report on personal banking services last year.
"The inquiry's findings highlighted concerns about the high levels of banking profitability and market concentration, barriers to entry for other players, and regulatory settings.
"The government has been progressing all the recommendations in the Commerce Commission's report. They include giving Kiwibank's parent company the go-ahead to raise additional capital and requiring the Reserve Bank to place greater emphasis on banking competition across a range of policies and actions."
Minister of Commerce and Consumer Affairs Scott Simpson said he would be writing to banks encouraging them to standardise financial information and use digital technologies to help customers compare products and loan options across banks, and asking them to disclose profitability on transaction, on-call and savings accounts.
"I will also be writing to the Financial Markets Authority asking it to consider broadening its regulatory sandbox trail which allows firms to test innovative products and services in a controlled environment.
"Work is also underway on a single licensing model to cut red tape for innovative financial services.
"This government is committed to driving competition in the banking sector, encouraging innovation and delivering a better deal for consumers."
"Monitoring and reporting on the committee's recommendations will be coordinated by the Treasury."
The New Zealand Banking Association said its members welcomed the government's response to the banking inquiry into competition.
"We support quality regulation that makes banking easier for New Zealanders," said chief executive Roger Beaumont.
"We will discuss the response with our members and work constructively with the government and agencies in progressing the relevant industry recommendations."
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