The review covers New Zealand’s financial institutions along with industry bodies, regulators, dispute resolution schemes and the payments and settlement system.
FintechNZ general manager James Brown says the report will have implications for New Zealand, though he says it is encouraging to see the proactive positive work being done already by New Zealand’s major banks.
“Once the report is out New Zealand banks will have one month to do their own report. In the past we have seen sales to dead people, inappropriate products and fees being charged for no reason,” he says.
“Lending in Australia and New Zealand has slowed. So, have banks being doing any stress testing around the next generation and how they view the purchase of a house as a long-term investment?
“With companies like Sharesies and Hatch now making investment more inclusive will the next generation default to the typical buy a house as my retirement plan, or will they consider other options? What would this do to the banking sector that focuses on home lending for the bulk of its income?
“Typically, New Zealand follows what the UK and Australia do and this could be the same for open banking. Minister Chris Faafoi delivered a speech at the Payments NZ conference being very clear that more needed to be done.
“So is now the time for our banks to make a decision about the future of banking and how they want to support the decisions of their customers. This would need to include working with third party providers,” Brown says.
“At a recent Trans-Tasman Business Circle event, a number of the banks made it clear that they are already working with a number of fintechs on various issues which is great to see, he says.
Lending criteria will become tighter because with technology banks and financial institutions will be able to see every piece of lending, income and expenditure that people have and therefore decline when it is appropriate to do so.
Brown says Transparency NZ has been working with a large number of financial services providers and has put together the Financial Integrity Systems Assessment.
“Open banking is going to be a good thing as it will force financial services providers to really focus on being customer-centric as opposed to it just being a slogan.”