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Tuesday, 05 July 2022 09:53
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NZ fin services need to be even more transparent

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Now is the time for Kiwi financial services to be more transparent following banking issues in the United Kingdom and Australia, a leading New Zealand financial tech expert says.

Normally bank employees must meet sales incentive targets on lending, deposit attraction, payment protection insurance, life insurance and Kiwi Saver funds to achieve a financial bonus.“Traditional sales targets have driven some poor behaviours so financial service and insurance providers throughout the world are now being driven to be more open about charges and changing the way they drive revenue which means less commission being added to the policy,” FinTechNZ general manager James Brown says.“This will bring more transparency which will help to rebuild trust in our banks and financial service providers. We will start to see more openness towards fee structures and what policies cover and offer. They will be easier to understand with insurance cover being more proactive rather than reactive providing a more positive outcome.“New Zealand banks are moving towards a more balanced scorecard approach. However, a big part of that is still financial performance. We are seeing positive steps, but we could do more to prevent dead people buying a policy they clearly don’t need, as has been the case. This is where I see fintech innovation playing a key role going forward with machine learning and more AI within financial services.“In the UK, sales advisors automatically ticked the payment protection box when customers took out a loan, mortgage or credit card, without discussing it with customers, leading to poor customer service.“Sales pressures in the UK have led to the payments protection insurance (PPI) scandal which has seen the banks there set aside $NZ95billion to cover the costs before the end of next year because of the mis-selling of PPI.“The insurance was designed to cover loan or credit card payments if the person who took them out was unable to pay the money back, say they became ill or lost their job.“Financial services are a big part of everyone’s life, therefore it is important that financial service providers are looking after the interests of customers rather than just their bottom line and moving towards open banking will support this.”While New Zealand is a very small part of a large global fintech market we have advantages that are enabling the 48.5 percent growth compared to the global average of 31 percent, Brown says.“Transparency will be critical and as New Zealand is ranked number one in the world along with Denmark as the most transparent and least cor

  • Source: A MakeLemonade release
Published in FINANCIAL
Tagged under
  • fintech talk
  • Business
  • news talk

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