The banking industry looks forward to participating in the competition study into retail banking announced by the government today says the New Zealand Banking Association – Te Rangapū Pēke.
“We believe the enquiry will ease any concerns in the community about competition and innovation in the banking industry. Our banks are transparent, and will engage constructively with the Commerce Commission,” says New Zealand Banking Association chief executive Roger Beaumont.
“We have a competitive banking sector, with 16 retail banks operating in New Zealand and easy bank switching. We are open to the opportunity to discuss the contribution banks make to support the New Zealand economy, households, and businesses.
“Switching banks is easy. Your new bank can arrange everything including transferring your funds from your old bank and setting up your recurring payments to your new accounts. This can be done within five working days, and you don’t even need to talk to your old bank.
“Our banks are highly regulated, well capitalised, and profitable. That helps makes them resilient, and with recent overseas bank failures we’ve seen why that’s important.
“In recent years we have seen bank teams tied up with significant regulatory requirements, limiting the ability to focus on new product development. We hope the Commerce Commission will look closely at the regulatory environment as part of its study.
“The government and the banking industry are progressing plans to make ‘open banking’ a reality. This will allow customers to securely share their banking information with other service providers to access other products and services that suit them. This will help make banking even more competitive.
“New Zealanders are well served by their banks and we saw them step up quickly in the North Island flooding and cyclone events earlier this year, making $1.4 billion available in low-cost lending, and donating $6.5 million to disaster relief funds. They also provided loan repayment relief and access to term deposits, and worked closely with government agencies to get cash to impacted areas.
“Banks are among our biggest businesses so their profits look big. They also contribute their fair share to New Zealand. Last year banks made a net profit of $7.18 billion. They also spent $9.1 billion running their businesses and paying tax here. That’s a net positive contribution of $1.92 billion – before you take into account the contribution banks make in funding household and business needs, to the tune of $535 billion. Providing a return to shareholders helps maintain their investment in New Zealand, and ultimately some KiwiSaver funds share in those returns.”