Major Banks Compliant With RBNZ Outsourcing Policy
In a significant milestone, the Reserve Bank of New Zealand - Te Pūtea Matua is pleased to confirm that New Zealand’s largest banks are now compliant with our Outsourcing Policy (BS11).
BS11 is designed to manage risks that could arise when banks outsource certain functions to third party providers. For wholly owned subsidiaries, this includes their parent bank, says Director of Prudential Supervision, Scott McKinnon. Common examples of outsourced activities include IT processing, accounting and call centres.
“Our four major banks are subsidiaries of offshore banking groups, which creates particular risks that we need to manage. Our outsourcing policy is designed to protect financial stability and customers by ensuring major New Zealand banks can continue to operate in the unlikely event they have to separate from their parent, or if a service provider was to fail.
“This is a huge development for the stability of New Zealand’s banking sector. Achieving full compliance with BS11 involved considerable work over several years, including 1500 engagements with affected banks over the past six years. All banks covered by BS11 have now delivered on their plans to be compliant with the policy.”
The BS11 policy was revised in 2017 following two years of consultation. It requires our largest banks covered by the policy (ANZ, ASB, BNZ, Kiwibank and Westpac) to continue to provide basic banking services and meet liquidity requirements regardless of issues affecting their parent or major outsourcing providers.