RBNZ Working With Industry To Improve Access To Basic Transaction Services

Last year the Council of Financial Regulators (CoFR) consulted the public on whether New Zealanders should have the right to access a basic transaction account if they want one.

50 submissions were received and 22 community groups, financial institutions, fintechs, and support services were directly engaged, with 98% of submitters stating that action is needed to improve access to transaction accounts.

Acting Assistant Governor Financial Stability, Angus McGregor, says that the consultation clearly highlighted the challenges some groups face in accessing the basic banking services necessary to meet their everyday financial needs.

“This consultation process has allowed us to gather a wide range of perspectives, take on board industry feedback, and find pragmatic solutions.” Mr McGregor says.

“We received constructive input from the banking sector, and a willingness to work with us to solve this issue through a collaborative approach.”

The RBNZ is developing a Memorandum of Understanding (MoU) to support this approach to addressing financial exclusion.

Under the MoU, participating financial entities will commit to provide access to all New Zealand consumers unless they have a compelling reason for declining to provide a basic transaction product. Public sector agencies will commit to clarifying regulatory requirements, co-ordinating efforts, and highlighting best practices that can be adopted to support financial inclusion.

The MoU will provide flexibility for participating entities to develop their own solutions to promote inclusion, while ensuring progress can be monitored through regular reporting.
This work aims to bring financial inclusion in New Zealand in line with other developed countries such as Canada, the UK, France, Denmark and Sweden.

The RBNZ will be leading co-ordination of the MoU, with support from the Financial Markets Authority, the Banking Ombudsmen, the Retirement Commission, the Department of Internal Affairs, the Ministry of Justice, the Ministry of Business, Innovation and Employment, and the Department of Corrections.

“This work directly supports our statutory purpose of enabling economic wellbeing and prosperity for all New Zealanders, and aligns with recommendations in the Commerce Commission’s Market Study into Personal Banking Services.” Mr McGregor says.

It is anticipated that the MoU will come into effect later this year.

More information:

• Read the CoFR Consultation Summary on Access to Basic Transaction Accounts - https://govt.us20.list-manage.com/track/click?u=bd316aa7ee4f5679c56377819&id=1545100f1e&e=456d2b38b7

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