Banks on notice to lift their game
Banks must lift their game to ensure the rights of customers are protected, Commerce and Consumer Affairs Minister Kris Faafoi says.
A review of bank conduct, released today by the Financial Markets Authority (FMA) and Reserve Bank of New Zealand (RBNZ), identifies instances of poor conduct by bank staff and weaknesses in bank processes to manage them.
“We are not happy to hear that there are problems, but by identifying them we now have an opportunity to fix them. New Zealand customers should get fair treatment and their needs must be put first,” said Kris Faafoi.
“It’s important banks do much better at identifying problems and risks in their business and fixing them before they become a much bigger problem.”
Minister of Finance Hon Grant Robertson said that dealing with the problems identified in the report was critical to ensure New Zealanders have confidence in their banking system.
“Any weaknesses in how banks manage the way they behave is a concern.
“This report highlights why we must remain vigilant to the risks that Australian customers are facing. Banks need to provide a service that’s acceptable by New Zealanders and my hope is they will do this by placing customers at the heart of their decision making,” said Grant Robertson.
“This is not an end, rather a beginning to ensure banks deliver on the privilege of being licenced to operate in this country.”
The FMA and RBNZ will provide specific individual feedback to each bank later this month. The banks will then have until March 2019 to report back to the regulators and provide plans for addressing the feedback.
The Government would also be looking closely at the findings from the Australian Royal Commission, anticipated in February 2019, and will be asking the RBNZ and FMA to study the final report to determine if further action is needed in New Zealand.
Kris Faafoi said the Government would be taking on board the report’s recommendations on the regulatory environment for bank conduct and will determine if regulations need to change.
A programme of work is already underway to improve the regulation of New Zealand’s financial system and to prioritise customer interests. This includes the Financial Services Legislation Amendment Bill to strengthen regulation of financial advice, changes to the Credit Contracts and Consumer Finance Act to target irresponsible lending, and a review of insurance contract law.
“Ultimately, New Zealand banks need to step up and take greater responsibility for their systems and processes, so that consumers can have confidence that their finances are in safe hands,” said Kris Faafoi.
Media Contact Hon Kris Faafoi : Lindsey Birnie 021 814 025
Media Contact Hon Grant Robertson: Ellen Read 021 562 332