The New Zealand Government will closely analyse the outcomes of the Australian Royal Commission but has already committed to ensure consumer interests are protected in the banking and insurance sector.
Minister of Finance Hon Grant Robertson said that a financial sector putting profits ahead of customers was unacceptable, but banks and the wider financial sector were already “on notice” in New Zealand.
“The New Zealand Government had already received reports on conduct and culture in our banking and insurance industry from the Financial Markets Authority (FMA) and Reserve Bank of New Zealand.
“The reviews have identified a number of issues with bank and insurer conduct, and also gaps in how we regulate them. Some of the issues are similar to those highlighted by the Australian Royal Commission, but not as widespread.
“We will look closely at the recommendations of the Royal Commission to see whether they should be implemented here.”
Minister of Commerce and Consumer Affairs Hon Kris Faafoi said banks had broadly accepted the findings of the New Zealand conduct and culture review, and he expects that the March report back from banks would show significant measures to ensure customers were back at the heart of decision-making.
“We have been clear that we expect to see things change and a balancing of the need for profit with banks delivering on the privilege of operating here.
“Further, in light of the FMA RBNZ report on insurer conduct, last week we agreed that we would fast-track customer protection measures across the financial sector.
“New Zealand will have a regime where banks and insurers are entirely focused on good outcomes for the consumer.”
Kris Faafoi said there was a raft of work already underway:
“The Financial Services Legislation Amendment Bill, already at the committee of the whole house stage and close to a final reading, will provide a clear duty for anyone giving advice to ensure a good customer outcome is the priority.
“We also have the Credit Contracts and Consumer Finance Act reform in progress, which will address irresponsible lending and debt collection practices.
“Officials are already working on the fast-tracked broad suite of measures needed to remove regulatory gaps across the finance sector. We will consult on these in May, and this will run alongside work we already have underway to update insurance contract law.
“Consumers are at the top of my mind because unless we share New Zealand’s prosperity more fairly, our economy is not going to deliver for New Zealanders.”