New measures aim to increase banking competition.
The Government is taking steps to boost banking competition in New Zealand, focusing on increasing Kiwibank's capabilities and ensuring the Reserve Bank prioritizes competition in the sector. Finance Minister Nicola Willis announced plans to provide Kiwibank with access to more capital, with a potential investment of up to $500 million from New Zealand KiwiSaver funds, institutions, and investors.
The goal is to enable Kiwibank to compete more vigorously against the big four Australian-owned banks. The Government expects the Reserve Bank to place greater emphasis on banking competition in its policies and actions. A revised Financial Policy Remit and a detailed set of expectations have been issued to the Reserve Bank, outlining the importance of competition in the sector.
The Commerce Commission's market study found the banking sector was uncompetitive, with New Zealanders not well-served by a highly profitable, two-tier oligopoly. The Government is urging major trading banks to deliver a fairer deal for bank users, including accelerating open banking and improving payments services. If progress is not seen, further action may be taken.