Clare Bolingford is no stranger to banks behaving badly.
She saw it up close in her home country the United Kingdom leading up to the Global Financial Crisis and from a distance watched the nightmare tales coming out of Australia's Banking Royal Commission.
Now she has been charged with heading up a team to license and regulate New Zealand's banks and insurers at the Financial Markets Authority to make sure our financial products are not ripping people off or being sold in an unfair way.
"You can have such a significant impact on somebody's life if their financial product lets them down or if they are not treated properly by their financial services provider.
"But I have also seen how amazing it is when people can be supported through difficult times if they have the right products that suit them."
Bolingford, who grew up in England's Cotswolds, has spent most of her career in London with the UK's Financial Conduct Authority.
Last year she emigrated to New Zealand with her Kiwi husband and two young children, landing in January, just a few months before the world went into a Covid-induced lockdown.
Unlike many at the FMA Bolingford does not come from a legal background. She studied politics at Warwick University before moving to London with the hopes of getting a job in the civil service.
"I had always been quite keen on the public sector side of things but I hadn't made it for that year through the fast-track. I just got pipped at the post. I didn't really have a plan B."
Instead she signed on with a couple of temping agencies looking for work.
"The first place they sent me for a three-month stint was the FSA [Financial Services Authority which has since split into the Prudential Regulatory Authority and the Financial Conduct Authority].
"I didn't even know what it was. They said: Can you get to Canary Wharf? And I was like 'of course I can' - I didn't even know where Canary Wharf was. I got on a bus and got there and the rest is history."
Bolingford got her first permanent job in the communications team before working her way up into a banking supervision role. Her last role there was head of cross-cutting policy and head of supervision for retail banking groups.
"The banking sector there is a lot bigger - you have got a lot more diversification in terms of what the banks do because pre-Brexit the UK was the centre of capital markets activity.
"You had the full suite of banking activity that you were supervising - that was fascinating for me because the cultures within those global firms were quite different depending on which bit you went into. It wasn't like there was one culture or one way of doing things. They are massive institutions."
But it was the culture which also saw many get into trouble through the 2008 Global Financial Crisis.
"Culturally a lot of the seeds of the GFC were sown in poor behaviour and certainly in the aftermath. Under pressure people and organisations can behave worse than they would do in normal circumstances and certainly that is what we saw there. So we saw even more poor conduct coming out as firms were struggling to survive."
She remembers one particular product which saw the regulator go head to head with the sector in a legal battle.
"Probably the worst miss-selling I saw was around payment protection insurance which is a bit like credit card repayment insurance.
"When we first started talking to the banks it was a big cash cow for them and so when we first started speaking to them and saying 'we think there is miss-selling here' they were very quick to say 'nothing to see here'."
When the regulator clamped down the banks took it to a judicial review.
"They were fighting us all the way and actually ended up spending far more money fighting it rather than saying; 'okay you think there is a problem here, what can we do to see whether we can resolve it and get the right product out to the right people rather than in a blanket way selling it to everybody'."
Bolingford says one of the many core drivers of misconduct is that firms produce a product to sell - rather than producing a product for a need that people have.
"And if they are not careful about how they sell it and making sure the people who buy it are suitable ... this is where some poor conduct is coming in. We don't see that so much in New Zealand, it is more the control areas not picking up on these issues."
That was the case with a recent finding against the ANZ in which the bank was fined $280,000 by the High Court for misleading hundreds of customers over credit card insurance policy breaches "hiding in plain view".
The bank charged customers for credit card repayment insurance (CCRI) which offered no cover or benefit and issued duplicate policies between April 2014 and November 2019.
The breaches dated back to 1998 but were only reported to the FMA by the ANZ in June 2019.
Bolingford says at the moment the FMA is only able to intervene where firms have been deceptive or misleading in their conduct.
"However we would like to be much more proactive and make sure that we can intervene and indeed the firms themselves can have the right practices in place before something wrong occurs in the first place."
A new law that enables this is part way through Parliament. The Financial Markets (Conduct of Institutions) Amendment Bill had its first reading in February last year and has been to the select committee but is still waiting to go through its second and third readings.
Bolingford is hopeful of it being passed into law this year but is not sitting on her laurels in the meanwhile.
"We are trying to get as ready as we can be. We are already starting to think about our licensing approach and what that could look like. Although we haven't got final legislation we have probably got enough to be working with and then we will tweak it if necessary."
The legislation is part of the Government's response to conduct and culture reviews carried out by the FMA and the Reserve Bank on New Zealand banks and life insurers in 2019 in the wake of Australia's Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
The 2018 Royal Commission revealed cases of irresponsible lending, sales of inappropriate products, fees charged for advice not given and even fees being charged to dead people. It also found evidence of information being concealed from the regulators, and failures to rectify problems which have dragged on for years.
Kiwis looked across the ditch in worry given New Zealand's four major banks are Australian owned as are many of our major insurers and financial services companies, prompting some to call for our own Royal Commission.
Bolingford, who watched it unfold from the UK, says her biggest take-out was the scale of the systematic misconduct.
"It is quite shocking when you see it all laid out and ... when you look at the firms and see the leadership team at the head of them, some of the decisions that were being made - you could see how that could spread through an organisation in a way that is very negative and results in some really bad outcomes.
"To have it right across the system in the way it was in Australia was quite shocking as well. We have a lot of firms in the UK that come from mutuals ... there were problems but it wasn't quite as epidemic and it seemed almost like misconduct had become industry practice [in Australia] because everybody's doing it, we want to make money - it becomes acceptable which was why it was right to call it out."
The regulatory reviews of New Zealand's banks and insurers did not find widespread issues but still plenty of room for improvement.
"What we found is there were weaknesses. And when there could have been issues the banks and insurers may not have been able to pick them up in time to actually deal with them and put things right."
The banks and life insurers were given time to come up with action plans to remedy issues identified and Bolingford says some are still working through putting those in place.
"Conduct is not a fast thing to get right. It is a continual process. One of the things we are keen to make sure of is firms don't think once my action plan is done I'm finished because they won't be ready for the new regime if they think that is going to be enough.
"It is about embedding and continually reviewing that the outcomes are right for the customer."
Bolingford says in the UK conduct regulation has been in place for some time and banks have got used to following a more principles-based approach.
"Even though we might have disagreed from time to time about the nature of it - it is the spirit of the rules rather than the rules themselves that they are focusing on. And it is only when something goes wrong that you need to lean on the law."
Bolingford says the big difference in New Zealand is banks and insurers want to talk about the law straight away with her.
"It is quite legalistic - they are like 'show me where it says that' - they want it to be prescriptive and exacting.
"The UK banks have been used to a principles-based regime and regulator for a lot longer. The debate was different as a result of that. You could go in and say; 'well yes you are legally allowed to sell this product but it's a really bad product for customers because you can't really explain it.'
"And they would say 'fair enough, we can see we need to do something about that'. Whereas here sometimes, and less the banks, but it is almost if you can legally do it then ... why shouldn't we.
"There needs to be a bit of a mindset change with this new regime."
So far Bolingford's focus has been engaging with the industry to help build trust and get them used to the approach.
"When they have a new area they get nervous and scared about what is coming and with a lot of lawyers their mind turns to enforcement first rather than what we want them to focus on, which is getting the controls and processes in place that is going to be of more value to the customer.
"Engaging with industry is a really important part of saying we want to set this up right and we want to deal with the pain points.
"We ultimately want to achieve the same outcome which is better business for you, better outcomes for the customer."
• Director of Banking and Insurance at the Financial Markets Authority
• Education: Politics degree at the University of Warwick
• Career: Worked at the UK regulator the Financial Services Authority which then split and became the Financial Conduct Authority.
• Family: married with two children, 8 and 6.
• What was the last movie you saw? Raya and the last dragon - new Disney movie - in house movie at home with the kids
• Last book read? Homo Deus: A brief history of tomorrow
• Last overseas holiday? Coming to New Zealand. Came out six months before for the interview with the FMA and a holiday.