Allowing customers to keep account numbers would ease complicated process

Banks could be forced to allow customers to take their account number with them when they shift to a new bank, in the same way customers can take their cellphone number with them when they move telcos.

Britain, India and the US have all been looking into the idea and MPs here confirm that they too, want bank account portability.

National MP Peseta Sam Lotu-Iiga said he was first asked to consider it by credit union NZCU, which had also had discussions with Green Party co-leader Russel Norman.

Lotu-Iiga said he was trying to get more information from the Minister of Finance's office on what would be needed to make the idea work.


A couple of years ago, banks introduced a system that was supposed to speed up the transfer process.

Customers sign a form saying they want to move to a new bank, which prompts their old bank to send all their details, including automatic payments and direct debits, to the new bank to be set up within about a week.

But Norman said that only dealt with easy payments. "There are all sorts of payments people make to each other, if you're in a shared flat, you might have a whole lot of people paying the bills to you."

Geoff Henry, who runs Northland Business Solutions, changed from BNZ to ASB last August. He still has customers paying into the wrong account. "I have told them but being able to take my bank account number would have been a hell of a lot better. We have 300 or 400 people paying into the account so it's hard to get them all to do it."

Lotu-Iiga said the increasing use of mobile banking might mean that account numbers could be attached to mobile phone numbers. Portability would dramatically boost competition, as had been seen in the mobile phone industry, he said.

The biggest problem would be the cost of setting up such a system.

NZCU chief executive Henry Lynch said portability would bring down the cost of banking for customers over the long term because banks would have to work harder to hold on to customers. "Once it's portable, the customer is benefited by reduced prices ... we saw that years ago with phones and now power. The question is, why don't they want to do it?"

Kiwibank chief executive Paul Brock said customers tended to switch banks because something had made them unhappy, rather than because of what another bank could offer. But Lynch said the current system put too much onus on the customer, Lynch said.


"If you move from Telecom to Vodafone, you don't have to do anything. I remember years ago, the phone companies saying that you couldn't have number portability - now they all do it."

Norman said the Greens were looking at international experiences. "Banks would not want number portability because it adds competition into what is a very uncompetitive sector."

ASB general manager of branch banking Logan Munro said it would be difficult to introduce portability because bank account numbers contained prefixes that indicated which bank and branch. He said hundreds of customers already changed banks each week.