Banking sector faces many challenges - Carl Bates

National MP Carl Bates with Finance Minister Nicola Willis. Willis, along with Commerce Minister Andrew Bayly, will be driving the changes to the banking sector.

THREE KEY FACTS:

• The Commerce Commission’s final report on the banking sector says a stronger Kiwibank and open banking could shake up the “oligopoly” dominating the industry in NZ.
• Finance Minister Nicola Willis has said she is open to diluting the Government’s 100% ownership of Kiwibank to enable it to access more capital.
• Lack of access to face-to-face banking services is a significant issue for many rural residents.

Carl Bates is Whanganui’s National Party MP.

OPINION

Our banking sector is due for a shake-up, and the Government is leading the charge. The Commerce Commission’s final report into bank competition has, in my opinion, laid bare the challenges we face - a highly profitable yet uncompetitive market that’s not delivering the best for everyday Kiwis, especially those in rural and provincial New Zealand.

In response, we are taking decisive action on all 14 of the commission’s recommendations. The Government is committed to making Kiwibank a true competitor, pushing forward with open banking to enhance innovation and choice, and ensuring the Reserve Bank plays its part in fostering competition.

We’ve already made strides by scrapping what I consider to be overly prescriptive loan regulations, making it easier for Kiwis to access credit. But the Commerce Commission’s report is just the beginning. We’re revising policies across the board to ensure all banking providers, big or small, operate on a level playing field.

At the same time, the Finance and Expenditure Committee, in partnership with the Primary Production Committee, is conducting a separate inquiry into banking competition.

This inquiry has a strong focus on rural banking, which I see as being a significant issue for many constituents in the Whanganui electorate.

Two of the Terms of Reference for this inquiry stand out:

• Ascertain whether there is adequate transparency on lending rates for rural, residential, and business lending.
• Access to banking services, including access to cash services, especially in rural areas.

Rural constituents frequently tell me the lack of access to face-to-face banking services outside our cities is a significant issue.

Many of these people also suffer from unreliable digital connectivity, which restricts their access to online banking services.

The Finance and Expenditure Committee is currently calling for public submissions on its inquiry, giving members of the public the opportunity to have their say.

On a recent walkabout in town, I was approached by a constituent complaining about the lack of banking services. I encouraged them to make a submission to the select committee, which they have done.

Submissions close at 11.59pm on Wednesday, September 25, and anyone wishing to make a submission can visit the Parliament website for more information.

Our goal is simple: a more competitive banking sector that works harder for you. With these changes, we’re delivering what I view as being better services, more options and, ultimately, a better deal for all New Zealanders.