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We’re looking at how well competition in personal banking services is working and what could be done to improve it for the long-term benefit of Kiwi consumers.
On 21 March 2024 we published a draft report with our preliminary findings on how well competition is working and draft recommendations for improving competition.
You can share your views on the draft report, our preliminary findings and draft recommendations by completing this feedback form.
By sharing your feedback, you’ll help ensure we hear from a wide range of New Zealanders.
While all information shared with us through this form is anonymous, please be aware that the Commission is subject to the Official Information Act.

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* 1. Our preliminary findings include that New Zealand’s four largest banks – ANZ, ASB, BNZ and Westpac – do not face strong competition when providing personal banking services, and that competition between them is sporadic rather than strong and sustained. Kiwibank imposes some constraint on the four largest banks but currently lacks the capital backing to consistently drive stronger competition in the market, and other smaller providers have not been able to exert any meaningful constraint on the four largest banks.

Do you agree with our preliminary findings on the nature of competition?

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* 2. Our preliminary findings include that there are four main factors limiting competition for personal banking services: structural advantages of the four largest banks over the smaller providers (particularly their scale, scope and funding cost advantages); regulatory barriers to entry and expansion (particularly bank prudential capital requirements); barriers to consumer switching and engagement; and impediments to innovation by fintechs (particularly delays to open banking).

Do you agree with our preliminary findings on the factors affecting competition?

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* 3. Our draft recommendations

Improve the capital position of smaller providers and Kiwibank

1. The Reserve Bank should review its prudential capital settings to ensure they are competitively neutral and smaller players are better able to compete

2. Kiwibank’s owner should consider what is necessary to make it a disruptive competitor, including how to provide it with access to more capital

Accelerate progress on open banking

3. The Government should set clear deadlines and work with industry to ensure open banking is fully operational by June 2026

4. The Government should reduce the barriers imposed by the Anti-Money Laundering and Countering Financing of Terrorism regime on banks working with fintechs

Ensure the regulatory environment better supports competition

5. The Reserve Bank should use its new decision-making framework under the Deposit Takers Act (DT Act) to explicitly and transparently consider competitive effects

6. The Reserve Bank should explicitly and transparently articulate how it is applying the purposes and principles of the DT Act to its Deposit Compensation Scheme levy advice

7. The Reserve Bank should consider broadening access to Exchange Settlement Account System (ESAS) accounts. (ESAS is the system for the processing and settling of payments between banks and other financial institutions.)

8. The Government should amend the DT Act to allow the Reserve Bank to promote competition, rather than maintain competition

9. The Government and policy makers should seek competitive neutrality across banks and other providers in their decision-making wherever possible

10. The Credit Contracts and Consumer Finance Act should be competitively neutral with respect to home loan refinancing to make it easier for consumers to switch providers

Empower consumers

11. Industry should create an enhanced switching service with appropriate Government oversight

12. Home loan providers should present offers in a readily comparable manner

13. Mortgage lenders should pro-rate all clawbacks for broker commissions and cash incentives

14. The FMA should produce guidance and monitor mortgage advisors’ compliance with their duties under the Financial Markets Conduct Act

15. Industry and Government should prioritise work to reduce the barriers to lending on Māori freehold land

16. Industry and Government should prioritise ensuring widespread availability of basic bank accounts


Do you agree with the 16 draft recommendations noted above?

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* 4. Which of the draft recommendations do you think is most likely to improve competition for personal banking services? Why or why not?

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* 5. Which of the draft recommendations do you think is least likely to improve competition for personal banking services, and why?

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* 6. What would make it easier for you to compare and switch personal banking service providers?

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* 7. What recommendations would you add that we may not have considered?

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* 8. Is there anything else that you would like to tell us about the report that we have not considered?

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