“This is something that takes time, it has been progressed since we announced that in September – and we’re moving at that pace.”
New Zealand’s retail banks are on track to start rolling out a confirmation of payee service by the end of the year, says the New Zealand Banking Association.
“We’ve just completed a competitive selection process and now have a preferred provider for the service. We won’t be able to announce the name of that provider until we’ve finalised the contractual arrangements,” says New Zealand Banking Association chief executive Roger Beaumont.
“In line with our previously announced commitment, we’re on track to start rolling this out by the end of the year.”
‘Confirmation of payee’ will help people making an online payment from one bank account to another to check whether they’re paying the right account and may help identify payments to scammers. It will also help people avoid making mistaken payments to the wrong account.
When a customer makes a payment they currently need to enter the recipient’s name and account number. Once it’s available, confirmation of payee will compare the name a customer has put into their payment details against the actual name registered against the account number and indicate whether that name matches or not.
It is then up to the customer to decide whether to proceed with a payment after they receive this notification.
In addition to confirmation of payee, banks are also:
- Supporting an Anti-Scam Centre, initially targeting mule accounts used by criminals to move stolen money
- Removing hyperlinks from texts to customers
- Raising public awareness about scams.
“Banks are encouraging other sectors involved in the scam ecosystem to do more to prevent scams where they can. Scams typically start when people are deceived by fake websites, emails, texts, social media ads, and phone calls, so there’s a role for telcos, social media companies, and search engines to help stop them in the first place. They’re able to intervene in areas outside banks’ control.
“There’s also a role for government. Banks have got phase one of the Anti-Scam Centre off the ground by identifying and sharing more information faster on mule bank accounts, which are used by criminals to move stolen money. To take the centre to the next level, we’ve asked the government for operational support by involving the police and other relevant agencies. We’ve also asked them to set scam prevention expectations for other industries.”
On the next steps for confirmation of payee, Beaumont says: “Having identified a confirmation of payee solution, we now need to do the technical build for our payments system and ensure it complies with banks’ customer privacy and confidentiality obligations. Banks will also need to build and implement relevant changes, including to their online banking and mobile app platforms.
“Confirmation of payee won’t be a silver bullet in the war on scams. This solution is part of a suite of anti-scam initiatives being implemented by retail banks. Scams are increasingly sophisticated and require a layered approach to prevent them and protect consumers.”
ENDS
The New Zealand Banking Association (NZBA) also welcomed the changes, with chief executive Roger Beaumont highlight that the changes would allow banks to exercise flexibility and discretion to better meet customers’ needs, especially in emergency situations.
New Zealand Banking Association’s revealed almost 30 percent more home loans were taken out from June to December 2023, than the previous six months.
The number of new home loans increased by nearly 30% in the six months to December 2023 according to retail banking insights released today by the New Zealand Banking Association.
There were 52,504 new home loans from June to December, which is an increase of 29.8% compared to 40,438 new loans in the previous six months. Of the new loans, 26.3% went to first home buyers, with the rest going to existing customers opening new loans, for example, to move a new house, to borrow for renovations or split existing debt into new loans. New loans do not include borrowers topping up an existing loan.
New Zealand Banking Association chief executive Roger Beaumont says: “The increase in new home loans is quite surprising in the current economy where interest rates have risen significantly off historically low rates. It shows activity in the market is holding up despite the cost of borrowing rising to help combat inflation, and many New Zealanders experiencing financial challenges. It also bucks the downward trend in the previous six months, when new home loans were down around 11%.”
The average home loan value for first home buyers was $476,919, a decrease of 12.7% compared to the previous six months. “This shows that first home buyers make up a good proportion of new home loans and, due to housing market conditions, they don’t need to borrow as much as previously, which is good news for people getting into their first home.”
In December 2023 there were 1.31 million home loans across 1.1 million customers. The average value of all home loans was $322,614. In that period 16,167 home loans switched from principal and interest repayments to interest-only, up from 11,090 in the previous six months.
“Savers are making the most of raised interest rates, which is not surprising, with the average interest rate on term deposits sitting at 5.8%” says Beaumont. The average interest rate on savings accounts in the period was 3.6%.
The value of term deposits increased by 11.1% to $171 billion, with an average balance $105,904.
The full set of retail banking insights for July to December 2023 is available here: https://www.nzba.org.nz/wp-content/uploads/2024/04/Retail-banking-insights-July-to-December-2023.pdf
ENDS
“We welcome the removal of overly prescriptive affordability assessment requirements because it should help fix the one-size-fits-all approach that treated all types of lending and borrowers the same. The change still means that consumers are protected, and lenders need to be responsible,” NZBA Chief Executive Roger Beaumont says.
“What it means is it’ll go back to the way it was prior to these regulations, when banks could exercise discretion in determining whether a customer was suitable for a loan or not,” said chief executive Roger Beaumont.
Beaumont is pleased to see moves to simplify other matters in the CCCFA, especially personal liability for directors and senior managers, the requirements for disclosure of information to borrowers and the updating of the Responsible Lending Code guidance, to get the balance right and help ensure consumers don’t see a prescriptive approach reintroduced.
NZ Banking Association chief executive Roger Beaumont joined Mike Hosking.
The banking industry welcomes changes to consumer lending law announced by the government today.
New Zealand Banking Association chief executive Roger Beaumont says: “We welcome the removal of overly prescriptive affordability assessment requirements because it should help fix the one-size-fits-all approach that treated all types of lending and borrowers the same.
“The change still means that consumers are protected, and lenders need to be responsible.
“This will help bring back flexibility and discretion for banks to help customers in need, for example in emergency situations, and better recognises that banks already have their own prudent lending policies, which help ensure borrowers can afford to repay any debt.
“We look forward to working with officials on Responsible Lending Code guidance, to get the balance right and help ensure we don’t see a prescriptive approach reintroduced.
“We are also pleased to see moves to simplify other matters in the CCCFA, especially personal liability for directors and senior managers, and the requirements for disclosure of information to borrowers. We will work constructively with the government on these changes.”
ENDS