New Zealand Bankers’ Association chief executive Roger Beaumont says banks can no longer help customers who might need a low-interest loan for an emergency, and the Government did not address this issue in its recent announcement on further changes to the Act.
FMA
New Zealand Bankers’ Association chief executive Roger Beaumont said lending policies and risk appetite would vary from bank to bank and could change over time. “In applying those policies, banks will look at a borrower’s particular circumstances, including their debt levels, security, and ability to repay any loans.”
However, it wasn’t just banks that needed to know about property at possible risk from more frequent extreme weather events and rising sea levels. “This information needs to be freely available in a form that’s easily understood to property owners, potential buyers, developers, insurers, local authorities as well as lenders.”
“Banks operate in a highly regulated environment and take their compliance obligations very seriously. In this case, we respect the fact that the cap has been set by the government.”
That has disappointed the NZ Bankers Association, whose CEO Roger Beaumont said it would have been better to target affordability regulations to riskier lending and lenders, as well as to make changes to the penalties regime.
The new hubs will have a Smart ATM and full cash change services, a full-time dedicated concierge, an employee from each bank available on site for a few hours on separate weekdays, a private meeting room, and private areas for phone and internet banking.
“With major changes in customer behaviour accelerated by the Covid-19 pandemic and regular changes in alert levels. We intend to run the next phase until the end of 2023, to give these dynamic changes time to pan out,” Beaumont said.
A regional banking hub trial involving six major banks is to extend until the end of next year and add another four hubs.
The New Zealand Bankers’ Association and the six participating banks have decided to expand the regional banking hubs trial until the end of 2023, opening four new model hubs and adapting the existing four.
The Finance Minister launched NZBA’s regional banking hubs trial in November 2020, with hubs opened in Martinborough, Ōpunake, Stoke and Twizel. The four new hubs will be in Whangamatā, Ōpōtiki, Tūrangi and Waimate, subject to consultation with the communities, and are expected to open by the middle of 2023. Where Kiwibank services are already provided in a town via a Kiwibank Local, Kiwibank will not operate from that hub.
The second phase of the trial includes the following key components:
- Four new model hubs
- Current hubs continued with improvements
- The FinCap partnership, which includes local banking collaborations
- Regional branch closure commitment extended until the end of 2023.
The original four hubs are largely based in towns with fewer than 2000 people. The new hubs, with their increased services, will test demand in larger towns. The criteria for new model hubs are towns with more than 3000 people, at least half an hour’s drive from an existing bank branch.
The four new hubs will have a Smart ATM and full cash change services, a full-time dedicated concierge, an employee from each bank available on site for a few hours on separate weekdays, a private meeting room, and private areas for phone and internet banking.
New Zealand Bankers’ Association chief executive Roger Beaumont says the trial and associated research has provided extremely useful insights into regional banking, despite significant changes in customer banking behaviour and Covid-19 alert level interruptions.
“The banks have looked closely at the data, feedback, and research undertaken over the course of the trial and decided to expand the hubs concept,” says Beaumont. “We look forward to the next phase of the trial.
“The past 12 months have been a difficult time to run a trial, with major changes in customer behaviour accelerated by the Covid-19 pandemic and regular changes in alert levels. We intend to run the next phase until the end of 2023, to give these dynamic changes time to pan out.
“We look forward to working closely with the communities in the hub towns as we work on an industry-led solution to community concerns about regional banking.
The banks participating in the regional banking hubs trial are ANZ, ASB, BNZ, Kiwibank, TSB and Westpac.
These banks are renewing their commitment to not close regional branches until the end of 2023. The renewed commitment is the same as before – it does not include branches within the six main urban centres of Auckland, Tauranga, Hamilton, Wellington, Christchurch, and Dunedin. It also does not cover TSB’s network in Taranaki.
“Another important part of the industry’s support for access to banking services in small towns where branches are no longer viable, or never existed, comes through NZBA’s funding partnership with FinCap. We have committed $5 million over five years to help financial mentors make a real difference for people in the communities they support. Part of the funding is for banking collaboration projects where mentors help clients access banking services,” says Beaumont.
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Fact sheet
Phase two of the regional banking hubs trial will include the following:
- Four new model hubs
- Current hubs continued with improvements
- The FinCap partnership banking services trial
- Regional branch closure commitment extended until the end of 2023.
All trial elements will serve customers of participating banks only.
New model hubs
The new model hubs are being designed to take into account lessons from Phase One of the trial and feedback from NZBA research, local community groups and hub customers. They will consist of
- A multi-bank Smart ATM and full change services
- A full-time dedicated concierge
- An employee from each bank to be available on site for a few hours on separate weekdays to serve their customers and provide advice
- A private meeting room
- Private areas for phone and internet banking.
Locations for the new model hubs are: Whangamatā, Ōpōtiki, Tūrangi and Waimate.
Current hubs continued with improvements
The four existing hubs will continue and include improvements suggested during the course of the Phase One trial. Each hub will have one improvement to test changes in customer uptake.
- Stoke will have a representative from each bank available one day of the week to operate out of a separate room for a few hours a day. These staff will be able provide financial advice to their customers. This will be dependent on building safety assessments.
- Ōpunake will have a bookable banking service, where customers can make a booking at least 48 hours in advance to have a representative from their bank visit them at the hub for a consultation at a set time.
- Twizel to have a bookable video conferencing option for remote meetings with bankers.
- Martinborough’s business cash float trial will be extended..
Existing FinCap banking service trial
NZBA has a partnership with FinCap worth $5m in funding over five years. As part of that partnership FinCap currently funds a trial of 11 banking or financial support collaboration projects, which are delivered through local financial mentoring services.
Each service is tailored to the relevant community and has been created by the financial mentoring service to meet community needs. They mostly involve a computer, a private space, and a financial mentor to help clients build financial capability and digital confidence. Some financial mentoring services transport clients to a nearby banking service. This is a useful part of the regional services trial to assess needs in vulnerable communities.
This project is run by FinCap, which provides high-level data and information to NZBA. The most useful form of data from this project is qualitative, not quantitative.
Extension of regional branch closure commitment
For the duration of this trial, until the end of 2023, the participating banks will continue the regional branch closure commitment to not close any branches outside the six main metropolitan districts of Auckland, Hamilton, Tauranga, Wellington, Christchurch and Dunedin. However, there would be an exemption for TSB, who would be allowed to reconfigure its branch network in Taranaki.