|
John,
I’ve just made a big announcement and I wanted to make sure you
heard the news.
The cost of living is top of mind for many Kiwis, and we
need to make sure there’s a competitive market among banks so people
can be confident that they’re getting the best deal
possible.
There’s been long standing concerns that the market is not working
well for Kiwis. Banks have consistently made high profits over a
number of years and their returns have outperformed their peers in
other countries.
That’s why our Government has agreed to a market study into
competition in the banking sector for personal banking services to
ensure the market is working well for New Zealanders.
New Zealand’s banking sector is dominated by a small number of big
players. Four major banks make up around 85% of the mortgage and other
lending market and hold a 90% share of total bank deposits. Loans by
smaller lenders are growing but remain small in comparison.
This market study is the first step in understanding
banking competition issues, and it’s another way that we’re working to
support Kiwis with the cost of living.
The Commerce Commission will focus on examining barriers to new
competitors entering or expanding in the market, the introduction of
innovative products and services and consumers’ ability to switch
between banks. They will also examine banks’ profitability and other
financial measures to assess competition in the sector.
The study will be completed by the end of August next year, but
there’s every possibility that actions can be taken to fix some issues
ahead of the final report. We’re also getting on with our work on open
banking and establishing a consumer data rights regime, to deliver a
better deal for New Zealanders.
I’ll be back in touch soon with more on how we’re supporting
households with the cost of living, but for now, please make sure to
share this email with those who might have missed today’s news.
Thanks,
Duncan
P.S. You can find out a bit more about how we’re supporting
households with the cost of living, here.
|
