RBNZ wants financial sector to become more competitive, efficient and innovative

Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr has warned that the country's financial sector needs to improve to avoid being left behind.

Governor Orr said the RBNZ wanted a financial sector that was “inclusive, trusted and resilient, while also being efficient and competitive”. However, the sector was being confronted by numerous challenges, such as:

  • A retail banking sector that was concentrated and largely foreign-owned.
  • Significant levels of financial exclusion, due to reduced access to banking service and a shortage of relevant financial products.
  • Limited capital market development, with most New Zealanders’ wealth being home equity or global shares (owned through KiwiSaver accounts).
  • Limited financial product, payment and technology innovation.
  • Declining resilience to climate change, with global insurance in retreat as the effects of climate volatility become more evident.


Governor Orr said this financial framework, combined with New Zealand’s economic ownership structure, promoted capital-shallow production and persistent low productivity growth.

“Our policies are designed to protect and promote the stability of New Zealand’s financial system by addressing prudential risks. But we also consider competition, compliance cost and the diversity of the deposit taking sector,” he said. 

“The lack of competition and diversity is a particular bugbear. The Commerce Commission has just published a draft report identifying limitations in competition in the personal banking services market. We agree with their description of the sector and will respond with our thoughts in short order.”

Governor Orr said the RBNZ, in partnership with New Zealand's other financial regulators, was working to:

  • Make the financial sector more competitive, efficient and innovative.
  • Make the financial sector more resilient to the effects of climate change.
  • Improve the financial sector's culture and governance.
  • Improve consumers' access to payments infrastructure.
  • Improve Māori access to capital.



Published: 19/4/2024