Latest / Best of Business / Ian Woolford: Reserve Bank Money and Cash Director on the RBNZ urging banks to provide cash services to customers

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Ian Woolford: Reserve Bank Money and Cash Director on the RBNZ urging banks to provide cash services to customers · Best of Business

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  Speaker 1: Here the do for ce Ellen.
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  Speaker 2: N ninety two text number standard text FECE apply. I
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  Speaker 2: love to know what you think about that. Now. The
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  Speaker 2: Reserve Bank is thinking about getting banks, retail banks to
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  Speaker 2: set up more ATMs and branches so that everyone in
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  Speaker 2: the country has what they considered to be a minimum
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  Speaker 2: level of cash services. It could actually mean creating more
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  Speaker 2: than a thousand extra ATMs or branches. The Reserve Bank's
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  Speaker 2: Director of Money and Cash is Ian Wolford height Ien. Hello,
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  Speaker 2: so what is the minimum level of cash service that
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  Speaker 2: you want the banks to provide?
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  Speaker 3: Well, we think at the moment what's missing is as
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  Speaker 3: a cash depot approach where people can go to the
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  Speaker 3: matter which bank you worth, you can deposit your money
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  Speaker 3: into your account, you can withdraw, you can make change.
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  Speaker 3: We think the country needs about thirteen hundred of those,
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  Speaker 3: in addition to what's currently out there. Now, banks could
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  Speaker 3: choose to rationalize, you know, they could reduce the number
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  Speaker 3: of individual bank ATMs and put more into these multi
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  Speaker 3: bank ATMs, make it easier for people and make it
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  Speaker 3: cheaper to do this. But the key thing is there's
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  Speaker 3: been a lot of branches and ATMs closed over the
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  Speaker 3: last ten years, and we think it's overshot and communities
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  Speaker 3: need easier to access to cash closer to home.
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  Speaker 2: Now, the access to cash is that for normal punters
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  Speaker 2: like myself or is it for businesses for everyone? The
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  Speaker 2: reason I'm asking is that trial that you did in
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  Speaker 2: why pocket Our was that just for normal people or
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  Speaker 2: was that just for businesses?
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  Speaker 3: That was just for retailers, and that was to make
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  Speaker 3: it easier for retailers to bank their cash get changed
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  Speaker 3: so they could get cash out over the counter. So
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  Speaker 3: we were just testing that. But what we've learned partly
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  Speaker 3: from those cash trials is this is really what community needs,
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  Speaker 3: Like everyone in the community needs this.
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  Speaker 2: Yeah. So would you if banks don't willingly do this
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  Speaker 2: and do this of their own volition, would you be
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  Speaker 2: able to force them to do it?
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  Speaker 3: Yeah? So what we're saying is, let's let's start with
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  Speaker 3: a voluntary conversation about how to do this, but then
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  Speaker 3: we would look to regulate if we're not getting the
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  Speaker 3: results that that we think are required.
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  Speaker 2: Yes, okay, now, what is this a broken market? Is
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  Speaker 2: the market not working here?
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  Speaker 3: Yeah, well, in a sense, it is. What we're saying is,
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  Speaker 3: you know, this has been left to the private sector
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  Speaker 3: for a long time, but actually need some intervention now
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  Speaker 3: because now you can understand on some levels banks choosing
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  Speaker 3: to close branches that aren't getting used, but that has
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  Speaker 3: an impact on people's choice, and so this is what
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  Speaker 3: we would say as a market failure, and therefore we
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  Speaker 3: do need to you know, intervene, insert ourselves a bit
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  Speaker 3: and say this is what the community needs.
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  Speaker 2: Yeah, but presumably the reason the banks have shut their
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  Speaker 2: branches is because there aren't that many people in that
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  Speaker 2: particular area using them, in which case, if there aren't
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  Speaker 2: that many people, then the rest of us are going
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  Speaker 2: to have to subsidize what few people do use them, right.
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  Speaker 3: You know, that's why we're not really focusing on bank branches,
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  Speaker 3: because what we understand is people do bank slightly differently now,
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  Speaker 3: so they don't necessarily go to the bank to the
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  Speaker 3: bank branch in the way that they used to. So
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  Speaker 3: we're not really talking about bank branches. We're just talking
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  Speaker 3: about making sure people have access to cash.
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  Speaker 2: Shortly.
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  Speaker 3: Yeah, an ATM where it doesn't matter which bank you branch,
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  Speaker 3: which bank you bankwith you walk into one of these
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  Speaker 3: and you can deposit and get into your account. You know,
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  Speaker 3: people work hard for their money. They want to be
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  Speaker 3: able to withdraw it without cost when they want to.
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  Speaker 3: So it's getting closer to two communities.
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  Speaker 2: I mean, even if it is just an eighty and
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  Speaker 2: there will be an infrastructure cost. So what is the
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  Speaker 2: cost of doing this? Have you estimated?
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  Speaker 3: We think the cost is about one hundred million dollars
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  Speaker 3: a year, right, so.
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  Speaker 2: That ends up what twenty bucks per person in this country.
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  Speaker 2: That's a lot for the rest of us to have
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  Speaker 2: to subsidize, subsidize these people to have access to cash.
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  Speaker 3: Isn't it? Well when you say the rest of us
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  Speaker 3: about more than eighty percent of people use cash regularly. Actually,
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  Speaker 3: some people are quite reliant on cash and using it
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  Speaker 3: quite quite heavily. Others use it much less frequently. But
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  Speaker 3: we get very clear feedback from New Zealanders that people
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  Speaker 3: want the choice, and we've done quite a bit of
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  Speaker 3: work on how much this matters to people when it
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  Speaker 3: matters a lot to them. So it goes a bit
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  Speaker 3: to this point of of you know, what should people
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  Speaker 3: expect from from their banks? You know, banks people work
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  Speaker 3: hard for their money, they put the money in their bank,
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  Speaker 3: they want to take it out when and where they
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  Speaker 3: want to. Should they have to pay for that? Should
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  Speaker 3: they have to pay for an at m our starting
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  Speaker 3: point is you know your bank is looking after your money,
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  Speaker 3: and when you've got your money sitting in your transaction account,
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  Speaker 3: banks are actually earning interest off that. So it's not
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  Speaker 3: like it's a one way street here. You know, there's
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  Speaker 3: a there's a whole relationship between customers and banks and cash.
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  Speaker 3: And we think that well banks have saved money over
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  Speaker 3: the years by reducing their footprint and making it harder
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  Speaker 3: for people to access cash. There's a conversation to be
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  Speaker 3: had about who should pay for what, and we're starting
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  Speaker 3: that conversation by saying we think banks ought to be
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  Speaker 3: paying for a bit more of this.
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  Speaker 2: Ian, thank you, I really appreciate your time. Ian Wilford,
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  Speaker 2: Reserve Bank, Director of Money and Cash. Have you got
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  Speaker 2: You've got the have you got the so set? So
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  Speaker 2: the thing is Heather right when he said this.
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  Speaker 3: But people were hard for the money.
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  Speaker 2: I mean, it just kind of reminds you of that
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  Speaker 2: Donna Summer song, doesn't it.
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  Speaker 3: People were hard for the money. So people were hard
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  Speaker 3: for the money.
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  Speaker 2: I'd take Ian as a secret Donna Summers band, Don't
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  Speaker 2: You Excellent?
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  Speaker 3: People were hard for the money, right.
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  Speaker 2: They do, and for that reason they deserve access to it.
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