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Nicola Willis: Finance Minister on her plan to inject competition into the banking sector · Best of Business

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  Speaker 1: You're listening to a podcast from newstalks'b Follow this and
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• 0:16
  Speaker 2: Good afternoon. The Finance Minister has declared war on what
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  Speaker 2: she calls the cozy pillow fights between the big four banks.
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  Speaker 2: The Commus Commission released its banking study today. It made
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  Speaker 2: fourteen recommendations to beef up competition, including capitalizing Kiwibank, introducing
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  Speaker 2: open banking, cracking down on mortgage advisors, and the Finance Minister,
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  Speaker 2: Nicola Willis is with us.
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  Speaker 3: Now, Hey, Nikolin, good afternoon.
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  Speaker 2: Here it on kiwibank. How are you going to capitalize it?
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  Speaker 2: Are you going to do a partial float so anyone
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  Speaker 2: can buy in?
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  Speaker 3: What I've done is I've asked Treasury to work with
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  Speaker 3: Kiwi Group Capital that's the current company of Kiwibank, and
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  Speaker 3: to give me advice before the end of the year
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  Speaker 3: on options for raising new capital. So that could include
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  Speaker 3: keep we saver funds, investment funds, investments from everyday New Zealanders.
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  Speaker 3: They'll come up with options, Cabinet will consider those options
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  Speaker 3: and we'll progress from there.
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  Speaker 2: Are you committed to one hundred percent Keywi ownership?
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  Speaker 3: I think needs to remain New Zealand's bank and exactly
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  Speaker 3: how that defined as one of the questions that need
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  Speaker 3: to be discussed during this process.
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  Speaker 2: Why would mum and dad investors put money into key
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  Speaker 2: We Bank if they can't sell it to just anyone
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  Speaker 2: when they're ready to sell it.
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  Speaker 3: Well, what I know is that a lot of the
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  Speaker 3: key We Save are funds out there are looking for
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  Speaker 3: Zealand based investments and you're right, I want to invest
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  Speaker 3: in it if it's profitable, if they think that it's
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  Speaker 3: got the opportunity for growth and to deliver a return
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  Speaker 3: to their investors. So one of the steps that the
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  Speaker 3: Treasury will need to go through over the next couple
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  Speaker 3: of months is to talk with those potential investors about
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  Speaker 3: the turns on which they would want to invest and
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  Speaker 3: you're write, some of them may say, look, in order
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  Speaker 3: to invest, I want the opportunity down the track of
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  Speaker 3: seeing a listing occur. So those are all things that
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  Speaker 3: will need to be taken into consideration and that our
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  Speaker 3: Cabinet will deliberate on.
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  Speaker 2: Okay, on open banking, does this actually work? It's been hyped,
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  Speaker 2: but the Aussies reckon it just cost them one point
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  Speaker 2: five billion dollars and didn't really do anything for consumers.
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  Speaker 3: Well, I'm much more optimistic about open banking because what
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  Speaker 3: it means is basically, you can have a financial service
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  Speaker 3: provider who provides you one part of the banking offering.
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  Speaker 3: So it just might be your current account, it might
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  Speaker 3: be your foreign exchange, it might be your loan, and
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  Speaker 3: that they can use your data in order to do that.
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  Speaker 3: And the reason I feel optimistic about it is I
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  Speaker 3: want New Zealanders to shop around a bit more because
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  Speaker 3: one of the big conclusions of this report is that
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  Speaker 3: most New Zealanders just don't switch bank, which allows the
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  Speaker 3: banks to lean back and be pretty content that once
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  Speaker 3: they've nabbed a customer, they're a customer for life. Well,
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  Speaker 3: I like the idea of little minnows coming in and saying, hey,
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  Speaker 3: I can do that for you cheaper, faster, better, And
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  Speaker 3: that's what open banking allows for. And we've actually got
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  Speaker 3: to make sure that the banks give that data away
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  Speaker 3: so the innovators can come in and think up some
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  Speaker 3: imaginative ways of doing things.
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  Speaker 2: What's the problem with the mortgage advisors?
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  Speaker 3: I look the comments Commission, I have looked at this
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  Speaker 3: in some detail. They basically, say a lot of mortgage
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  Speaker 3: advisors have agreements with the banks about how much business
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  Speaker 3: style flows through there. Sometimes you might not know it,
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  Speaker 3: but your mortgage advisor doesn't even have a deal with
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  Speaker 3: one of the banks, so you're only seeing offers from
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  Speaker 3: two or three banks, not all of them. So I
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  Speaker 3: think this is an area that the Financial Markets Authority
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  Speaker 3: looks over and we want to get the balanced right.
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  Speaker 3: You don't want to tie up the mortgage advisors and
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  Speaker 3: so much red tape that they can't do their job.
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  Speaker 3: But equally, if you're going to a mortgage advisor, you
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  Speaker 3: want to know that they are giving you the most
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  Speaker 3: tuned up deal possible. And again this is where open
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  Speaker 3: deck tink comes in because if they can access the
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  Speaker 3: dark oare and I only put in one application and
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  Speaker 3: everyone's listening on the same page, makes it simpler to care.
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  Speaker 2: Offer listen, would you put your money where your mouth is?
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  Speaker 2: And when the Westpac banking contract that you've got the
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  Speaker 2: government has got comes up in twenty twenty seven and
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  Speaker 2: if Kiwi Bank is ready, would you put your banking
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  Speaker 2: with them?
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  Speaker 3: Well, it's really important when the government does procurement, it
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  Speaker 3: doesn't fame the one provider over another. So I'd expect
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  Speaker 3: Kwebank to put their best plot forward and whether or
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  Speaker 3: not they would win the tender would depend on who
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  Speaker 3: was going to provide the best value for money contract
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  Speaker 3: for the government contract.
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  Speaker 2: All right, Nicola, thank you for your time. Appreciate it.
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  Speaker 2: This Nicola will as the Finance Minister.
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