Latest / Best of Business / Jenee Tibshraeny: NZ Herald Wellington business editor on the RBNZ considering requiring banks to set up thousands of ATMs

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Jenee Tibshraeny: NZ Herald Wellington business editor on the RBNZ considering requiring banks to set up thousands of ATMs · Best of Business

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  Speaker 2: The Reserve banks proposal to make banks set up possibly
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  Speaker 2: more than a thousand extra ATMs or sites for cash
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  Speaker 2: services has caught the interest of The Herald's Wellington Business
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  Speaker 2: editor and your native trainee is with us. Hiji day
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  Speaker 2: Hi Heather. When you crunch the numbers, it is quite
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  Speaker 2: wild what they may be forced to do.
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  Speaker 3: It's a lot. You know, the Reserve bankers really worried
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  Speaker 3: that banks aren't sort of upholding their end of the
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  Speaker 3: bargain by making cash services easily available to businesses and
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  Speaker 3: to people. So we're talking not just ATMs that you
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  Speaker 3: can get money out of, but also ATMs or bank
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  Speaker 3: branches where you can deposit money and change your your
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  Speaker 3: you know, change your coins for notes, that type of thing.
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  Speaker 3: So it's proposing requiring banks to set up an additional
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  Speaker 3: either between one than three hundred and three thousand additional
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  Speaker 3: ATMs or like banking hubs, you know, where banks come
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  Speaker 3: together and office services. You know, it doesn't matter which
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  Speaker 3: bank customer you are, but you can you can use
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  Speaker 3: the services. I mean to me that sounds like a lot, Heather.
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  Speaker 3: That's depending on how banks do it, but that could
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  Speaker 3: be more than doubling the number of sites that that
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  Speaker 3: bank set up that people can use to have their
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  Speaker 3: sort of cash needs met.
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  Speaker 1: It's a lot.
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  Speaker 2: So it is a lot. And this estimated cost of
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  Speaker 2: one hundred million dollars a year is that for the
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  Speaker 2: upper level. Is that for if they have to set
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  Speaker 2: up potentially three thousand, you know.
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  Speaker 3: I try to get a bit more info from the
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  Speaker 3: Reserve Bank on that today and they didn't detail that number,
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  Speaker 3: but they said it was spread over time, so they
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  Speaker 3: think it'll cost one hundred million dollars across banks each year.
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  Speaker 3: I'm not sure over what time period. The question I
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  Speaker 3: asked was obviously it would cost more upfront, you know,
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  Speaker 3: to set the things up and then to run them,
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  Speaker 3: so I'm not entirely too sure. But the point here
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  Speaker 3: is that you know, banks, so that the banking sector
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  Speaker 3: has come out and obviously they hate this idea. I
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  Speaker 3: think it's their words are extreme and back to the future.
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  Speaker 3: And the banks say that they will certainly pass this
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  Speaker 3: cost on to customers or the Banking Association at least
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  Speaker 3: says that. So the Reserve Bank acknowledges that you know,
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  Speaker 3: we might end up paying, but it thinks the cost
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  Speaker 3: will be negligible, and you know, given how much the
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  Speaker 3: profits are that banks make. But banks are pushing back,
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  Speaker 3: and I think probably quite a clever way for them
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  Speaker 3: to push back is to say, you make us do this,
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  Speaker 3: kiwis will pay.
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  Speaker 2: Yeah, I mean so Apparently why Reserve Bank seems unfazed
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  Speaker 2: by how much we'd end up paying is because it's
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  Speaker 2: less than two basis points, right, so, and that is negligible.
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  Speaker 2: The problem, though, Janet, is that it's the cost of this,
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  Speaker 2: It's the cost of the capital requirements, like all of
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  Speaker 2: the stuff is adding up from the Reserve Bank to
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  Speaker 2: I suspect actually be a fair whack that we're having
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  Speaker 2: to pay over and above, for example, what the Australians
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  Speaker 2: having to pay in order for retail banks here to
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  Speaker 2: comply with the Reserve Bank.
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  Speaker 3: Yeah, you know, it seems like there is an issue here.
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  Speaker 3: You know, if you are in a rural part of
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  Speaker 3: New Zealand and you have a business and you get
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  Speaker 3: your money from your customers and then you have to
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  Speaker 3: shut your shop early and drive, you know, for an
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  Speaker 3: hour to get to the bank to deposit your money.
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  Speaker 3: I get it that must be a problem, or for
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  Speaker 3: people in a natural disaster when all the services are
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  Speaker 3: cut like in cycling Gabriel and then we need to
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  Speaker 3: use cash. I get that it's an issue. The question
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  Speaker 3: I have for the Reserve Bank is its proposed response
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  Speaker 3: proportionate And in my very humble opinion, it is entirely
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  Speaker 3: disproportionate what they're asking. And you know that there are
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  Speaker 3: a few strands of work here, because I think banks
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  Speaker 3: could probably fairly say, okay, so now you want us
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  Speaker 3: to set up all these additional ATMs and banking hubs.
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  Speaker 3: But at the same time, the government is getting us
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  Speaker 3: to do open banking, so that means to share banks
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  Speaker 3: data with financial technology firms so that they can do
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  Speaker 3: their kind of cool tech stuff to so that we
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  Speaker 3: can do payments in digital ways for cheaper. So that's
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  Speaker 3: another strand of work that banks are being pushed to
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  Speaker 3: do in order to enhance competition make payments cheaper for customers.
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  Speaker 3: So it's just it's a lot, and I think the
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  Speaker 3: Reserve Bank would probably say, well, you can't just focus
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  Speaker 3: on one. They reckon we'll always need cash, And in
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  Speaker 3: the Reserve banks view, the banks need a massive push
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  Speaker 3: to service those customers because they reckon they won't just
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  Speaker 3: do it by themselves.
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  Speaker 2: Yeah, you know, that is a fascinating debate. I think
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  Speaker 2: that's opening up here. Thank you for that genative trainee.
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  Speaker 2: The Herald's Wellington Business.
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